canadian on-farm food safety delivery option identification and evaluation on behalf of the canadian...

Canadian On-Farm Food Safety Delivery Option Identification and Evaluation

on behalf of theCanadian Federation of Agriculture’s OFFS Delivery Options Committee

Final Report Discussion

November 29-30, 2006

Canadian On-Farm Food Safety Delivery Option Identification and Evaluation

on behalf of theCanadian Federation of Agriculture’s OFFS Delivery Options Committee

Final Report Discussion

November 29-30, 2006

AGENDAAGENDA

Consulting Objectives

Work Plan

Costs of Delivery

Options for Delivery

Next Steps

CONSULTING OBJECTIVESCONSULTING OBJECTIVES

To contribute to the determination of the most effective options that will support efficient delivery of producer-led on-farm food safety initiatives - to help remain competitive in production

to determine the current and projected cost of delivery of OFFS programs at the national and provincial level; and,

to identify and profile the options for delivery of OFFS programs.

WORK PLANWORK PLAN

Phase 1:Project Plan Development

Phase 1:Project Plan Development

Phase 2:Cost of Delivery Tool Development

Phase 2:Cost of Delivery Tool Development

Phase 4:Development of Delivery Options

Phase 4:Development of Delivery Options

Phase 3:Collection and Analysis of Data

Phase 3:Collection and Analysis of Data

March 20th, 2006 April 15th, 2006 June 15th, 2006 October 1st, 2006September 1st, 2006

Estimated timingEstimated timing

April 15th, 2006

COSTS OF DELIVERYCOSTS OF DELIVERY

Sources of the data: 21 participants

7 national 14 provincial / regional commodity sectors: dairy, chicken, egg, pork, horticulture, sheep, turkey,

bison, herb and spice, vegetables

few costing reports, more estimates of actuals, some projected estimates required

ultimately, good co-operation and participation; significant efforts to get the data

Indicative cost data versus detailed costing study 68,700 total producers represented; 12,500 trained; 10,175

certified; 9,418 validated / registered

Includes costs incurred by the delivery agent Key business processes:

Direction and ControlPlanning, Directing, Reporting, Monitoring

OperationsProducer training, awareness and supportAuditor training and auditing, program levelCertification, validation of producers, appeals, dispute resolutionRecognition: of program, of producers

Supporting Administration Information management, Finance, Legal, Administration,

Communications


Does not include: costs associated with program development, sustainability, or QMS additional costs incurred by grower additional costs incurred by distribution network


Total costs collected: $5.8 million

$0.8 million Directing and Monitoring activities 14% $4.0 million Operations activities 69% $1.0 million Administration Support activities 17%

($1.4 million of Program Development activities excluded)

Total costs per producer: $468 per producer, using a weighted average calculation


Weighted average: the cost per producer for an organization with small numbers of

producers is not given equal weighting to the cost per producer for an organization with large numbers of producers

is appropriate to use when significant variation exists in the data, and the goal is to determine average costs per unit



Calculation of a Simple Average

gross $ per organization divided by number of producers for that organization equals average $ per producer per organization; total of the average $ per producer per organization divided by total

number of organizations equals Simple Average per Producer Organization a (50 producers): $150,000/50 = $3,000

Organization b (5,000 producers): $2,000,000/5,000= $400

Organization c (7,450 producers): $3,002,350/7,450= $403

($3,000+$400+$403)/3 = $1,268 per producer

Calculation of a Weighted Average

average $ per producer times number of producers equals gross weighted $ for the organization’s producers; total of the gross weighted $ for each organization divided by total number of producers

equals Weighted Average per Producer Organization a: $3,000 x 50 = $150,000

Organization b: $400 x 5,000 = $2,000,000

Organization c: $403 x 7,450 = $3,002,350

($150,000+$2,000,000+$3,002,350)/12,500 = $ 412 per producer


% of % of Total Costs Function Costs

Directing and Monitoring 14% 100% Board of Directors 6% 42% Executive Management 8% 58% Operations 70% 100% Producer Training and Support 23% 31% Certification of Producers 22% 31% Registration 19% 28% Official Recognition 5% 8% Administration / Support 17% 100% Finance 1% 9% Legal 1% 8% Information Technology 3% 15% General Administration 4% 27% Communications 5% 28% Human Resources 2% 13%


COST ELEMENTS PERSONNEL Number of Full Time Equivalent (FTE) 3.1 Salaries $176,587 Benefits (percentage of salary) 14,880 Per Diems (contracted resources) 33,825 Third party 61,227 TOTAL (62% of the Total Dollars) 286,519 MATERIALS AND SUPPLIES Office Supplies 22,937 Printing 26,663 Displays 826 Postage/Courier 1,316 TOTAL (11% of the Total Dollars) 51,743 TRAVEL Transportation 79,787 Meals/Accommodations 28,208 Telephone 1,660 TOTAL (24% of the Total Dollars) 109,655 FACILITIES Utilities 793 Equipment (computers, vehicles, office equipment) 2,900 Building costs/workspace (depreciation, rent) 10,483 Repairs and Maintenance 0 Insurance 365 TOTAL (3% of the Total Dollars) 14,542

TOTAL DOLLARS $462,463

COSTS PER PRODUCER (WEIGHTED AVERAGE), NOT INCLUDING PROGRAM DEVELOPMENT * $468


Make-up of the costs personnel 62% materials and supplies 11% travel 24% facilities 3%

92% actual and 8% projected Differences - by region, within a commodity group:

variation in activities exists completeness of the data economies

COSTS OF DELIVERYCOSTS OF DELIVERY Range in costs:

per producer $0 to $400: 5 national (co-ordinating role); 5 provincial/regional $401 to $1,000: 2 national (co-ordinating role); 3 provincial/regional $1,001 to $3,600: 6 provincial / regional

per function: Directing and Monitoring: $60 to $70 Administrative Support: $70 to $80 Operations-Training and Support/Awareness Building: $30 to $50 Operations-Training and Support/Skill Development: $50 to $400 Operations-Certification: $40 to $50 Operations-Validation of Production Unit: $200 to $500 Operations-Registration: $200 to $1,300 Operations-Official Recognition: $5 to $120


Cost drivers: variations in delivery activities flexibility - market driven and voluntary economies of scale, number of producers economies of scope, integration with other programming considerable fixed costs (versus variable); capacity planning whether producer produces multiple commodities uptake by producers technology - scheduling, producer database on-farm audit activities costly customer requirements need for compliance-level audit

OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY

Key differentiating attributes: single or multiple commodity national or provincial or regional customer recognized or not officially (CFIA) recognized or not certification versus accreditation multi-commodity audits (contracted through NPOs) versus

pooled audits (contracted through a qualified 3rd party) in-house versus third-party

OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY Potential Delivery Models:

Single Commodity (National delivery) Single Commodity (Provincial or Regional delivery) Officially Recognized Single Commodity (Provincial or Regional) Officially Recognized and Accredited Single Commodity

(Provincial or Regional delivery) Multi-Commodity (Provincial or Regional delivery) Officially Recognized Multi-Commodity (Provincial or Regional) Officially Recognized Multi-Commodity Pooled Audit Officially Recognized and Accredited Multi-Commodity

(Provincial or Regional delivery) Officially Recognized National Certification Body (Provincial or

Regional delivery) Customer Recognized Programs (Provincial/Outsource)


How evaluate? Technical issues Business issues


Possible Evaluation Criteria, technical issues whether certification to the specified performance standard is

possible regional / provincial differences and requirements commodity differences and requirements contributing to remaining competitive; acceptance by food

industry / customers; issues of commercial acceptance, i.e. branding

applicability to other related initiatives, i.e traceability, environment, stewardship, animal welfare – ability to deliver greater than food safety

OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY Possible Evaluation Criteria, business issues

cost independence, objectivity expertise available affordability; ability to pay; availability of resources application / use of technology overlap / economies with other initiatives / management systems whether effective linkages / communications in place

with producers with other commodity organizations

staged implementation: complexity and scale feasibility: capacity / availability / practicality timeliness: availability / proximity / location public good versus commercial benefit (not-for-profit vs profit)

OPTIONS FOR DELIVERY OPTIONS FOR DELIVERY The future?

no one model for all national or regional co-ordination where possible national training design and materials provincial or regional delivery of training, certification,

maintenance or follow-up partial audits evolution of verification requirements ultimately, objective, independent full audit service investment in information management technology cost-effective resource planning limited multi-commodity co-operation


PROVIDER SERVICE

AIB

International

Beef

Improvement Ontario *

(BIO)

Collis

Consulting Inc.

FB

Andersen and

Associates Inc.

Gestation Qualiterra

Inc.

Guelph Food Techn-ology

Centre (GFTC)

North

American Food

Safety Associates (NAFSA)*

Prisme

Quality

Manage-ment

Institute (QMI)

SGS

Canada Inc.

Safefood

Consulting Inc.

Silliker

Inc.

Steritech

Group Inc.**

Program Development Generic Model Development

Producer Manuals

Auditor Training Materials

Program Management Services

Program Implementation Producer Awareness Session

Producer Training Sessions

Audit Training

Pre-audit Services

On-Farm Audits

Certification Schemes

NEXT STEPSNEXT STEPS

Follow-up telephone meetings with participants feedback on, and clarification of, individual report discussions on potential delivery models and possible evaluation

criteria ideas / direction on possible subsequent phase of project

Possible Phase 2: further evaluation of options for delivery

canadian on-farm food safety delivery option identification and evaluation on behalf of the canadian...

Documents

average costs

organization total

efficient delivery of

projected cost of delivery

total producers

qmsadditional costs

groweradditional costs

costs of deliverysources