information-sharing workshop for geneva-based delegates geneva, 29 february 2008 presented by:...
TRANSCRIPT
Information-sharing workshop for Geneva-based delegatesGeneva, 29 February 2008Presented by: Ulrich HOFFMANN, UNCTAD secretariat
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Role of the New Breed of Standard Packages (combining product-
characteristics and process standards)
Quality-assurance role – facilitating trade
Instruments to encourage shift
towards sustainable production/
consumption methods
Competitiveness instruments
Private voluntary standards as chain-governance tools
Role of StandardsRole of Standards
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Multidimensionality of RequirementsMultidimensionality of Requirements
Pillars of Environmental, Health and Food Safety Requirements
Food Safety Plant/Animal Health
ProductQuality
Environment Social
MRLsHeavy metal limitsFood additivesHygiene requirementsTraceabilityHACCP
Quarantine requirementsPest risk assessmentRestrictions on feedVaccinationAnimal welfare standards
Product compositionProduct cleanlinessGradingLabeling requirementsControl of nutritional claimsISO 9002
Control of water and env contaminationProtection of biodiversityProtection of endangered speciesRecyclingOrganic prod requirements
Ethnic standardsFair trade standards
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0
50
100
150
200
250
Co
ntr
ol P
oin
ts
Holistic view of GLOBALGAP Standard:Food Safety, Environment and Social Control
Points
Recom.
Minor
Major
Multidimensionality of Requirements cont’dMultidimensionality of Requirements cont’d
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Concerns of Exporting Developing Countries 5
• Emerging environmental, health and food-safety (EHFS) requirements will be applied in a discriminatory manner against DgCs.
• DgCs lack the administrative, infrastructural, technical, and managerial capacities to comply with new and more stringent requirements
resulting from a transition from conventional to high-precision production methods.
• Adjustment and compliance costs will undermine the comparative advantage of DgCs.
• Institutional weaknesses and compliance costs will further marginalize weaker economic players, including smaller countries, enterprises and farmers.
666Globalization and Private Voluntary Standards (PVS): What is Cause, What Consequence?
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• Global sourcing of food – food-safety concerns, lack of enforcement
• Globalization (through efficient factor allocation) facilitates and requires transition to high-precision production methods in agriculture
• Globalization requires strategic positioning (products, capacity, quality-management systems)
• Private Voluntary Standards (PVS) are addressing these issues – make global supply chains manageable and verifiable as well as encourage transfer of new technology + management methods
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Changes
Supermarkets by-pass spot markets
Competition and differentiation strategies of
supermarkets
High share of supermarkets in total retail
Need to control risks and reduce related costs
Restructuring of Global Value Chains and the Role of Restructuring of Global Value Chains and the Role of PVSPVS
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Implications of Changes in Global Supply ChainsImplications of Changes in Global Supply Chains • Need to develop strong and stable ties between producers, exporters
and supermarkets
• Risk of marginalization of small farmers (unless well managed groups)
• Key role of exporters in “organizing” producers (out-grower schemes)
• Reinforcing trend towards “own” production of exporters on large, commercial estates
• May increase wage employment on agro-industrial estates
• Enhances competition among developing countries: supply-chain changes and PVS are reinforcing already existing capacity weaknesses (infrastructure, institutions, skills, quality management, finance etc.) A key issue from a development perspective is: what will be the net effect on the welfare of rural families and what will be the implications for pro-poor agricultural development strategies.
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Costs and Benefits of PVSCosts and Benefits of PVS
Benefits Costs Benefits Costs
Market accessHigher pricesBetter managementSavings on inputsOccupational safetyStable profits
High quality management, testing and certification (recurrent) costsHigh fixed capital investment costs
Developmental (national food safety, tax revenues)Environmental (water, soil etc.)Social (employment, skills)
Investment in physical infra-structureInvestment in quality-assurance infra-structure (accredited labs etc.)Extension services
Enterprise Level Macro-economic Level
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Compliance Costs of PVS for Small ProducersCompliance Costs of PVS for Small Producers
GLOBALGAP certification: average cost of compliance as a percentage of the annual profit margin for small-scale growers in Zambia
HectaresSupport from donor-subsidised
Produce Marketing Organisation (PMO)
No support from PMO
Capital costs Recurrent costs
Capital costs Recurrent costs
2.0 – 6.0 2-5 0.4-1 8-23 3-5
1.0 – 1.8 5-8 1-2 26-41 9-14
0.3 – 0.8 12-33 3-8 58-160 19-53
Source: Graffham and Vorley (2005)
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PVS: Catalyst or Barrier (1)PVS: Catalyst or Barrier (1)1111
PVS as Barrier
...or...
PVS as Catalyst
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PVS: Catalyst or Barrier (2)PVS: Catalyst or Barrier (2)1212
PVS as Barrier ... or...
– Non-transparent protective tool– Information unclear– High, unattainable– High costs of compliance– Marginalize small countries,
traders and farmers– Contraction of Trade
PVS as Catalyst
– Harmonized procedures & rules build confidence
– Spur investment, modernization & public/private collaboration
– Stimulate improved practices & stronger technical support
– Foster new forms of competitive advantage
– Maintain/expand income opportunities
Source: Jaffee S., World Bank, 2004
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Exposure of Developing Countries to PVSExposure of Developing Countries to PVS1313
Share of FFV exports from / to in %
EU-15 Asia US and Canada
Latin America
Africa
Asia (Malaysia, Thailand, Vietnam)
10 70 10
Latin America (Brazil, Argentina, Costa Rica)
48 30 20
Africa (other than South Africa)
75 2 2
Example of Fresh Fruit and Vegetable Exports
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Current Markets and Their Requirements
Whole Chain Assurance
PRE-
FARM
GATE
POST
FARM
GATE
Growers
Farmers
Food Packing and Processing
Retail
Stores Consumers
REQUIREMENTS
Key componentsoPre-Farm and Post Farm Gate Standards oTraceabilityo Risk Assessment o Residue Monitoring
EurepGAPTesco’s Nature’s ChoiceSQF 1000
HACCP
BRC
SQF 2000
In fact, GLOBALGAP effectively enforces mandatory requirements of EU countries
SQF 3000
Currently some 400 private food schemes
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Coping with an Inflation of “Sustainability” Standards Coping with an Inflation of “Sustainability” Standards
Multiple certification ??
?
NGO-set standards
Private sectors standards
Harmonization & equivalence rare
despite WTO
Mandatory requirements, e.g. on
organic agriculture
• How can one effectively deal with an array of not harmonized and equivalent standards?
For example:- Fairtrade- Ethical Trade- Organic- Bird-friendly coffee- Sustainably managed and harvested wood
Price premia??
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National GAP Programmes16
socially acceptable
GAP
economically viableenvironmentally
sustainable
socially acceptable
ensuring food safety & quality
GAP=‘practices that need to be followed to ensure environmental, economic and social sustainability
for on-farm production and post-production processes and result in
safe and quality food and non-food agricultural products’ (FAO 2003)
A way to manage your system better
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What is a GAP scheme? 17
1. For decades: extension & research guidelines on “good practices”
2. Late 1990s : “GAP” codes & standards
– farm better (=SUSTAINABLE & SAFE for workers/consumers)– demonstrate that you farm better (=records and/or certification)
= GAP is an opportunity to integrate technical advice to farmers -- to include good agronomy + food safety and quality + business skills
= GAP – to be seen as a building block in the national food chain approach to food safety
= Different types of GAP standards for different objectives and conditions
Source: Poisot, A.S., FAO, 2007
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National GAP Programmes 18
Stakeholders coordinationand mechanisms
Market Demand& Sector Support
Infrastructure & capacity building
ReliableInspection/Certif/ Lab
Standards &documentation
Concertedstrategy and policy
GAP PROGRAMME
Source: Poisot, A.S., FAO, 2007
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Clarity on Thrust and Focus of National GAP 19
STRATEGY DEPENDS ON
• OBJECTIVE : where do we want to go?• STRATEGY : how will we get there?• POTENTIAL: what will we realistically gain by doing it?• ...AND SHOULD BE:= COHERENT= COST EFFECTIVE= REALISTIC (based on existing capacity)
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Clarify Target Markets and National Capacity 20
• Target your market and other objectives first, then see what you need to comply with
• Step 1: CRITICAL ANALYSIS of – country strengths– diagnostic of current practices – comparison with legal and commercial requirements of current and
target markets – importance of sub-sector for development and poverty
• Government cannot make the industry competitive. The industry can = if strong and interested, take the lead
• Market recognition of government-run or supported GAP schemes can be low, however advantages of governmentally supported GAPs
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Contextualizing National GAP Schemes 21
• When contextualizing national GAP development, it is important not to limit it to the commercial, micro-economic context of
enabling producers to comply with downstream market standards. • Rather, national GAPs should address both the commercial context
and the non-commercial sustainability aspects, including benefits for worker health, national food safety, the environment and national economic development, including transfer of technology and
innovative management methods. • This is the background for using public (and development assistance) resources to support national GAP implementation.
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Role of Governments in National GAP Programmes 2222
Supportive and Facilitating Role
Policy Analysis
Facilitating Investment
Devising flanking/support
policies
Assuring policy
coherence
Facilitating stakeholder
dialogue
- Facilitating conceptual clarity on enhancing developmental contribution- Addressing smallholder concerns- Optimizing costs & benefits
- in physical infrastructure- in SMTQ systems & institutions- directing donor funding accordingly
- on extension services- on financial support- addressing problems with registration of CPPs
- among government agencies dealing with various aspects of GAP- towards donors
- facilitating and engaging in stakeholder dialogue on development & implementation of GAP
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Transparency in PVS Setting and Implementation 23
Assuring Transparency and Equivalence (WTO principles)• Are PVS (sufficiently) risk based?• Contain requirements that are proportional (and related) to the risk • Are PVS transparently implemented? • Allow real equivalence or rather require 'sameness'
Most recent measures of GLOBALGAP to facilitate inclusion of small producers• Creation of an African Observer for GLOBALGAP sectoral committees• Formation of a Smallholder Taskforce to work with the African Observer aimed at elaborating concrete proposals for smallholder-friendly changes in the GLOBALGAP standard (control points) and General Regulations (certification procedures) -- may also assist in making certification easier for small-scale growers
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UNCTAD Consultative Task Force (CTF) on EnvironmentalRequirements and Market Access for Developing Countries
1. Three recent books synthesizing the challenges and opportunities of pro-actively adjusting to PVS of the following country groups:Africa: Ghana, Ethiopia, Kenya, Uganda, Zambia Asia: Malaysia, Thailand, Viet NamLatin America: Argentina, Brazil, Costa Rica
2. Active observer role in WTO discussions on PVS – SPS Committee:- two recent joint UNCTAD-WTO information sessions on private
standards on the sidelines of SPS Committee sessions in October 2006 and July 2007
UNCTAD Activities on PVS (1)
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Website of UNCTAD’s Consultative Task Force
www.unctad.org/trade_env
UNCTAD Activities on PVS (2)
3. Two regional stakeholder workshops, organized by FAO and UNCTAD on compliance with PVS and conceptual issues of national GAP programmes (one for South America in 2006, one for East and Southern Africa in 2007).
4. Planned advisory and technical assistance activities (jointly with FAO, and, where appropriate with FoodPlus) on conceptual issues of
developing national GAP programmes to pro-actively adjust to PVS in export and national markets.