Joint UNCTAD WTO Informal Information Session on Private Standards

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Joint UNCTAD / WTO Informal Information Session
on Private Standards
Experiences in South East Asia
By Christie F. Robert qa plus asia-pacific sdn.
bhd

• WTO Headquarters, Geneva
• 25th June 2007

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Scope of presentation

• To provide an overview of the experience in South
  East Asia on adjustment to private standards in
  key export markets and the National GAP programs
  based on the UNCTAD monograph synthesizing the
  country case studies on Malaysia, Thailand and
  Vietnam

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Major Tropical Fruits global production
trade

• World production and trade of major fresh
  tropical fruit (mango, pineapples, papaya and
  avocado) is expected to expand over the next
  decade
• Expected to increase from 46.5 million tonnes
  (1998-2000 average) to 62 million tonnes by 2010
• Developing countries should continue to account
  for 98 of global production, developed countries
  2
• Asia and Pacific region should account for more
  than 56
• Global imports are forecast to reach 4.3 million
  tonnes by 2010 with 87 or 3.8 million tonnes
  destined for developed country markets. EC is
  expected to remain worlds largest import market,
  followed by USA, together accounting for 70 of
  import demand

Source FAO Corporate Document Repository
www.fao.org
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Changing structure of global FFV trade
Consumer
Demographic growth
Changing lifestyle/ Shopping habits
Increased income /educated consumers
Market
Concentration Of suppliers and retailers
Developing high value /added value and new
products
Stricter quality Safety market requirements
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Global supermarket sector

• Supermarkets now dominate food sales and are
  rapidly expanding their global presence
• Increased presence in South East Asia
• International consolidation and aggressive
  pricing strategies
• Increased market power on global power chains
• Global sourcing companies-more exacting demands
  on quality

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Fundamental shift in the role of standards today

• Standards are strategic tools for
• Market penetration
• Management system coordination
• Quality and Safety assurance
• Addressing Social and Environmental issues
• Product niche definition
• Basis for continuous improvement

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Standards and agri-food trade

• Standards are becoming mandatory requirements
  for market access
• Has lead to the development of a plethora of
  standards
• Retailer Standards
• Private Label Standards
• National Standards
• International Standards
• Have to be addressed by the producers for whom
  they are becoming increasingly essential for
  business

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Growth of Private sector standards
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Private sector standard National GAP Schemes

• Increasing number of private sector standards
• Compliance is not mandatory
• However retailers and suppliers often require
  certification
• Private sector standards often act as defacto
  mandatory requirements
• Has a profound influence on the development of
  National and regional schemes on GAP in ASEAN
• Malaysia, Thailand and other ASEAN countries have
  developed national GAP schemes, mainly through
  government driven initiatives
• Malaysia-SALM (National Farm Accreditation
  Scheme)
• Thailand- Q-GAP
• Vietnam GAP initiatives underway e.g. Ho Chi
  Minh City (HCMC) GAP Program, Tien Giang GAP
  Program
• Asian initiatives based on EurepGAP

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EurepGAP National GAP Schemes
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EurepGAP National GAP Schemes

• A notable omission in the Asean GAP Schemes is
  the lack of independent third party auditing
• - In Malaysia the Department of Agriculture
  provides training and advisory services and also
  conducts audit and certification.

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FFV-intra regional trade FFV Exports
Malaysias share in EU imports of FFV is small
while Thailands and Vietnams share of exports
to EU is much bigger. Exports from Vietnam
largely comprises fresh vegetables
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ASEAN FFV Exports

• Directed principally at regional markets
  particularly ASEAN, China, Japan Hong Kong,
  China, Taiwan and Republic of Korea.
• In value terms they absorb
• Fresh Fruits 81.5
• Fresh Vegetables 76.5
• EU market only takes
• Fresh Fruits 3
• Fresh vegetables 12.8

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Implications of EurepGAP and other private
sector standards which are relevant in EU on GAP
initiatives for ASEAN Fresh Fruits Vegetables

• There is increasing role for GAP certification in
  regional trade
• Government regulations to food safety becoming
  increasingly stringent e.g. Thailand, Malaysia
• Countries like Singapore (net importer of
  FFV)-arrangements with key suppliers e.g.
  Malaysia, Indonesia, Thailand)-Quality and Food
  safety standards needed
• Asean governments- Malaysia, Thailand increased
  interest in good farming practices
• Active promotion of National GAP schemes in
  Malaysia, Thailand, and Vietnam

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Common obstacles to GAP implementation

• Low levels of awareness farmers/consumers
• Poor understanding of GAP requirements
• Small farms and rural locations
• Lack of direct link with the market place- trade
  through middlemen
• Lack of incentives to implement GAP-normally does
  not result in price premiums
• Problem of land ownerships tenure-e.g.
  Thailand-discourage investments required by GAP
  schemes
• General unwillingness for supermarket chains in
  providing bridging finance

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Potential and real gains/opportunities from GAP
implementation

• Reforming agricultural production systems
• has significant socio-economic implications
• Science-based use of fertilizer and application
  of crop protection chemicals
• improved productivity cost savings
• Emphasis on worker welfare safety
• safe healthy environment, improved morale
• Assured produce thru GAP Certification
• consumer confidence and market acceptability

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Need for supportive government policies for
linking smallholders to global supply chains

• Common feature of National GAP schemes in
  Malaysia Thailand
• -it is government driven
• -Dept of Agriculture, Ministry of Agriculture
  and Agro-based
• Industries in Malaysia.
• -In Thailand the development of a national
  GAP schemes has been largely driven by the
  Government, in particular through the Ministry of
  Agriculture and Cooperatives (MOAC).
• Both in Malaysia and Thailand the Government
  supports GAP certification costs by providing
• -training free of charge to farmers
• -free chemical residue analyses
• There is little support for other private
  sector standards
• In Vietnam, development of national GAP schemes,
  government has adopted a public-private
  participatory approach
• -Donor funded projects and initiatives

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Linking smallholders to the supply chain
(Malaysia)-Role of FAMA

• Federal Agricultural Marketing Authority (FAMA)
  in Malaysia is an independent subsidiary of the
  Ministry of Agriculture Agro-based Industries
• -supervise, coordinate and regulate marketing of
  agricultural produce
• -to improve market access
• -to improve effectiveness and efficiency of
  supply chain management
• -to supervise and coordinate agricultural
  marketing activities
• -to promote market access through branding
  Malaysia Best

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Core of the adjustment strategies in Malaysia and
Thailand to comply with private sector standard
and / or National GAP Schemes

• GAP development is a national agenda
• Gradual, step-wise approach-SALM in Malaysia and
  QGAP in Thailand
• Reduced stringency on the specific control points
  and compliance criteria
• Government provides extension services
• Government support is provided to cover
  certification costs, laboratory, testing of
  pesticide residues

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Recommendations

• We suggest that regular Multi-stakeholder
  dialogues be conducted at national and regional
  levels
• - to enable exchange of experiences which
  would be useful in policy adjustments at National
  level
• - to facilitate a common benchmark in GAP
  standards to accommodate intra-regional trade
• - to harmonize local interpretations of GAP
  elements
• - to provide a forum to discuss implementation
  problems and solutions
• - to encourage realistic GAP standards and
  stepwise approach
• - to achieve consensus in ultimate target
  EurepGAP

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RecommendationsGAP Documentation

• Documentation and record-keeping continues to be
  a major obstacle.
• -Suggest development of standard formats to aid
  farmers
• -Development of generic software platform for GAP
  documentation
• -Additionally, the generic software will assist
  in the conduct of audits and simplify the process

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Recommendations

• Capacity building on WTOs SPS and
• TBT Agreements
• It is suggested that nationwide workshops to
  explain and elaborate on SPS and TBT Agreements.
• - Protocols and mechanisms are still not fully
  appreciated, especially with the trading
  community.
• -Knowledge restricted to certain government
  
• levels

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Recommendations

• Auditing
• Suggest that regional workshops be organized
  for agricultural auditors
• -consistent auditing procedures
• -correct interpretations on compliance
• -eliminate soft auditing
• -provides confidence in certification

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Recommendations

• Maximum Residue Levels (MRLs)
• A forum should be established to address
  issues on chemical residues
• - harmonize requirements on MRLs
• - sampling and testing procedures
• - regional reference laboratory

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Thank You
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