The Pesticides Initiative Program (PIP) was set up by the EU at the request of ACP (African Pacific and Caribbean) states for the purpose of enabling ACP companies to comply with European food safety and traceability requirements and to consolidate the position of small-scale producers in the ACP horticultural export sector.
According to the November PIP magazine, private voluntary standards (PVS) have been described as "the next big thing" in determining trade flows. In a recent interview with the Financial Times (September 22, 2007), Pascal Lamy, Head of the WTO, noted that the proliferation of standards is likely to cause a clash with developing countries, who fear new barriers to their exports. Lamy said "Developing countries are certainly beginning to have a real problem, and the question of standards is becoming a real issue". This in focus article summarises what PIP has to say on current private voluntary standards and emerging carbon standards.
Source: PIP [1] Magazine, November 2007
Standard Bearers in Kenya
Private voluntary standards (PVS) have a very important role in the fresh fruit and vegetable export trade from sub-Saharan Africa. Traditionally, export horticulture has been produced by small-scale growers, and has proved a powerful force for reducing rural poverty and developing rural economies - benefiting over 1 million livelihoods in Africa. Yet, standards by their nature play a role in directing and focusing the trade and will affect the distribution of costs and benefits among industry participants. In sub-Saharan Africa concerns exist that EU retailer requirement for compliance with PVS is causing market exclusion of sub-Saharan Africa that have traditionally supplied produce for export to the United Kingdom, mostly to supermarkets. Concerns over poverty implications of this are foremost. A joint IIED/NRI/DFID project has been analyzing the impact of standards and discerning potential future pathways that alleviate poverty without limiting business opportunities.
Using interviews with exporters and small-scale growers, we analyzed the full range of costs and benefits of participation in export horticulture for almost 2,000 small-scale growers, with a focus on quantifying the apparently high costs for them of compliance with EurepGAP. We found that since 2003, the EurepGAP private retailer standard has been the main driver for change in producer and exporter practices in Kenyan horticulture. Many Kenyan exporters have significantly reduced their involvement with small-scale growers since EurepGAP introduction in mid-2003 - we estimate as many as 60 % of small-scale growers from 2003 are no longer supplying produce. There is a range of reasons for this fall, but our survey indicates the persistent theme of high financial costs of compliance. Initial costs per farm are on average £1,145 (about 1,640 euros), with 36 % invested by the farmer, 44 % by exporters, and 20 % by donors. Indeed, financial support from donors and the export companies has been critical to small-scale growers. Recurrent costs associated with compliance are on average £175 (about 250 euros) per annum, with 14 % paid by the growers themselves and the remainder by exporters. Crucially, the maintenance costs borne by the growers are very high relative to average smallholder returns - an average of 21 % of turnover.
Our research show that if small-scale growers are to continue to benefit from export horticulture to UK markets it will be necessary to ensure a more appropriate balance between level of control and costs of compliance. Currently, most of the compliance controls - and their associated costs - are legitimate and justified in order to ensure consumer safety and product quality. Yet, there is a risk of ‘gold-plating' PVS with extra requirements - and associated extra costs - that go beyond the minima required. The considerable benefits of export horticulture include injecting cash into rural areas, providing significant non-financial benefits to small-scale growers (such as technology transfer and skills in farm management), and increasing skilled labour supply. Yet compliance costs are very high and our research indicates that costs have risen beyond the reach of many small-scale growers and some of the smaller export companies. We find that in order to stimulate small-scale growers inclusion in these lucrative supply chains, we need to promote marketsavvy collaboration among private sector, donors, and producers, as well as foster external service providers. There is a need to build local-level capacity in cooperative structures and to find ways of ensuring standards-setters are aware of the legitimate concerns of large numbers of their suppliers. Research is continuing, and is regularly added to our website www.agrifoodstandards.net [2].
Food Miles and African trade with the United Kingdom
In the United Kingdom (UK) in 2007 the term ‘food miles' is well known and widely used - with an estimated 40 per cent of UK adults interested in having more information available to them on how far food has travelled, and an alleged one-fifth using country of origin labelling to make buying decisions. Two UK supermarkets have started labelling air-freighted products and there is concern that UK consumers will view this negatively and this will affect demand for African produce. A study on the ‘carbon footprint' issue has been conducted by the International Institute for Environment and Development (IIED) on behalf of Coleacp/PIP.
Early indications are that it has not, as ethical concerns do not necessarily translate into actual purchase decisions. However ‘the environment' has become a competitive point of difference on the United Kingdom supermarket shelves, with the risk of ‘green' marketing gestures that do not consider the bigger picture.
Putting airfreight in perspective: the airfreight emissions generated from trade of fresh fruit and vegetables (FFV) to the UK from Africa account for a maximum of 0.1 % of total UK emissions. In addition there are several questions about allocation of aviation emissions. First, the majority (60-80 %) of flown fresh produce from Africa is held in the belly-hold of passenger flights. Here, the allocation of emissions between passengers and freight is not clear; current calculations of airfreight emissions usually assume all of a plane's emissions are divided proportionally between the cargo only. Second Kenya is in ‘ecological credit' compared with the UK; the average Kenyan emits 0.3 tonnes of CO2 per year; the average UK citizen emits over 9 tonnes per year. Kenya should therefore be offered an opportunity to invest their carbon credit as they see fit - either in industrialisation, selling as an offset, or in air-freighting export horticulture. This trade supports over one million African livelihoods and has a declared value of £200 million (about 286 600 000 euros). Coleacp/PIP and IIED would like to see these factors recognised in any ‘food miles' labelling of produce from developing countries with the concept of ‘fair miles'.
The debate outside of the consumer eye is turning to carbon labelling where the entire carbon footprint of a product, from seed to plate, will be incorporated in a carbon standard - jointly developed by the British Standards Institute and the Carbon Trust. Food miles will become part of this footprint. The methods used to calculate the footprint are currently not defined, but it is clear there will be winners and losers depending on the methodology chosen to benchmark this standard. There will also be costs in complying with any emerging standard. It is important for African producers and governments to engage in the debate with standards setters and suppliers at an early stage to ensure that genuine environmental benefits are rewarded, and environmental advantages of African producers are recognised. Equally the social and economic benefits of fresh fruit and vegetables trade with Africa should not be overshadowed by a new carbon standard. Rather they should be included in it by supporting a ‘development test' to brand developing country products sold in the UK.
The full PIP magazine is available here [3]