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EU private standards (GLOBALGAP, EUREPGAP) as substitutes for missing public standards: the case of fresh fruit and veg

EU private standards (GLOBALGAP, EUREPGAP) as substitutes for missing public standards: the case of fresh fruit and vegetables. Seminar Presentation: “Marketing and Trade of Fresh Fruit and Vegetables “ Tatjana Schmolke May, 30th, 2008. Outline. EU Public legislations for FFV Marketing

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EU private standards (GLOBALGAP, EUREPGAP) as substitutes for missing public standards: the case of fresh fruit and veg

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  1. EU private standards(GLOBALGAP, EUREPGAP) as substitutes for missing public standards:the case of fresh fruit and vegetables Seminar Presentation: “Marketing and Trade of Fresh Fruit and Vegetables“ Tatjana Schmolke May, 30th, 2008

  2. Outline • EU Public legislations for FFV Marketing • Private Standards for FFV • GLOBALGAP • Benefits and challenges of Private Standards • Comparison of Public and Private Standards • Conclusion

  3. EU legislations for FFV Marketing • Codex Alimentarius and UN/ECE Standards: • Consumers’ health • Fair trade practices • Promotion/ coordination of uniform food standards Food Law (EC) No. 178/2002 Commercial Law (EC) 2200/96

  4. EU legislations for FFV Marketing • Principles, requirements, procedures and matters of food safety • Risk analysis, precaution and traceability Mandatory for all FFV marketed in the EU Food Law (EC) No. 178/2002

  5. EU legislations for FFV Marketing • Common organization of the market in FFV • Fair trading and market transparency • Elimination of unsatisfactory or harmful quality • Improvement of production profitability Minimum requirements for all FFV marketed in the EU EU Marketing Standards for all market important FFV species Commercial Law (EC) 2200/96

  6. Minimum Requirements for FFV FFV marketed in the EU must be: • Intact • Sound • Clean • Practically free from pests and damages caused by pests • Free of abnormal external moisture • Free of any foreign smell and/or taste Source: EC; 2001

  7. Marketing Standard for Citrus Fruit For Lemons, Mandarins and Oranges: Maturity Requirements For Mandarins: Minimum juice content Mandarins excluding Clementines: 33% Clementines: 40% Coloring Must be typical of the variety on at least one third of the surface of the fruit Source: EC; 2001

  8. Why Private Standards? • Substitutes for missing public regulations • Product standardization and differentiation • Competitiveness and access to international markets • Satisfaction of consumers’ demand for • Safe, high quality and traceable food • social, animal and environmental standards • GLOBALGAP: Internationally harmonized standard

  9. GLOBALGAP Integrated Farm Assurance Standard All Farm Base Crops Base Livestock Base Aquaculture Base Fruit and Vegetables Flowers and Ornamentals Combinable Crops Green Coffee Tea Cotton Cattle and Sheep Dairy Pigs Poultry Salmonids Shrimps Pangasius Tilapia Source: Globalgap; 2007

  10. FFV Certification General Control Points and Compliance Criteria (CPCC): • Production according to GAP • Food hygiene/ safety/ traceability • Environmental and Labour standards • Quality management standards Special CPCC for FFV: • Propagation Material • Soil and Substrate Management • Irrigation and Fertigation • Harvesting • Produce Handling Source: Globalgap; 2007

  11. Benefits from Private Standards • Producer: • Market Access • Retailer: • Competition on global markets • Product differentiation (quality and safety) • Transaction cost and acquisition risk reduction • Standards are at no cost • Consumer: • Trust • Safety, Quality • Traceability Sources: Gay and Schneider; 2007/ Peris and Juliá; 2007/ Henson and Reardon; 2005

  12. Challenges of Private Standards • Producer • Pressure from retailers • Risk of loosing market share / market access • Extra costs without price premium • Difficulties for small scale farmers from developing countries • Retailer • Traceability linkages • Hygiene, Food Safety and Quality • Consumer • Added value not visible • Branding Sources: Gay and Schneider; 2007/ Chemnitz; 2007/ Vermeulen et al.; 2006

  13. Comparison of Public and Private Standards

  14. Conclusion 1 • Public Standards fully cover: • Food safety • Quality • Traceability • Practically no missing standards exist Private Standards make product differentiation possible

  15. Conclusion 2 • GLOBALGAP • internationally harmonized standard • Focusing on process quality • Effects of Private Standards • Producers can gain market access but at high costs • Retailers put pressure on producers • Retailers receive certified FFV at no cost • Consumers gain indirectly as the added value is not visible to them

  16. Conclusion 3 Remaining questions: • Does required quality reach POS? • Do Private Standards act as barriers to trade? • Are developing countries disadvantaged?

  17. Thank you for your attention!

  18. References • EC; 2001: Commission Regulation laying down the marketing standard for citrus fruit. (EC) No 1799/2001. 12 September 2001. Consolidated version • Globalgap; 2007: Integrated farm assurances. General regulations. Global G.A.P (Eurepgap). Globalgap and Food Plus. Available at: http://www.globalgap.org/cms/upload/The_Standard/IFA/English/GRs/PartI/GG_EG_IFA_GR_Part_I_ENG_V3_0_2_Sep07.pdf. Accessed: 15/05/2008 • Globalgap; 2007a: Checklist Fruit and Vegetables. Available at:http://www.globalgap.org/cms/front_content.php?idart=147&idcat=48&lang=1&client=. Accessed: 29/05/2008 • Gay, S.H. and Schneider, A.; 2007: A comparative analysis of food quality assurance schemes:The case of neuland and eurepgap. 47th annual conference of the German Association of Agricultural Economists (GEWISOLA) and 17th annual conference of the Austrian Association of Agricultural Economists (ÖGA). 26.-28. September 2007. Freising/ Weihenstephan • Henson, S.J. and Reardon, T.; 2005: Private Agri-Food Standards: Implications for Food Policy and the Agri-Food System. Food Policy, 30 (3): 241-253 • Peris Moll; E-M. and Juliá Igual, J.F.; 2007: Production costs of citrus growing in the Communidad Valencia (Spain): EurepGAP protocol versus standard production. In: Theuvsen, L/ Spiller, A./ Peupert, M. and Jahn, G. (eds.): Quality management in the food chains. Wageningen Academic Publishers. Wagneingen: 69-78 • Chemnitz, C.; 2007: The compliance decision with food quality standards on primary producer level. A case study of EUREPGAP Standard in the Moroccan Tomato Sector. 1st Mediterranean Conference of Agro-Food Social Scientists. 103rd EAAE Seminar Adding Value to the Agro-Food Supply Chain in the Future Euromediterranean Space. 23rd-25th April 2007. Barcelona • Vermeulen, H./ Jordaan, D./ Kortsen, L. and Kirsten, J.; 2006: Private Standards. Handling and Hygiene in Fruit Export Sypply Chains: A Preliminary Evaluation of the Economic Impact of Parallel Standards. Contributed Paper IAAE Conference. Gold Cost. Australia. August 12-18. Available at: http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=22649&ftype=.pdf. Accessed: 20/03/2008

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