Food safety starts at the beginning of the food supply chain;. from farm to fork, all food and agriculture companies are at risk to food safety.

"As a food and agricultural financier in Asia, Rabobank emphasises sustainability-oriented banking and sees a shared responsibility in promoting food safety along the whole food value chain," said Robert Jan van Zadelhoff, Head of Rabobank Asia.

Fragmentation in China

Food safety risks are spread along the value chain from farm to fork. "The major challenge in China is fragmentation. Each step in the food chain may take place in different regions and by different players – starting from input supply, feeding, slaughtering and processing to distribution," said Jean-Yves Chow, Senior Analyst, Rabobank North East Asia.

In recent years, China's Central Government launched a number of policies and regulations aimed at enforcing food safety standards. Yet, inefficient control and penalty measures resulted in a number of food incidents in China, like the Melamine milk scandal in 2008.
 
Developing quality control

However, food safety issues are not confined to one country and its national boundaries. Today's food safety chain is getting longer, more complicated and becoming more international. "Discrepancies in policies across borders are inevitable both in design and enforcement," said Brady Sidwell, Head of Food & Agribusiness Research and Advisory, Rabobank North-East Asia.

"Transparency and quality control will help companies in China to build confidence and acceptance of their products both at home and abroad," said Gilles Boumeester, Head of Rabobank North East Asia.

Finding perspective and solutions

"We need solutions for food safety related to standards, shared responsibilities and supply chain management through alliances, procurement and marketing agreements," said Sidwell.

Before coming up with solutions, we need to understand the importance of food safety. "From a corporate perspective, food safety is closely associated with a brand's reputation. Adverse food safety news will influence consumer confidence. Suppliers who cannot satisfy product safety standards will lose business in the end," said Sidwell.

Investing in the value chain

A strong regulatory framework and executive control are not enough to maintain food safety standards, said Chow. "It is necessary to invest into areas such as quality control, auditing and record-keeping to monitor and enhance the quality of food production, and to increase value chain accountability as well as transparency."

"Zero risk does not exist, thus potentially any company could be at risk. Companies who have a contingency plan will be in the best position to avoid excessive food safety exposure," Chow continued.

"Our Food & Agri specialists always take food safety into account when working and talking with our clients to identify the investment opportunities and propose risk management strategies," concluded Robert Jan van Zadelhoff, Head of Rabobank Asia.

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