"As developing countries open their economies further to trade, their food industries are striving to raise safety and quality standards in order to compete in new markets. Such is the case with the Colombian poultry industry... Critical questions face the Colombian poultry industry: Is it ready to compete with foreign poultry producers on price, quality, and safety? Can industry efforts to produce better quality products assure an increased share of domestic and regional markets? This brief reviews the private initiatives undertaken by the Colombian poultry industry to assure food safety in light of these questions." from TextFood safety ,food security ,Public health ,

Gomez, Miguel I.

Rodriguez, Daisy

Sierra, Diego M.

English

Research Papers in Economics

FOR FOOD,AGRICULTURE,
AND THE ENVIRONMENT
FOCUS 10  •  BRIEF 14 OF 17  •  SEPTEMBER 2003
FOOD SAFETY IN FOOD SECURITY
AND FOODTRADE
Case Study:The Poultry Industry in Colombia
MIGUEL I. GÓMEZ,D IEGO M. SIERRA,AND DAISY RODRIGUEZ
A
s developing countries open their economies further to
trade, their food industries are striving to raise safety and
quality standards in order to compete in new markets. Such is
the case with the Colombian poultry industry,which is con-
fronting challenges arising from World Trade Organization
(WTO) efforts to reduce trade barriers and from regional free
trade agreements such as the Andean Community of Nations
(ACN) and the Free Trade Area of the Americas.Critical ques-
tions face the Colombian poultry industry:Is it ready to com-
pete with foreign poultry producers on price,quality,and safety?
Can industry efforts to produce better quality products assure
an increased share of domestic and regional markets?  This
brief reviews the private initiatives undertaken by the
Colombian poultry industry to assure food safety in light of
these questions.
THE POULTRY INDUSTRY
Poultry constitutes one of the most dynamic food industries in
Colombia. In the last 20 years, domestic production has
increased nearly fourfold, while chicken and egg consumption
per capita has tripled.Today, poultry is the second largest
source of protein, accounting for 40 percent of total meat con-
sumption and 10.5 percent of agricultural gross domestic
product.
Trade liberalization policies and participation in regional
free trade agreements have substantially affected the industry.
Input supply sources have expanded and input prices have fall-
en.While inputs may be more readily available under free
trade, the market for poultry products has become more com-
petitive.At the same time, demand in developing countries is
expanding rapidly. For Colombian producers to take advantage
of new markets, however, their prices must be competitive.The
industry is responding with a strategy to reduce costs that
includes widespread vertical integration and rapid consolida-
tion. Significant cost reductions have been achieved in the past
10 years, yet import prices of various poultry products are still
below domestic prices and the industry is striving for further
efficiency. Managers believe that improved efficiency can open
new markets in neighboring ACN countries such as Venezuela
and Ecuador.
The industry recognizes that while cost-reduction initia-
tives are necessary to compete, product quality and safety are
also critical.The industry has two compelling reasons to
improve quality and safety. First, food safety and animal health
regulations have often been used against Colombia and other
Andean countries to restrict their poultry trade.As Colombian
standards improve and rules are defined for the trade of fresh
products under the WTO’s Sanitary and Phytosanitary
Standards (SPS) agreement (see Brief 5), it will become easier
to meet health and safety standards, thus facilitating trade.
Second, as consumers’ awareness of food safety increases, the
market is likely to reward producers who meet safety stan-
dards and punish those who do not.These reasons, along with
new regulations, have motivated the industry to launch a quali-
ty assurance program (QAP).
FOOD SAFETY REGULATION IN COLOMBIA
In 1997, the government approved a food safety regulation to
be enforced by the newly established National Institute for
Food and Drug Surveillance (INVIMA).This rule substantially
increases standards for fresh products and shifts the emphasis
from inspection of final product to process control.The rule
requires companies to document compliance with Good
Manufacturing Practices (GMPs). It also embraces the minimum
standards defined by the Codex Alimentarius Commission. In
2002, the government approved a regulation that recommend-
ed adoption of Hazard Analysis Critical Control Point
(HACCP), established parameters for certification of HACCP
plans, and defined rules for quality assurance labels.
THE QUALITY ASSURANCE PROGRAM AND 
ITS IMPACT
Public regulation sets the context for private efforts. In 1998,
the National Federation of Poultry Producers (FENAVI)
responded to the combined challenges of increased competi-
tion, stricter regulation, and trade liberalization by launching an
industry-wide QAP. Financial support comes from a FENAVI-
administered fund, into which each producer pays according to
its volume of production.The program, which brought together
all 50 Colombian poultry processing companies, initially
emphasized education about quality assurance systems and
process-control approaches to food safety. In the next stage,
20 processing plants were selected to take part in a HACCP
pilot plan. Each poultry processor formed a quality assurance
group responsible for implementation, and FENAVI visited each
plant to provide on-site training and assess the companies’
GMP/HACCP plans.These assessments rated sanitary profiles,
cleanliness and disinfection, training, equipment and instrument
calibration, and HACCP plan implementation.
In 2000, FENAVI started the second phase of the QAP,
extending participation to 32 companies.To develop a baseline
for measuring program performance, these companies were
divided into three levels (see figure). In 2000, Level 1 included
9 companies that had fully implemented GMPs and developed
their HACCP plan.They were believed to be ready for certifi-
cation within six months. Level 2 consisted of 14 companies
that had implemented 85–99 percent of their GMPs, werecompleting process modification investments, and were devel-
oping their HACCP plan. Finally, Level 3 included 9 companies
with the lowest levels of GMP/HACCP implementation.
FENAVI estimated that companies in levels 2 and 3 could
achieve certification in 12 to 18 months. Meanwhile, a system
to monitor progress was put in place, which included an annual
visit to each company to rate its QAP.
By the end of 2002, the QAP had achieved the following goals:
•  Significant progress in the implementation of GMP/HACCP:26
companies had operating HACCP plans and had achieved at
least 85 percent compliance with the recommended sanitary
practices.
•  Seven companies obtained HACCP certification,and INVIMA
expects to certify another nine companies in 2003.
•  Annual costs of the QAP were estimated at about 1 percent
of the annual sales of the participating companies.
•  Benefits of the program include increased durability of prod-
ucts in storage;adoption of new technologies that help lower
production costs;fewer returns from buyers;and increased
control of production processes.
REMAINING CHALLENGES
The QAP achievements are significant, yet several problems
remain. First, in Colombia and other Andean countries, a large
number of small poultry establishments operating in the infor-
mal economy are not regulated by the government.These
companies have lower production costs and much lower food
safety standards than their legally established counterparts.
Therefore, one of the most important questions facing the
industry is whether HACCP should be mandatory, so that all
poultry-processing establishments are inspected and competing
under similar conditions.While such a mandate would require
all companies to invest in food safety, it might also restructure
the industry and reduce opportunities in the informal sector.
A second issue is the lack of market incentives for invest-
ments in food safety. While the QAP raises the industry’s
already high costs, most industry executives agree that con-
sumers will not pay higher prices for safety.They concede,
however, that consumers may increase purchases from compa-
nies with higher standards.
To increase the demand for safe, high-quality poultry, the
industry needs an aggressive strategy to educate consumers
about the benefits of safer and higher quality products, but it is
difficult to launch an advertising campaign when not all of the
companies participate in the QAP. Should the QAP be made
mandatory and FENAVI empowered to conduct an advertising
campaign emphasizing the safety and quality of poultry products?
A third problem is top management’s moderate level of
commitment to the QAP. In the absence of price premiums
and demonstrated demand for food safety, quality assurance is
not a priority for many companies. Consequently, many have
been slow to implement their QAPs.To secure stronger man-
agement commitment, FENAVI must document the program’s
benefits, such as more efficient production, lower volume of
returns, and increased control of production processes.
Economic studies should be conducted to show how quality
assurance can increase market share.
CONCLUSIONS
This case study shows how an industry in a developing country
deals with the increasingly pressing issue of food safety in the
context of domestic and regional markets. In the case of the
Colombian poultry industry, the QAP was possible because the
industry took the initiative privately and funded it cooperative-
ly through FENAVI.Although this three-year-old program has
produced substantial benefits, its ultimate success will depend
on answers to these essential questions:
•  Will the industry succeed in creating marketing incentives for
food safety investment by educating consumers about food
safety?
•  Will the industry agree to make participation in the quality
assurance program mandatory?
• Will industry executives view quality assurance as a long-run
strategy to gain market share in domestic and regional 
markets?  ■
For futher reading see FENAVI’s website
<http://www.fenavi.org>.
Miguel I. Gomez (mig7@cornell.edu) is a research associate in the Food Industry Management Program in the Department of Applied Economics and
Management, Cornell University, USA; Diego M. Sierra (dsierra@fenavi.org) is executive president of the Federación Nacional de Avicultores (FENAVI) in
Colombia; and Daisy Rodriguez (drodriguez@fenavi.org) is director of the National Poultry Program in FENAVI.
International Food Policy Research Institute
2033 K Street, N.W. •  Washington, D.C. 20006-1002  •  U.S.A.
Phone: +1-202-862-5600  •  Fax: +1-202-467-4439  •  Email: ifpri@cgiar.org
www.ifpri.org 
Companies complying with the 
Quality Assurance Program, 2000
Source: FENAVI.
Note: Level 1 represents the highest degree of compliance.
Level 2
44%
Level 3
28%
Level 1
28%

Case study the poultry industry in Colombia

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Case study the poultry industry in Colombia

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