11th May 2009

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Implications of Standards Compliance for ACP Horticultural Producers and

Exporters

COLEACP Pesticides Initiative Programme (PIP)

• Food business operators face complex public food safety regulations & increasing reputational risk

• PVS codify procedures needed to ensure and demonstrate compliance with public standards

• Third party certification to enforce PVS compliance & transfer some of the burden & cost up supply chain

• Creates major challenges for ACP exporters, particularly for supply chains involving SSGs

The Driver

PIP Survey

• Assess compliance status of horticultural export companies following PIP support

• Identify emerging market access problems

• Study the impact of PVS on exporters & their procurement practices

• 102 beneficiary export companies

• 10 countries: Kenya, Ghana, Zambia, Uganda, Mali, Madagascar, Cote d’Ivoire, Senegal, Benin, Burkina

Nov 07- March 08

1. Predominant in the Anglophone countries Uganda, Kenya, Ghana, Zambia exporting to supermarkets in the UK, Germany, Netherlands & Switzerland

2. Predominant in the Francophone countries Senegal, Madagascar, Mali, Burkina, Cote d’Ivoire exporting mainly to “other buyers” (wholesale, catering, etc.)

3. Plantation crops - mixed

Distinct value chains

•“Anglophone” chain subject to more pressure, for longer, & experiencing more problems (esp. Kenya)

•Dramatic expansion in demand for GlobalGAP

•More pronounced in context of more direct exporter-retailer links (& N. European supermarkets)

•Certification addressed piecemeal to spread costs

•Company certification before SSG certification

Distinct differences between value chains

•Technically possible

•In Kenya from 2005, very recent elsewhere

•Expensive – addressed piecemeal, group by group

•Despite substantial donor support, only 16% certified by March 2008

•Under current PVS form & modus operandi:• Requires external support

• Not cost effective long-term (high recurrent costs)

Smallholder Certification among respondent companies

•SSGs provided bulk of exports for many companies

•Despite PVS difficulties and small numbers certified, only in Kenya & Ghana was there a decrease in SSG sourcing

• Possible influence of donor projects

• Stated retailer policies not always enforced

• Strong commercial and technical reasons

• Substituting volumes from SSGs difficult in short-term

SSGs in the supply chain

SSGs in the supply chain

Future trends unclear, but Kenya scenario could be repeated if demands for PVS become more widespread and more tightly enforced

•Recognition that:• buyer requirements create obstacles &

opportunities• many problematic elements a consequence of

operating inflexible EU-centric PVS in ACP production environment

•Technical assistance

•Improved dialogue with EU buyers – particularly with expansion into new domains (environment, SA)

•Better opportunities for ACP engagement, as well as a greater capacity to engage

Where we go from here