Joint UNCTAD / WTO Informal Information Session on Private Standards

Presentation Transcript

Experiences in South East Asia

By

Christie F. Robert

qa plus asia-pacific sdn. bhd

WTO Headquarters, Geneva

25th June 2007

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

“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 world’s largest import market, followed by USA, together accounting for 70% of import demand

Source: FAO Corporate Document Repository

www.fao.org

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

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

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

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

Growth of Private sector standards

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

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.

FFV-intra regional trade FFV Exports

Malaysia’s share in EU imports of FFV is small while Thailand’s and Vietnam’s share of exports to EU is much bigger. Exports from Vietnam largely comprises fresh vegetables

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%

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

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

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

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

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’

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