Additional Expenses

It probably doesn’t come as a surprise to most vegetable growers, especially those who grow leafy greens, that many of the compliance requirements of the Leafy Greens Marketing Agreement (LGMA) fall upon growers to implement. But a recent survey of California leafy greens growers conducted over the past two years shows just how much they are paying.

For example, growers reported their seasonal food safety costs more than doubled after the implementation of the LGMA, increasing from a mean of $24.04 per acre in 2006 to $54.63 per acre in 2007. For many growers, those costs are extremely difficult to absorb, note the study’s authors. The study was conducted by Shermain Hardesty, a University of California (UC) Cooperative Extension economist and director of the UC’s Small Farm Program, and Yoko Kusunose, a graduate student researcher in the program.

Economies of Scale“Previous research findings indicate a high degree of consolidation in the U.S. grocery sector, thus it is unlikely that growers have been able to obtain higher prices for their leafy greens in order to cover their food safety compliance costs,” they stated.

The costs are considerable, the authors conclude. The sum of the average modification costs specifically for the LGMA — primarily installing additional fencing and modifying bathroom/hand washing facilities — averaged $21,490, or $13.60 per acre. The sum of the modification costs and the seasonal food safety costs — field monitoring, water testing, personnel training, etc. — was $68.23 per acre, or nearly 1% of growers’ average lettuce revenues.

However, because it appears that growers may have excluded costs when reporting their seasonal food safety costs, the authors surmise that a combined per acre cost to implement the LGMA is more on the order of $100.

Larger growers appear best able to absorb these costs, mostly because of economies of scale, the authors note. For example, the seasonal food safety cost for medium-sized growers — those with revenues of between $1 million and $10 million — were 159% higher than the average cost for large growers with revenues greater than $10 million.

In their summation, the authors note that the LGMA is just one of many sets of food safety requirements, with others mandated by either the federal government or large chain stores.

“It is essential that the proliferation of public and private food safety standards be addressed, while at the same time recognizing that the one-size-fits-all approach is not appropriate,” they conclude. “Regulators, researchers, retailers and food service operators, growers, and other produce industry leaders must communicate and collaborate to develop standards based on sound science and spread the compliance costs equitably to maintain a diverse leafy greens production system that is sustainable for the long term.”

LGMA Guidelines

“In the spring of 2007, a group of California handlers of leafy greens established the Leafy Greens Products Handler Marketing Agreement (LGMA) in response to the 2006 E. coli outbreak that was attributed to spinach grown in the Salinas Valley.” That’s the first line of the research brief by Shermain Hardesty, a University of California (UC) Cooperative Extension economist and director of the UC Small Farm Program, and Yoko Kusunose, a graduate student researcher in the program. Today, they note that 99% of the leafy greens grown in California are produced under the auspices of the LGMA.

But what does the LGMA actually entail? This question is particularly relevant today, as there is a push among industry leaders to pass a national version of the California agreement. The following is an abridged version of a summary by the authors of the LGMA’s provisions. The complete set of requirements can be found online at: www.caleafygreens.ca.gov/members/documents/LGMAAcceptedGAPs07.10.09.pdf.

Environment: Risk factors from the growing environment include past flooding, the use of land adjacent to growing fields, and intrusion by animals. Growers are expected to document past flooding, avoid planting after flooding, maintain buffers between growing fields and
animals, and septic leach fields, etc.

Water: LGMA established maximum allowable levels for generic E. coli in irrigation water, and growers must monitor and document levels through regular sampling and microbial testing at all sources and points of use. They must also provide a description of their water systems.

Soil Amendments: Growers must show that all non-synthetic soil amendments or crop treatments do not contain animal manure, or, if they do, that the manure has been heat-treated or composted. In addition, all such amendments must be tested for Salmonella, E. coli 0157:H7, etc.

Worker Practices: Growers must provide field toilets and hand-washing stations that must be regularly cleaned, serviced, and stocked with supplies. Ongoing training sessions and signs must indicate rules regarding hand washing, etc.

Field Sanitation: Potential cross-contamination between leafy greens fields and other fields must be avoided through the segregation or cleaning of equipment. Any potential contamination from risk sources must be dealt with in accordance with standard operating procedures. A food safety harvest
assessment must document — for each growing block — cleaning and sanitation procedures, equipment storage procedures, and any evidence of animal intrusion during the growing season.

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