Chain formation in the egg sector

Following the Fipronil crisis, several committees issued opinions on the measures needed to prevent the recurrence of similar cases. On the basis of research Foodlog concludes that these measures do not simply eliminate the risks, but that they do increase the costs for laying bird farmers. Risks such as Fipronil remain high because the average poultry farmer does not have sufficient room for professional risk management in his business operations. Foodlog argues in favour of an approach based on close chain formation. Farmers, suppliers and supermarkets can reinforce each other, but still have to break through the role-play that has been built up over the course of decades.

As a result of the Fipronil affair, Foodlog was commissioned by the province of Gelderland to launch the Pilot Project for Chain Integration in the Egg Sector. Gelderland is home to many players in this chain: rearing companies, feed suppliers, packing stations, poultry farmers and slaughterhouses.

Foodlog conducted interviews throughout the chain and advised on the formation of the chain project of a European retail formula that purchases Dutch eggs. 

If farmers, their suppliers and the companies that pack their eggs want it, they can make the difference, together with the retail trade, to professionally manage food safety and integrity risks. After all, confidence that the risks are properly covered and that they are buying what they think they are buying is essential for consumers when choosing the (digital) shop where they buy their eggs. 

Inaccuracy and clumsiness

The fipronil affair in the Dutch laying poultry sector in 2017 was a result of negligence, poor control procedures and cost pressure within the sector. The effect was exacerbated by irregularities on the part of the supervisory authority (NVWA). Against this background, the aim of the Pilot Project on Chain Integration in the Egg Sector was to determine the conditions under which food-safe, honest and profitable egg chains can be established on the basis of values that are attractive to consumers.

Treadmill

Foodlog concludes that the sector is locked in a supply-driven market where almost everything revolves around price. With the exception of minor exceptions (to the total volume), there is little focus on the joint development of values and certainties that consumers want to buy on a large scale. It is a kind of treadmill. All chain partners will continue to do so, because this is how the egg sector has developed.

Farmer goes 'wet' with unjustified trust

The many parties involved in the egg chain are hardly aware of each other's business processes. Each link does its own thing. Relationships between links are often short-lived and there is no eye for commercial values that they could live up to as a whole. 

The role of the farmer is crucial, because all the essential processes come together on his own property. However, the farmer is unable to act as manager of what Foodlog calls 'the egg factory'. He lacks the time and financial resources to monitor all processes and to take control of the egg chain. The poultry farmer trusts his suppliers and gets wet if there are unreliable parties underneath. 

Risks such as Fipronil are therefore still present in large numbers. In addition, the burden of controls is already high and will increase if the controls are carried out in accordance with the 22 recommendations of the Krouwel Commission adopted by IKB-ei. This Commission was set up to combat cases such as fipronil. In the opinion of Foodlog, however, the recommendations lead to (even) higher operating costs without any guarantee of improved food safety and integrity. 

Good Manufacturing Standard per chain

Foodlog proposes to establish its own Good Manufacturing Standard (GMS) within distinctive chains and calls on the parties to work together sustainably to this end. This saves operational costs in the long term and generates purchasing advantages that improve the farmer's margin. In chains that develop additional distinctions, this approach can also generate additional commercial margins. This provides the basis for better management of food safety and integrity risks, improving the operational result and increasing the commercial margin that the chain as a whole can earn. 

The use of digital tools contributes to greater transparency in the chain. Sharing data can save a lot of operational costs; duplication of checks is now being carried out in a multitude of different ways.

Translating lessons into practice

The lessons learned from the Pilot Project on Chain Integration in the Egg Sector can be used to take further steps to help parties in the egg sector, who want to make a difference together, to get started more quickly. Foodlog is in talks with various private parties in the sector to convert these ideas into new chains. Foodlog is convinced that this can create chains that deliver value for farmers, supermarkets and consumers.