In March 2010, the German Association of Food without Genetic Engineering (VLOG) was founded.23 It is a multi-stakeholder association whose members are retailers, processors, farmers, traders, consumers, and consumer and environmental NGOs. The Ministry of Agriculture exclusively commissioned the VLOG to issue and administer licenses for the use of the uniform non-GMO label. The VLOG operationalizes the GGEA. In March 2013, VLOG set the first version of its non-GMO production and certification standard.
Figure 1 shows how the EU regulations on GMOs and labeling and traceability build the basis for the GGEA, which further sets minimum requirements for a private non-GMO production and certification standard. The challenge for non-GMO certification is that the GMO attribute that falls under the mandatory labeling scheme can mostly be detected through objective inspection tests24 whereas the attribute cannot typically be detected in livestock products derived from GM feed.25 To distinguish the detectable and undetectable attribute, Jahn et al. (2005) refer to the first one as a credence attribute and the latter as a Potemkin attribute. Labeling a Potemkin attribute requires moving from an end-of-line inspection to a quality assurance systems (QAS) of the whole supply chain (e.g., to distinguish livestock products derived from GM feed from products derived from non-GMO feed). QAS rely on documentation of production processes and practices at all stages of the supply chain, and often on third-party auditing and certification (Holleran et al., 1999).
Figure 2 shows how the credence attribute can be transformed into a Potemkin attribute along the supply chain. The transformation takes place at the farm level, where GM or non-GM feed is used. Other raw materials used by processors can either be credence or Potemkin
23 www.ohnegentechnik.org
24 Exceptions are, for example, sugar and oil, which fall under the mandatory labeling regulation if they are derived from GM sugar beet or GM soybean, respectively, even though the derived product does not contain GMOs. 25 The European Food Safety Authority stated in 2007 that “… no technique is currently available to enable a valid and reliable tracing of animals products (meat, milk, eggs) when the producer animals have been fed a diet incorporating GM plants.” (EFSA, 2007).
55 attributes. For example, the GM attribute in maize flour is detectable and hence a credence attribute, but it is undetectable in sugar and hence a Potemkin attribute.
Figure 1. Different levels of the GMO/non-GMO production standards (based on Trienekens and Zuurbier (2008)); VLOG = multi-stakeholder non-governmental organization
In addition to the licenses for the final product suppliers (here: food processors), the VLOG licenses feed suppliers (e.g., feed traders, feed processors). Through the certification of feed suppliers, food processors can get direct information about farmers’ feed purchases, which lowers processors’ search, negotiation, and monitoring costs as compared to evaluating the purchase information of many farmers. Farmers, too, benefit from the direct certification of feed suppliers as a means of reliable feed monitoring without interference with their entrepreneurial autonomy. This interference, farmers stated in a survey, would be one of their main reasons to restraining them from non-GMO production (Schreiner and Latacz-Lohmann, 2015). Like other private standards (e.g., for vegetable markets in Kenya as described by Jaffee (2003)), the non-GMO private standard creates new forms of cooperation vertically (e.g., feed suppliers and food processors) and horizontally (e.g., competing retailers cooperate in standard setting). Private production and certification standard by VLOG German EC Genetic Engineering Implementation Act (GGEA)
EU regulations concerning GMO food and feed production, traceability, and labeling (No. 1829/2003 and No. 1830/2003)
56 Figure 2. Transformation of a credence attribute into a Potemkin attribute in the livestock product supply chain
The dashed lines in figure 3 show the linkages among members of the VLOG: stakeholders in the supply chain, third-party certifiers, and consumer and environmental NGOs. VLOG grants licenses to producers of the final product (e.g., processors) and to feed suppliers, and monitors third-party certifiers. Third-party certifiers must sign a contract with the VLOG (e.g., to regularly participate in training courses) for obtaining the allowance to audit and certify the label licensees.
Figure 3. VLOG membership of various stakeholders, licensing of non-GMO label, and third-party auditing and certification (Note: some members are not licensees, and some licensees are not members)
Retailer Processor (e.g., dairy company) Livestock farmer Feed trader/processor Feed producer (crop farmer) Potemkin attribute Credence attribute Other raw materials
(e.g., sugar) Credence or Potemkin attribute Potemkin (and potentially credence) attribute Retailer Processor (e.g., dairy company) Livestock farmer Feed trader/processor Feed producer (crop farmer) VLOG Consumer & environmental NGOs Third-party certifier Membership
57 In the presence of a public regulation (such as the GGEA), the private non-GMO standard is not required for labeling but reduces producers’ uncertainty through clarification of aspects of monitoring, control, and certification. To guarantee, that the quality of the non-GMO Potemkin attribute (i.e., an attribute that cannot be detected through tracing) has been met, the use of the non-GMO label is permitted only after prior prima facie evidence to the VLOG that all legal requirements are fulfilled.
Prima facie evidence is based on documentation. In addition, third-party certification is mandatory for prima facie evidence, depending on:
(1) the complexity of the production process (e.g., are GM varieties approved for cultivation in the country of origin of the raw materials? Do the animal raw materials originate from contract farmers or not? Does the company also buy raw material from the spot market?) (2) the raw materials used that could cause commingling with GMO material (e.g., does the
raw material producer also produce similar food that is not suitable for non-GMO production? Does the product contain more than five ingredients?)
(3) the size of the licensee’s company (e.g., if the total turnover is more than 50 million euros per year)
The non-GMO standard requires lower certification costs for smaller firms (e.g., measured by turnover), because these firms are not required to use third-party certification, unless some of the other criteria mentioned above apply.