Author: DRC

CanadaGAP® is a program developed in Canada to promote Good Agricultural Practices (GAPs) for fruit and vegetable suppliers.

CFIA has recognized CanadaGAP as a model system for food safety preventative controls for the horticulture sector. Based on a complete CFIA-conducted comparison of CanadaGAP with the Safe Food for Canadians Regulations (SFCR), CFIA has determined that the food safety elements of the SFCR are addressed 100% by CanadaGAP program requirements. In other words, there are no food safety preventative controls contained in the SFCR that are not already covered by CanadaGAP program requirements.

CanadaGAP has also achieved international recognition and is officially benchmarked to the Global Food Safety Initiative (GFSI) for certification options B, C, and D (for repacking and wholesaling). GFSI is an international benchmarking scheme that evaluates food safety programs against a set of requirements agreed on by retailers, manufacturers and other stakeholders. https://link.spamstopshere.net/u/49159f5a/DsOmr72d6RGx-HsJh3soMg?u=http%3A%2F%2Fwww.mygfsi.com%2F

GFSI recognition of CanadaGAP was first granted in 2010, renewed in 2013 and re-benchmarking to the latest version of GFSI requirements (Version 7.1) was completed in June 2018.

Launched in 2008, the program has grown to include over 3,100 participating companies from across the Canadian and U.S. fresh produce industry. Audit services are available from two certification bodies operating across Canada and in the U.S. One certification body is also approved to offer CanadaGAP audits in Latin America.

CanadaGAP has maintained an updated a series of resources first published in 2017 on the CanadaGAP website. The purpose of these materials is to help CanadaGAP-certified companies with training employees, interpreting the technical requirements of the program, and understanding how certification can help them to meet regulatory requirements whether in Canada or the U.S. Among the resources available is “Information for Canadian exporters to the United States about the Foreign Supplier Verification Program (FSVP)”, which can be found at  www.canadagap.ca under Tools / “Food Safety Links”.

Today, many farm markets are open for business 12 months of the year but there is little question as we head into early summer and fall that these are the peak months for farm market operators and consumers alike.

As part of DRC’s outreach initiative and preparedness for the Safe Food for Canadians Regulations (SFCR), a series of self-assessments  was developed to assist persons in determining their need for a DRC membership to ensure compliance with the SFCR regulatory requirement. The SFCR requires that persons who buy, sell, import or export fresh fruit or vegetables be a member in good standing of the DRC, unless excepted by the regulation.

One of the business categories in the series is Farm Market Vendors & Other Direct to Consumers. When considering this category, it is important to begin with an established definition:

Farm Market Vendor: a grower or other person who conducts sales at a farm market, market stall or roadside stand directly to consumers.

In some instances, a farm or production unit may have a separate legal entity for marketing purposes. Depending on the nature of the transactions and the product’s final destination, a DRC membership may be required for the marketing entity, which could be a farm market.

The self-assessment includes a number of Q&A scenarios, including:

• I supplement my production and/or vendor sales with produce purchased from other producers located in a province other than my place of business or farm market/stall location. (DRC membership required)
• I supplement my production and/or vendor sales with produce purchased from other producers located within my province for sales in a province other than that of my place of business or farm market/stall location. (DRC membership required)
• I pack, ship and sell only fresh fruits or vegetables that I have grown myself as a single business entity at a farm market or roadside stand, as well as to another province and/or internationally. (DRC membership not required)

There are numerous business and marketing frameworks for farm markets or marketing entities. To access the self-assessment to determine if your farm market or marketing entity requires a DRC membership, visit https://fvdrc.com/wp-content/uploads/2017/11/4_SFCR-DRC-Farm-Market-Direct-to-Consumers-Self-Assessment.pdf

If you want to know about the rights and responsibilities of product handled on consignment, this section of DRC’s Trading Standards can be used as your guide. These are the most important elements to take into consideration when members accept produce for sale on consignment:

• Reasonable care, diligence in disposing of the produce, and prompt sales of the product in a fair and reasonable manner are required
• The consignee may not employ other persons or companies to dispose of all or part of the product without authorization from the consignor
• A consignee is not authorized to sell product on consignment without the consignor’s consent
• Averaging or pooling of sales is not permissible unless written consent from the consignor is given
• An itemized account of sale must be submitted by the consignee. An accurate report of sales and expenses must be provided
• Expenses or charges must be supported by proper receipts or invoices
• A consignee is entitled to a commission which the percentage should have been previously discussed
• A consignee is not allowed to sell all or part of the product to a person or firm over which they have either direct or indirect control

Another important issue to consider is that, unless otherwise agreed to by the parties, the consignee is not required to request an inspection to demonstrate the condition of the product upon arrival. The only time the consignee is required to request an inspection is when disposing of more than 5% of a load in order to demonstrate that the product has no commercial value.

DRC Board of Directors and Annual General Meeting (AGM) was held May 23-24, 2019 in Québec City, Canada. DRC reported to members and the Board on key DRC priorities including DRC’s role under the Safe Food for Canadians Act, Membership, Marketing, and Trading Assistance. The Board also received updates from the Canadian Food Inspection Agency on Destination Inspection services and implementation of the new Safe Food for Canadians Regulations. During the AGM, the members elected Frank Pagliaro (Canada), Mike Stuart (USA), Bret Erikson (USA) and Gonzalo Aguilar (Mexico) as Directors.

The Board and Staff were also hosted by Patates Dolbec Inc. to a tour of their ultra-modern facilities. Patates Dolbec Inc. is a family business that, over the last 50 years, has earned itself an enviable reputation in the agri-food sector through hard work, a tireless passion for agriculture, and a dynamic team that brings experience and innovation to potato farming. The board was especially impressed by their Factory 4.0 which includes a robotic train and other cutting edge technology. On behalf of the Board a big thank you to Stéphan and Josée for an amazing tour.

Q: We received a load of mixed vegetables from one shipper and only a portion of the load was showing freezing damage. The rest of the product pulped adequate temperatures and had no indication of freezing damage.  How is it possible that the pulp temperatures can vary so much within the trailer?

A: To understand how this could have happened, we begin by reminding you that trailers are responsible for maintaining temperatures during transit. They are not meant to cool down or warm up the product. Three main reasons come to our mind that could cause freezing damage to only a portion of a load: a) Product loaded warmer than the reefer unit set temperature; b) bad loading pattern blocking the airflow or blocking the air chute; or, c) poor trailer insulation or extreme weather conditions.

a) Product loaded warmer than the set temperature

The BOL indicates temperatures are to be maintained at 33^oF. The product at loading is pulping 38^oF; the freezing point is 30.5^oF. The reefer is set at 34^oF degrees on continues mode. When this occurs, the return air sensor is going to start picking up the temperature of the product (38^oF) and the message to the reefer unit would be that it needs to lower the discharged temperature immediately to lower the temperature in the trailer. Therefore, the product exposed directly to the discharge air from the chute may exhibit freeze damage because the discharged air temperature could be lower than the freezing point of the product.

b) Bad loading pattern blocking the airflow or blocking the air chute

A loading pattern that does not allow the air to circulate properly may result in the return air sensor reading temperatures above the reefer unit set point, therefore sending the message that cooler air needs to be discharged. Normally a blocked air chute will result in warmer pulp temperatures at the front of the truck and cooler pulped temperatures at the back of the truck.  This is because as the front of the truck begins to warm up, the reefer unit believes it needs to expel colder air, and thus the product nearest to the end of the chute gets chilled.

c) Poor trailer insulation or Extreme Weather conditions

Product loaded too close to the walls on a trailer with poor insulation may create freezing damage to pallets nearest to the sides of the trailer. This could be the result of harsh temperatures during the winter or hot outside temperatures during the summer. Similar to the previous example, to compensate the reefer unit will usually discharge cooler temperatures or warmer temperatures than the set point in order to correct the problem.  For instance, if a truck travels through the northern US or Canada during the winter and it is not properly insulated, there is a strong likelihood that the pallets closest to the exterior walls could experience some freezing damage. Conversely, despite proper trailer insulation, sometimes extreme weather conditions such as severe cold or intense heat may influence the temperatures inside the trailer.

Q, We bought a load of watermelons under FOB DRC Good Arrival terms. The load was received on a Thursday evening and on Friday morning we contacted the shipper to let him know that we were requesting a CFIA inspection. The CFIA inspection was performed on Monday. The results of the inspection show the product failed to meet DRC Good Arrival by 1% and we have already sold a portion of the product. After several discussions with the shipper, they are only willing to offer a small price adjustment. What would be DRC’s advice on this matter?

A.Jaime Bustamante: First of all, you took the correct actions by informing the shipper and requesting the inspection in a timely manner and proceeded in accordance with DRC Trading Standards. While we understand that you are not in control of how long it takes to get the product inspected, as a FOB buyer, this time delay falls under the buyer’s responsibility. Unfortunately, you have three elements against you in trying to claim damages against the shipper:

1. Timely Inspection – The inspection was performed four days after arrival.
2. DRC Good Arrival Guidelines- The inspection report indicates the product failed only by 1% which could mean that if inspected upon arrival, the product could have met DRC Good Arrival tolerances.
3. Representative Sample – Because a portion of the product was not available for inspection, it needs to be determined if the amount of product inspected is considered a representative sample. The rule of thumb for product inspected to be considered a representative sample is: “more than 75% of the load needs to be available for the inspection”.

As a side note, by receiving product and selling a portion of it prior to getting it inspected, you have lost the right to reject that product. You can offer the shipper to move the product out but, they will be under no obligation to accept it. Unloading the product for any other purpose than an inspection is an act of acceptance.

We would also like to point out that, in our experience, a lot which fails DRC Good Arrival Guidelines by 1% four days after arrival would almost surely have made good arrival if inspected the day it arrived.

The common definition of a broker is “an agent who negotiates a contract of purchase and sale”. According to DRC Trading Standards, a broker who fails to perform any specification or duty in connection with a transaction may be held liable for damages happening as a result thereof. What are those specifications or duties?

• Fully inform the parties involved in the transaction of all the terms and conditions proposed.
• Submit to the seller and buyer a proper Memorandum of Sale or Confirmation of Sale, including all of the essential details of the agreement such as the INCOTERM, product description, price, brokerage fees or commission, payment terms, and any other detail.
• The Memorandum of Sale or Confirmation of Sale must identify the party who engaged the broker. If not identified, it would be assumed the broker was engaged by the buyer.
• The broker will be entitled to payment of brokerage fees by the party who engaged them to act as a broker.
• A broker may not be entitled to brokerage fees if there has been a failure to perform its duties.
• A broker does not guarantee the performance of the contracting parties but is entitled to receive prompt payment of brokerage fees when a valid and binding contract is negotiated.
• Unless specifically agreed, the broker is not responsible for payment to the seller by the buyer.
• A broker who acts in a dual capacity, either as a true broker or as a buying broker, must clearly disclose this status prior to completion of the contract.
• A broker has no authority to file a claim with a carrier. However, if the broker comes into possession of valuable information related to a carrier claim, the seller/buyer should be advised promptly of the information.

It is important to understand that this definition is not meant to cover the rights and responsibilities of a transportation broker.  However, there are some similarities and for those in logistics or who are transportation intermediaries, we suggest a review of Section 3 of DRC’s Transportation Standards.

Recently DRC had the pleasure of exhibiting at the CPMA’s 94th Annual Convention and Trade Show in Montréal, Québec from April 2-4, and the 5^th annual Viva Fresh Expo which took place in San Antonio from April 25-27.

Thank you to everyone who came by the DRC booth at these events or who took time to speak with us on the trade show floor. It was great to see many familiar faces, catch up with DRC members and meet new contacts. As always, we appreciate the many questions posed by both members and non-members. A common theme among the many discussions was the Canadian regulatory changes that came into force in January 2019.

Both shows offered great educational opportunities. CPMA’s Learning Lounge and business sessions were informative and thought provoking and the Educational Sessions at Viva Fresh generated numerous discussions on issues affecting the produce industry. It is always insightful to hear firsthand different perspectives and concerns based on an individual’s real-life experiences and position in the produce supply chain. Such opportunities inspire us to continue to grow, make improvements and enhance the manner in which we assist members.

As we continue to attend events we look forward to hearing from our members and potential members as we work to enrich and add further value to the range of services DRC provides to industry.

The Canadian Food Inspection Agency recently issued the following reminder to all importers:

“UPDATED LINK

As many commercial importers and customs brokers are aware, the Canadian Food Inspection Agency (CFIA) has been encouraging its clients to submit their release requests through the Single Window Initiative (SWI) Integrated Import Declaration (IID) when declaring CFIA regulated imports to the Canada Border Services Agency (CBSA).

Soon, the SW IID will be the only electronic declaration option for commercial importers and customs brokers who declare CFIA regulated imports. It will replace the EDI Other Government Department (OGD) Pre-Arrival Review System (PARS) and the OGD Release on Minimum Documentation (RMD) legacy systems.

While many CFIA clients are already using the SW IID, we strongly encourage that all CFIA regulated commercial importers and customs brokers make the switch to the updated import declaration system as soon as possible.

To learn more about the SW IID and its benefits, read our notice to industry.”

This reminder is connected to an article published in DRC’s blog in March 2019 titled: “Canadian Confirmation of Sale (COS) for CFIA”

The term dumping has been thrown around the various trade media as of late, but what exactly is dumping?  In terms of international trade, the Merriam-Webster dictionary defines dumping as “the selling of goods in quantity at below market price.” In this blog post we will breakdown the general concept of dumping a little further, but without going into the specifics of the various forms of dumping, such as price to price dumping and price cost dumping.

Dumping involves two aspects.  The first, the exporter, or a group of exporters working together, is selling a product, to an importer at a price that is lower that what the exporter would sell in their domestic market or would cost the exporter to produce the product.  The second aspect of dumping is the quantity of goods that is sold.  Dumping involves the repeated selling of large quantity of goods.  These two aspects in conjunction would eventually grant the exporter(s) the ability to control a percentage or a segment of the foreign market.  Dumping is a form of price discrimination.  Price discrimination occurs in many forms, but they all involve selling the same product at different prices to different groups of consumers.  Regarding international trade dumping, customers of the importing country are being favoured by being able to purchase a commodity at a lower than market price. This reduced price ensures that the importer continues to purchase from that exporter to continue customer patronage and maintain a competitive selling advantage.

This sounds great for the bottom-line customers, however, there are two main drawbacks regarding dumping.  Dumping leaves little room for other international exporters and domestic businesses the ability to compete against that exporter.  Then, once the exporter has a good grasp on that foreign market and other businesses are no longer able to successfully compete or seen as a threat, the exporter can now control the supply, quality and price in the future of that commodity, thus having a monopoly on the market.

With so much attention and unfavorable press, one would think that the practice of dumping would be prohibited.   The World Trade Organization (WTO), the only organization that has the authority to deal with rules of trade between countries does not prohibit dumping, nor does it act against exporters accused of dumping.  The WTO does however monitor and regulate what measures a country can and cannot take when they believe that an exporter is dumping product in their country.  Unless a country can prove that exporter is dumping product and causing harm to domestic industries there is often no recourse against dumping.

As a result of these factors, most countries are not a fan of dumping, and aim to prevent it as opposed to combatting it. Usually, when a country enters a free trade agreement with other countries, there is a stipulation surrounding dumping and the imposing of tariffs and quotas to exporters to be proactive against dumping.  Taking this proactive approach has been more successful to combat dumping, as for a country to prove that dumping is occurring is a costly and time-consuming activity.

So why would an exporting country risk industry backlash and financial recourse if dumping is proven?  In the short term, dumping can benefit the exporting country with job creation and sustainability of employment.  As the exporter continues to increase their market share in the importing country, individuals will be able to maintain their employment, as well new jobs being created as the exporter foreign market share increases.  On the flip side, in the importing country, dumping has the ability to promote innovation in domestic industries as well as other international competitors, in their quest to remain current and competitive.  Domestic companies are going to need to get creative and find additional ways to keep or recoup their share of their domestic market and grow internationally.

In conclusion dumping is a complex issue with many factors, and numerous arguments can be made to be in favour of or to oppose dumping depending on your position or role.  There are valid points that an exporter can make, as well as importers, government and even the consumer.