This blog is reprinted from my summer 2013 newsletter.
I would like to share a few brief insights from two worthwhile articles from the International Journal of Sociology of Agriculture and Food, Volume 20. The first article, Private Agri-food Standards: Contestation, Hybridity and the Politics of Standards, examines how and by whom private standards are created. Some of the questions addressed include who is included or excluded from the standard-setting process, how benefits and burdens are distributed, how trust, accountability and legitimacy are created, and what and whose values are reflected in the standards?
While public standards are established by government authorities and enforced through laws and regulations, private standards are voluntary and enacted through market forces (e.g. consumers preferring certified products). At times however, public regulations incorporate private standards (e.g. European Union accepting voluntary standards certification to meet biofuels sustainability criteria) and private standards adopt public standards (e.g. public food safety standards are often required in private standards). It is important for standards operating in global trade where rules and regulations are largely voluntary to have credible and authentic governance mechanisms.
The distribution of power (and costs and benefits associated with private standards) in the supply chain, a topic about which I am passionate, is also discussed in the article. The authors note that very large retailers have strong purchasing power globally and have established themselves as the primary link to consumers. Retailer-led standards can centralize their power further leaving small-scale producers and other value chain operators with little leverage.
The article suggests that private standards are no longer simply focused on reducing transaction costs and increasing market efficiencies; rather, they are now tools that brands and their suppliers use to enter new markets, coordinate efforts, and establish niche products or markets.
Another effect that is emerging from the proliferation of private standards is their ability to define "good" and "bad". This can have indirect effects on companies who adopt standards ("good" companies) and those that don't participate at all (inferred as "bad" companies). These are all topics that should be considered when promoting, using or developing private standards.
The second article, Pushing the Boundaries of the Social: Private Agri-food Standards and the Governance of Fair Trade in European Public Procurement, looks at how private standards such as fair trade and others are integrated into European public procurement policy and programs, including how the integration of ethical standards creates a new level of governance in the global agri-food system.
The authors explore how public procurement can recognize the social movement through private standards, how legitimate these standards are to lawmakers and decision makers, and what issues can arise from the use of private standards in public procurement.
An interesting point, referenced to Arce and Long (2007), is a potential shift from government's imposing rule from a central entity to governance that brings together different interests, knowledge and values to shape solutions that work under their conditions and supports their shared vision. For example, legal and legitimacy considerations may shift as societal expectations of companies increase. Taking a conservative approach to avoid legal issues may lead to scrutiny of a company's actions and authenticity related to other issues that society feels are equally important.
The article concludes with a question of whether private standards will become common tools governments could use to promote ethical consumption. Regardless, the different role private stakeholders play in creating and implementing private standards and the way they are used by governments is creating new complexities in the interaction of public accountability, market principles and civic activism.
While I believe private standards have had a positive contribution to the sustainability movement, I also think it would be wise to take a step back and learn from our experiences to advance the use, effectiveness and governance of existing and future ones.
I would like to share a few brief insights from two worthwhile articles from the International Journal of Sociology of Agriculture and Food, Volume 20. The first article, Private Agri-food Standards: Contestation, Hybridity and the Politics of Standards, examines how and by whom private standards are created. Some of the questions addressed include who is included or excluded from the standard-setting process, how benefits and burdens are distributed, how trust, accountability and legitimacy are created, and what and whose values are reflected in the standards?
While public standards are established by government authorities and enforced through laws and regulations, private standards are voluntary and enacted through market forces (e.g. consumers preferring certified products). At times however, public regulations incorporate private standards (e.g. European Union accepting voluntary standards certification to meet biofuels sustainability criteria) and private standards adopt public standards (e.g. public food safety standards are often required in private standards). It is important for standards operating in global trade where rules and regulations are largely voluntary to have credible and authentic governance mechanisms.
The distribution of power (and costs and benefits associated with private standards) in the supply chain, a topic about which I am passionate, is also discussed in the article. The authors note that very large retailers have strong purchasing power globally and have established themselves as the primary link to consumers. Retailer-led standards can centralize their power further leaving small-scale producers and other value chain operators with little leverage.
The article suggests that private standards are no longer simply focused on reducing transaction costs and increasing market efficiencies; rather, they are now tools that brands and their suppliers use to enter new markets, coordinate efforts, and establish niche products or markets.
Another effect that is emerging from the proliferation of private standards is their ability to define "good" and "bad". This can have indirect effects on companies who adopt standards ("good" companies) and those that don't participate at all (inferred as "bad" companies). These are all topics that should be considered when promoting, using or developing private standards.
The second article, Pushing the Boundaries of the Social: Private Agri-food Standards and the Governance of Fair Trade in European Public Procurement, looks at how private standards such as fair trade and others are integrated into European public procurement policy and programs, including how the integration of ethical standards creates a new level of governance in the global agri-food system.
The authors explore how public procurement can recognize the social movement through private standards, how legitimate these standards are to lawmakers and decision makers, and what issues can arise from the use of private standards in public procurement.
An interesting point, referenced to Arce and Long (2007), is a potential shift from government's imposing rule from a central entity to governance that brings together different interests, knowledge and values to shape solutions that work under their conditions and supports their shared vision. For example, legal and legitimacy considerations may shift as societal expectations of companies increase. Taking a conservative approach to avoid legal issues may lead to scrutiny of a company's actions and authenticity related to other issues that society feels are equally important.
The article concludes with a question of whether private standards will become common tools governments could use to promote ethical consumption. Regardless, the different role private stakeholders play in creating and implementing private standards and the way they are used by governments is creating new complexities in the interaction of public accountability, market principles and civic activism.
While I believe private standards have had a positive contribution to the sustainability movement, I also think it would be wise to take a step back and learn from our experiences to advance the use, effectiveness and governance of existing and future ones.
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