Know the Issues to Protect Your Freedom Agri-View: Dairy News

People in the United States shouldn’t have to think too hard about what to be thankful for this week. For starters, most Americans can simply gaze out over their Thanksgiving table and be thankful for a plentiful food supply that is regarded as one of the safest in the world.

Along with the food supply, we are reminded of our freedom. We have the freedom to purchase conventionally-raised foods, organic foods, locally-produced foods, grass-fed foods, and the list can go on. All of these choices come from our nation’s hard-working farmers that have the freedom to operate their farms in a way that suits their personal and professional style.

Lately, some producers are questioning if their freedom to operate is in jeopardy. Processors and retailers like Smithfield, Kroger, Dean Foods and Bon Appetit are taking on issues in the food system and asking their producers to use specific production practices.

“It really feels like the scales are weighted against (animal agriculture),” Charlie Arnot said at the National Dairy Issues Forum last week in Madison. “How do we do a better job of shifting the scale?”

Arnot is the founder of CMA Consulting in Kansas City, Mo. He and his CMA team work with companies and organizations across the food chain, including leading producers, processors, restaurants and retailers. Prior to consulting, he was vice president of communications and public affairs for Premium Standard Farms and was a key player against the gestation stall ban in Arizona.

Developed by the Professional Dairy Producers of Wisconsin (PDPW) the National Dairy Issues Forum set out to take a look at the issues surrounding food today and their potential impact on the nation’s dairy industry.

“We have seen our share of issues in the food system and the pace continues to increase,” Arnot said. Once you learn the theory of issues management, you can begin to develop a strategy.

Arnot defined issue management as “the process used to align organizational or industry activities and stakeholder expectations.”

When there is a gap between performance and stakeholder expectation in any relationship, be it business or personal, you’re going to have conflict. The key to a solution is closing that gap. “We’ve worked hard at helping people understand the science,” Arnot said of the agriculture industry’s previous strategy, “but that’s no longer working.”

It’s time to take another look at the stakeholders. On one end you have “Producers Opposed to Other People or stubborn old poops that don’t want to change,” he said. On the other end are “Citizens Against Virtually Everything, which could appear like cavemen.” The real stakeholders are the rational majority. These are your customers, consumers and voters. “Don’t get too focused on those radicals,” he cautioned.

It is critical to manage issues because “one big issue can put you out of business,” Arnot said. By managing issues you can avoid an expensive crisis which may include litigation, additional legislation or regulation; better position yourself to manage a crisis; build your company or industry credibility and image; and protect your freedom to operate.

“When we define the issue, we control the debate,” he said.

It helps to stay in front of the issue and in order to do that you need to know how issues evolve. The first phase is the emergence phase, this can last hours or years, he said. It is here that issues are looked at by scientists and academe, followed by interest groups. At the tipping point, the media and the general public get involved. When there is enough of the public interested the politicians jump in and the issue has moved into the crisis/public positioning phase, which is followed by resolution.

“The best time to get involved is during the emergence phase. That’s the time you have the best influence,” Arnot said. However, he didn’t say it’s easy. First of all you need to recognize the issue, determine its likely impact and then get enough leadership to take action.

“Historically we’ve waited until there’s a tipping point,” he said, noting then you deal with crisis management, which can be more costly than emergence phase management.

Studying the issues early on requires a management technique, he said, “otherwise everything looks like an issue.”

Arnot relayed some of the challenges he believes the dairy industry is facing ahead.

- Producing food for the 99 percent of Americans who count on us for one of the necessities of life in a noble pursuit, yet we’re no longer given credit for it.

- How do we earn and maintain the social license we need to feed 400 million Americans and 2.7 billion more people around the world in 20 years?

- Today the market is replacing regulators and legislator in establishing controls for the supply chain and the marketplace moves more quickly than regulation.

- We need an ethical foundation and scientific verification for our decisions to protect our freedom to operate.

- We need a sustainable platform that allows those in the food system to build the trust we need to earn the social license that protects our freedom to operate.

Freedom to operate “is really all you are asking,” Arnot said. “To have the freedom you need to be granted a social license.”

By Arnot’s definition, a social license is “the freedom to operate with minimal formalized restrictions (legislation, regulation) based on maintaining public trust and the belief that our activities are consistent with social expectations and the values of the community and other stakeholders.”

“To do that they have to trust us,” he said, adding there are three factors that drive trust - influential others, competence and confidence. Influential others could be dieticians, doctors or people you trust. Competence is technical capacity and the science to prove something is right. Confidence is shared values and the ability to count on someone to do the right thing.

A social license is allowed in a high trust environment. In that environment things are flexible, responsive and at a lower cost - “all things every business operator is looking for,” he said. This is more common in small towns where everyone is very informed.

A low trust environment is rigid, bureaucratic and at a higher cost. This situation is social control. Arnot stated that no sector has ever moved back to a social license once a tipping point brought it into social control. An example of social control would be manure management. North Carolina has prohibited the construction of open air lagoons because there is enough low trust in those that manage the lagoons.

With a social license the social benefit is perceived greater than the social cost. A market intervention, such as customer mandates or consumer boycott, can shift the balance to social control where the social cost perceived is greater than the social benefit. This is sent back in the form of regulation or registration and permitting fees. The tipping point is in play today round food safety and animal welfare, Arnot said, and the marketplace is now having an impact on the system.

Professionals have maintained a social license over time because people trust professionals. By transitioning to the professional model, others can earn trust too. Through ethical standards, code of conduct and accountability to stakeholders they obtain confidence. Best practices, certification and continuing education allow them to have competence.

By articulating ethical standards and a code of conduct you can build confidence and engage others, he said. Once you have engaged your stakeholders and influential others it’s time to demonstrate your competence.

Through a consumer trust survey taken early this fall, Arnot was able gauge the levels of trust and responsibility consumers place on different aspects of the food system.

When it comes to food safety, consumers trust farmers and producers almost as much as they trust themselves. They find farmers and processors most responsible for food safety, but the gap is that they don’t trust the processors.

Consumers primarily held themselves responsible for good nutrition and obesity, but they also felt farmers, food companies and processors, and federal agencies were responsible for nutrition as well.

They held themselves responsible for environmental protection, along with farmers and federal regulatory agencies, but they do not trust the two later groups.

Producers are primarily responsible for the humane treatment of animals, yet consumers have only a moderate trust in farmers’ ability to do a good job and act in a manner consistent with consumer values and ethics, he said.

Arnot stressed that “we have to give customers, policy makers, community leaders and consumers ‘permission to believe’ that contemporary animal agriculture is consistent with their values and expectations.” Failure to do so could result in losing our social license to operate in terms of environment, animal health and production technology and practices.

“The driver of trust is confidence, not competence,” he said. “Do consumers believe you share their values and beliefs?”

Confidence must come first, but that doesn’t mean we can abandon science. We still need it to verify our practices.