Organic enterprise project report by Ravi Teja Reddy
Wto
1. Exporting Agricultural Commodities:
Challenges before the Producers & Exporters
Dr.K.M.Singh
Professor & Head,
Deptt. Of Dairy Economics, S.G.I.D.T., Patna-14
m.krishna.singh@gmail.com
Workshop on WTO Issues, Codex Standards and SPS Measures: Implications for
Agricultural Producers and Exporters,
June 24-25th
, 2008, DNS RICM, Patna
Organized by NCAP, New Delhi and State Farmers Commission, Bihar
2. Challenges before the Producers and Exporters
• In a global environment, to be players in exporting our agri
produce and processed foods, meeting or not meeting
international standards is not an option.
• People all over the world are becoming far more Quality
conscious, and governments are laying down rigid Quality
standards for all food items and fresh agri products.
• We, in India, are increasingly becoming aware of Quality.
• It is imperative that the highest attention be given to ensure
quality of all agri produce, meeting domestic and international
standards.
• Massive communication to farmers, aggregators, exporters, food
processors, sorters and graders will need to be carried out by
government and the private sector, to ensure Quality is never
compromised.
• The Western world is fighting to reduce subsidies in their own
countries, as required by WTO, as and when WTO agreements
are reached, some countries may levy non-tariff barriers by
quoting Quality as the reason for not importing.
3. • Controversies like over usage of pesticide or fertilizers could become
reasons for importing non-tariff barriers.
• Agri managers, governments, exporters and domestic marketers will
have to have a total passion to ensure Quality and never compromise
on Quality.
• For the past few years there has been a considerable concern to
accelerate agricultural exports.
• The share of agricultural exports in total national exports has
witnessed a secular decline from 17.8 per cent in the early Nineties to
almost 11.2 per cent in 2004-05, which is a cause of concern.
• A recent report by the Agricultural Products Export Development
Agency (APEDA) also indicates difficulty in doubling agri exports
primarily due to increasing domestic demand for many products.
• The export basket, which primarily included rice, tea, spices, cashew
nut, wheat and coffee has been shifting significantly to rice, oil,
marine products and horticultural products.
• An increase in exportable products other than wheat and oilseeds is
a welcome change as India is already diversifying into cultivation of
fruits and vegetables on a large scale.
• The export value of fresh fruits and vegetables has almost got
doubled from 2001-02 to 2004-05.
Contd.
4. Indian Scenario
• India has been competitive in many horticultural
products and has already made a niche in the global
markets for fresh and processed fruits and vegetables.
• However, knowing that India is the second largest
producer of horticultural products in the world, hardly
two per cent of the produce gets exported.
• Several reasons have been given for low exports of
horticultural products, some of which include
– Poor Quality/substandard products
– Minimal processing and value addition
– Weak infrastructural facilities
– High domestic demand for horticultural produce, preferably
fresh produce, which is increasing due to changing food
habits and increasing per capita incomes of the masses.
– Lack of infrastructure to airlift fresh agri produce or
refrigerated containers and port facilities for transportation
by sea.
5. Indian Scenario (contd.)
• The extent of value addition of horticultural
products in India is hardly 2 per cent and the
post-harvest losses are high at almost 30 per
cent.
• These statistics present a grim picture when
compared with the developed countries, like
USA and France, which have value-addition to
the extent of 70 and 50 per cent, respectively
with minimal wastages.
• Even the developing countries such as Malaysia
and Brazil encourage value-addition of
horticultural exports, which at present stand at
83 and 70 per cent, respectively.
6. Indian horticulture produce suffers from
low processing rate due to:
• Preferential demand for fresh fruits and vegetables than the
processed products by a majority of population and hence little
availability for processing.
• Low market surplus due to sustenance farming rather than
market-driven farming.
• Lack of awareness about primary and minimal processing
• Small size of land holdings are unable to support the industry
with suitable raw material
• Tendency of the industry to procure from mandi where there is
no control over the grades and quality, which reduces the
processing efficiency.
• Poor infrastructure takes its toll in maintaining quality of
produce.
7. (contd.)
• Absence or near-zero availability of cold storages, refrigerated
vans, cargoes and proper roads a major handicap in promoting
horticulture growth.
• FICCI estimates, a total sum of Rs 65000 crore is required for
development of agriculture marketing infrastructure in India.
• Doubling agri exports would require increasing investments in R
& D to increase productivity and quality, and extension services
to communicate technology to the farmers.
• Sustained efforts towards cultivation of fruits and vegetables on
a large scale,
• Quality preservation and food safety, promotion of food
processing and infrastructure development.
• A disciplined approach needed to examine the problem of the
agri sector and plan coordinated efforts to solve them in a time
frame.
• Process should start right at the farm gate, followed by
monitoring at every stage of processing up to the final stage of
marketing.
8. But India is a strategic player in the
world in the Food Sector
• Is the second largest producer of fruits and vegetables in the
world next only to China
• The processing of fruits and vegetables is only 2 to 3% in India
as against 83% in Malaysia 72% in Thailand and 70% in Brazil
• Second largest producer of wheat
• Accounts for about 31% of the world production of raw cashew
and nearly 48% of the world's export of cashew kernels
• Is one of the largest agrarian economies of the world with 51%
arable land compared with world average of 11%
• Its Agriculture contribution to GDP is 20% and its output value
is $ 100 bn
• Is bestowed with moderate climate, abundant sunshine, more
irrigated land and adequate trained man power
9. Reasons for low export share
Main reason is lack of confidence in the
safety of our fruits and vegetables due to:
• High pesticidal and other chemical residues
• Micro-biological contamination
• Comparatively poor and inconsistent quality in
produce.
• Short shelf life
Product safety can be addressed by
implementing quality standards
10. Influence of the global environment
• International trade – food safety requirements
• Importing country requirements
• WTO Agreements
– Sanitary and Phytosanitary Agreement(SPS)
– Technical Barriers to Trade (TBT)
• Codex Alimentarius – reference standards
11. Standards as a ’trade passport’?
• Standards define whether a good is fit for
trade
• Key issues for developing countries:
– Who defines standards?
– Who decides the content?
– Who sets the measurement methods?
– Who pays for the costs of compliance,
monitoring and verification?
– Who captures the benefits?
13. Agro-food standards: simplified typology
• Mandatory
– Import regulation (i.e. food safety, geographic
indications, labelling)
• Voluntary
– International standards (ISO, Codex, SA8000)
– Labels (organic, fair trade, eco-labels)
– Model codes of conduct (EUREP-GAP, ETI)
• Private
– Defined and owned by a company (supermarket
chain quality standards)
• Considerable overlaps
14. Specialty and Sustainable agricultural standards
• Issues of participation in the setting of standards
– Who benefits? Who pays?
• Different stories
– Specialty
– Fair trade
– Organic
– Shade-grown
– Mainstream initiatives on sustainability
15. Consignment Detentions- reasons?
• Presence of non-authorised pesticides
• Exceed pesticide MRLs
• Inadequate labelling and packaging
• Contaminants exceeding regulatory levels
• Microbiological contamination
• Lack of nutritional information
16. Quality standards for Agricultural Produce
In addition to safety, major buyers in Europe have
established quality standards for each fresh farm
produce which may cover the following aspects:
• Size, Shape and Pattern
• Defects
• Gloss
• Colour
• Feel
• Organoleptic qualities (sensory qualities)
18. ..........or in other words
GAP standards/
guidelines
Laboratory
Analysis
Training/
advisory
services
Scientific
research
Inspectorate
CertificateCertificate
Private sector
input/ application
20. Good Agricultural Practices
Pre Harvest Care
1. Testing of soil and water for any possible contamination by heavy metals
like, Lead, Arsenic, Cadmium or toxic chemicals etc. so as to ensure at
least one time protection for crops to be grown in the field.
2. Farming equipment must be cleaned and washed with unpolluted water.
3. Use only certified seeds in order to avoid admixture and maintain quality.
4. Use recommended dose of fertilizers, pesticides and irrigation with
unpolluted water only, avoidance of damage, immature and shriveled
grains, pesticidal residues and attack of pests and fungus.
5. Pesticidal treatment, both prophylactic and control must be judicious and
at right time. Sufficient gap between treatment and harvesting is
necessary for minimizing the risk of pesticidal residual toxicity.
6. Follow the cultural practices to avoid the mixture of toxic weed seeds
and seeds of plants of other crops and varieties.
7. Harvest the crops when all the grains are fully developed and attained
maturity, luster and varietal colour for better realization of prices.
21. Good Practices contd…
INTEGRATED PEST MANAGEMENT:
The integrated pest management is a concept of
environmentally sound and sustainable strategy of keeping the
pest population below economically damaging level. Integrated
pest management is based on keeping the pest population
below the level at which no significant damage to the crop is
done. This involves-
– (a) Good agronomic / Cultural practices or modifying agronomic
practices.
– (b) Use of resistant varieties
– (c) Use of Bio-pesticides
– (d) Judicious use of necessary chemical pesticide to keep the pest
population below the damaging level
– Through integrated pest management practices, hazards of pesticide
residue are minimised, ecological balance is maintained and cost
effective way of mitigating the pest menace.
(For details contact- Central Integrated Pest Management Center, Directorate
of Plant protection and Quarantine, Ministry of Agriculture, Department of
Agriculture and Cooperation, Government of India. www.agricoop.nic.in)
22. Hazard Analysis and Critical Control Points (HACCP)
• HACCP is a systematic preventive approach to food safety and
pharmaceutical safety that addresses physical, chemical, and
biological hazards as a means of prevention rather than finished
product inspection.
• HACCP is used in the food industry to identify potential food safety
hazards, so that key actions, known as Critical Control Points (CCP's)
can be taken to reduce or eliminate the risk of the hazards being
realized.
• The system is used at all stages of food production and preparation
processes including packaging, distribution, etc.
• The Food and Drug Administration (FDA) and the United States
Department of Agriculture (USDA) use mandatory juice, seafood,
meat and poultry HACCP programs as an effective approach to food
safety and protecting public health.
• Meat and poultry HACCP systems are regulated by the USDA, while
seafood and juice are regulated by the FDA. The use of HACCP is
currently voluntary in other food industries.
23. Voluntary standards for the certification
of agricultural products around the globe
• EurepGAP is a private sector body that sets voluntary standards
for the certification of agricultural products around the globe.
• EurepGAP is an equal partnership of agricultural producers and
retailers which want to establish certification standards and
procedures for Good Agricultural Practices (GAP).
• EurepGAP is a pre-farm-gate-standard that means the certificate
covers the process of the certified product from before the seed is
planted until it leaves the farm. EurepGAP is a business-to-
business label and is therefore not directly visible for the
consumers.
• EurepGAP is a set of normative documents.
• These documents cover the EurepGAP General Regulations, the
EurepGAP Control Points and Compliance Criteria and the
EurepGAP Checklist.
24. EUREOGAP
What is EUREPGAP
• A set of normative documents developed by EURO-Retailer Working Group
(EUREP) for Good Agricultural Practices (GAP) for worldwide standards for
the production of fresh fruits, vegetables and cut flowere.
Why EUREPGAP
• EUREPGAP standards came into being only on the increased awareness
amongst consumers demanding about safe food. In this regard consumers
are particular bout the way the fresh fruits and vegetables are produced.
They are particular about the environment aspects as well.
Who are involved in EUREPGAP?
• FoodPlus based at Cologne, Germany, ats as the global body for
EUREPGAP and hosts EUREPGAP Secretariat. It serves as the legal owner
of EEUREPGAP standards
EUREPGAP changed to GLOBALGAP
25. Who Administers EUREPGAP?
FOODPLUS GmbH, a non-profit making organization located in
Cologne, Germany is the global body for implementation of
EUREPGAP activities.
EUREPGAP members
EUREPGAP members include retailers / suppliers / growers and
associate members from the input and service side of Agriculture.
Coverage
The scope of fresh fruits and vegetables are all those agricultural
products of plant origin grown for human consumption.
26. EUREPGAP Certificate
•
EUREPGAP Certificate can be achieved under the following options
Option (1): Individual grower applying for EUREPGAP Certificate
Option (2): Primary Marketing Organisation (PMO) or any other
type of producer organisation applying for EUREPGAP Certificate.
PMO must have legal structure, contract with each grower, entry
and exit requirements, stipulated sanctions agreement to comply
with EUREPGAP for registered members.
•
27.
28. Requirements of EUREPGAP
Standards
• Traceability
• Record Keeping and Internal Self-
Inspection
• Varieties and Rootstocks
• Site history and Site Management
• Soil and substrate Management
• Fertilizer use
• Irrigation / Fertigation
29. Requirements of EUREPGAP
Standards (contd.)
• Crop Protection
• Harvesting
• Produce handling
• Waste and Pollution Management, Recycling
and Re-use
• Worker health, Safety and Welfare
• Environmental Issues
• Complaint Form
This standard is certifiable
30. Relevant Codex standards
Code of hygienic practice for FFV
Recommended International Code of Practice
for packaging and transport of tropical fresh
fruits and vegetables
General principles of food hygiene/HACCP
Approved MRLs to prevent the misuse of
pesticides and promote the use of approved
pesticides, etc.
31. Food industry/producer role
• Responsible for supplying safe and
wholesome products
• Consumer information regarding product
characteristics and associated cost and
benefits (transparent and clear
information)
• Knowledge of trading environment
• Implement GAPs, GHPs, HACCP (pre-
and post harvest)
33. Situation in India about Standards for Agricultural
Produce
• At present, no agreed quality standards for fresh
agricultural produce are available.
• Each buyer has got their own product specification
based on which their agents in india procure their
produce.
Quality Scene in the Organized Retail markets in
India
• Very little check on product safety, as produce is
collected from different sources and packed centrally.
• No uniform system of grading.
• No system of maintaining traceability.
• Non-standardized packaging.
34. Export Procedure
• Inspection of agricultural commodities meant for export as per
the requirements of importing countries under International
Plant Protection Convention (IPPC) 1951 of FAO as per the
model certificates prescribed under IPPC and issue
Phytosanitary Certificate:
• The export inspections are carried out to facilitate certification
of exportable plants and plant material as per the requirement
of importing country in line with the above Convention.
• The export inspections involves sampling and detailed
laboratory tests in case of seeds and planting material for
propagation whereas visual examination with hand lens and
washing tests, etc are carried out for plant material meant for
consumption.
• The export inspections are conducted at exporters’ premises
also to facilitate exports for agricultural commodities meant for
consumption.
35.
36. The areas that need special attention are:
Documented traceability techniques
• Installation and propagation of EUREPGAP and other
similar quality assurance system. FICCI’s Quality cell
has developed the expertise to certify Quality as per EU
standards.
• Knowledge dissemination about Good Agricultural
Practices and HACCP (Hazard Analysis and Critical
Control Points) at both pre and post harvest stages.
• A Food Safety Board should be constituted jointly by the
Ministry of Food Processing, APEDA and Quality Council
of India to monitor and regulate the food certification
activities in India relating to HACCP & EUREPGAP.
37. Infrastructure development
• Foster Public-Private Partnerships for infrastructure
creation and technology up gradation.
• Strengthen the cool chain management and establish
linkages with super markets.
• Develop cold chain transportation system e.g. air-
conditioned cargo, coaches in railways, roadways etc.
and refrigerators/ insulated containers for perishables,
processed products to minimize post-harvest losses at
transportation stage and at retail level.
• Develop specialised markets for fruits and vegetables.
• Incentivise creation of facilities for collection, sorting,
grading and transportation of agri produce to
Processors/Markets.
38. Effective market promotion of Indian fruits
and vegetables
• Reduce airfreight charges.
• Address and mitigate the issues like quota,
tariff, SPS and pest risk analysis.
• Clearances for export of fresh fruits, vegetables
and other perishable commodities must be
facilitated within 24 hours.
• Establishing temperature-controlled warehouse
and pack houses to facilitate the export of fresh
fruits and other perishables at all international
airports.
Editor's Notes
Standards are mandatory when they are set by governments in the form of regulation. These may affect trade flows by placing food safety requirements, testing, certification and labelling procedures on imported agro-foods
Voluntary standards arise from a formal coordinated process in which key participants in a market or sector seek consensus.
The International Standardization Organisation (ISO) has established over 7,000 voluntary standards. Codex Alimentarius and SA8000 (social accountability for auditing and certifying labour practices) are other examples of these
Some of these are also introduced as a response to consumer requests (such as eco-labels) or as a result of NGO-initiatives (such as fair trade labelling).
Sectoral organisations can also establish voluntary standards that apply to their members
EUREP-GAP: good agricultural practices, consortium of EU supermarket chains for fresh produce and flowers; ETI: alliance of companies, non-governmental organisations (NGOs), and trade union organisations: identify and promote ethical trade - good practices in the implementation of a code of conduct for labour standards
Private standards are developed and monitored internally by individual enterprises. What distinguishes them from mandatory and voluntary standards is their general lack of third party verification, and a lower degree of transparency and participation of affected stakeholders.
The distinction between mandatory, voluntary and private standards, however, is becoming increasingly blurred. Although voluntary standards are not mandatory by rule, some of them (such as the ISO 9000 standards on quality management) have become de facto standards, meaning that they are required for producers if they want to compete globally (importance of GVC).
The distinction between private and voluntary standards is also to some extent arbitrary, as many private enterprises borrow parts of voluntary standards. Some voluntary standards are based on previously private standards that gain wider acceptance.
Adherence to voluntary and/or private standards is often a pre-condition for the acceptability of products by consumers and/or distributors.
Specialty: mainly estates have benefited from higher demand for specialty quality coffee; in countries that have liberalised their domestic markets (East Africa ex.), smallholders get paid the same price for coffee, whether is high quality or not (there are exceptions of course)
Fair trade: minimum price; capacity building within cooperatives; issues of who gets in and who stays out from the register; long-term sustainability? But at least, consumers pay extra for it at retail level
Organic: small premium; costs of compliance and certification are a problem; developed initially by Northern farmers; participation in standard revisions from South attempted; consumers pay more
Shade-grown: decided by Northern environmentalists; top-down (more than others); often no premium; extra costs to comply;
Mainstream initiatives: large coffee roasters are trying to cover their back in response to NGO pressure (coffee crisis); buying into the idea of certifying ’sustainable coffee’ without paying any extra for it. Usually in the form of ’preferred supplier systems’. The standards are laxer than org, ft and shade grown. Redefining coffee ’fit for trade’ in the future?
Associated economic losses
costs of detentions
- loss of business
- country reputation
costs with illness
-
A basis for national standards and guidance for food industry