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					          CHAPTER 6

  Sustainability standards and
  agro-food exports from East
             Africa

              By
Evelyne Lazaro, Lone Riisgaard,
Fredy Kilima, Jeremia Makindara
     and Raymond Mnenwa

        Pages 120-134
          WHAT ARE SUSTAINABILITY
           STANDARDS ALL ABOUT
•       Intend to operationalize and codify the concept
        of environmental and social sustainability

•       Seek to address consumers’ concerns over
        deficiencies in the existing food standards w.r.t.
        content and/ the way standards are implemented


•       Cover both environmental and social
        requirements

    •      E.g. organic agriculture, Fair Trade, Rainforest
           Alliance, UTZ CERTIFIED, and GlobalGAP
      THE DEBATE ON STANDARDS
    Standards, labels and certification vary w.r.t
    their functions and impacts:
•      Does it really pay to comply?
•      Some impacts are indirect and realized in the long-run:
       Can these costs and benefits be quantified accurately?
•      Do standards such as private labour standards favour
       some groups of workers?
•      Can these standards constitute new non-tariff barriers
       for smallholders farmers in Africa?
•      Are farmers in Africa competent enough to maintain an
       appropriate level of documentation as required?

•      Do the necessary infrastructure to facilitate cost-
       effective and credible quality and safety assurance
       mechanism exist?

THE CHAPTER ATTEMPTS TO INVESTIGATE THESE ISSUES
                  KEY ISSUES DISCUSSED
1.   Who adopt the standards and what types of operator
     participate in different initiatives?

2.   i)   How are the standards implemented?

     ii) Are there provisions to allow partial
         implementation of these standards?

     iii) If any, is partial implementation attributable to
          measurement problems and/poor adaption to local
          conditions?

     iv) What are the consequences of specific
         instances of such mismatch?

3.        What have been the economic and social costs
          and benefits of standard adoption in each case
          and the opportunities and threats

4.        What are the lessons on the key issues
          investigated?
                            THE CASE STUDIES
Standard         UTZ CERTIFIED             GlobalGAP                       Ethical Standards
Crop             Coffee                    Vegetables                      Cut flowers
Fieldwork date   2005/06                   2007/2008                       2006
Site             Kilimanjaro region in     Arusha and Kilimanjaro          Kenya and Tanzania
                 Northern Tanzania         regions in Northern
                                           Tanzania
Cases             Two UTZ CERTIFIED         One certified vegetable       All (Ten) export flower
                   and one non-certified       exporter,                     farms in Tanzania and
                   coffee plantations        Five large scale famers       Ten farms (out of
                  Two UTZ CERTIFIED           (three certified to           approximately 150) in
                   millers                     GlobalGAP standards),         Kenya
                  Two coffee exporters      Six medium scale
                                               farmers (all uncertified)
                                               and
                                             105 smallholder farmers
                                               (49 certified to
                                               GlobalGAP standards).
          UTZ CERTIFIED COFFE
    I) IMPLEMENTATION IN PRACTICE

•   Standard manuals to guide farm operation are
    available but producers can adapt the manuals to
    suit their unique farm operations

    -There are some grey area: E.g. the choice of
    native tree (shade) is not specified
            UTZ CERTIFIED COFFE

    2)   VALUE CHAIN RESTRUCTRURING AND
             STANDARD COMPLIANCE

•   A buyer driven chain

•   Many actors in the conventional chain are excluded

•     Smallholder farmers have not been able to adopt this
      standard:
    •    Many are not aware about the standard
    •    No local collective initiatives to support
         compliance

•    Many certified firms capable to operate without
    the support of the farmer extension or other local
    organizations
           UTZ CERTIFIED COFFE

     3) COMPLIANCE COSTS AND BENEFITS
•   Changes to farm infrastructure, waste disposal and
    environmental conservation and certification and
    inspection were the major cost components

•   Average annual cost for complaint and non-compliant
    firms were about USD 913/ha and 626/ha

•   Additional earning over conventional coffee was about
    USD 0.52/kg, however lower grades of certified coffee
    were sold in the coffee auction at Moshi

•   Compliance costs entailed higher costs compared to
    non-compliance, but there were considerable direct
    and indirect benefits
                UTZ CERTIFIED COFFE
    4)     THREATS, OPPORTUNITIES & LESSONS
•       Certification is an opportunity to expand market
        coverage and reduce risks, especially price shocks

•       Participation is not a necessary requirement for
        market access
    •      Certified estates can participate in conventional and niche
           markets
    •      Premium is negotiated (never guaranteed)
    •      Reliability and consistency of product matter!

•       Certification limited to plantations
    •      Unless they cooperate or liaise with certified plantation
           smallholder farmers may not afford it


•       Demonstration effects felt among non certified
        farmers in the neighbourhood of certified plantations
                GLOBAL GAP
       I) IMPLEMENTATION IN PRACTICE

•   Certification is flexible and it allows
    individuals (option 1) and producer groups to
    seek certification (option 2)

•   Equivalent benchmarking is also considered
    (option 3)

•   Smallholders in Tz were certified under
    option 2 (as producer marketing
    organizations (PMO)) and were all linked to
    exporters
                      GLOBALGAP
    I) IMPLEMENTATION IN PRACTICE (CONT..)
•     There were two sets of requirements:
    •   Major ‘musts’ (e.g. the use and handling of
        chemicals)—compliance was mandatory
        •     Required investment in infrastructure and
              upgrading of human resources, especially for
              exporters
        •     Individual farmers were not required to
              undertake major investment in infrastructure

    •       Minor ‘musts’—compliance needed but not
            a big deal!
    •       Excessive use of chemicals was reported
            among smallholders—exporters were
            compelled to spray smallholders’ plots
            (not for free)
                 GLOBALGAP
       I) VALUE CHAIN RESTRUCTURING
•   Certification was a requirement for entry into
    the EU-based main retailers

•   Exporters also retain access to market for
    uncertified products

•   The adoption of standard has made
    certification of smallholders possible: albeit
    under contractual arrangement
                       GLOBALGAP
           II) COMPLIANCE COSTS AND BENEFITS
•       Several benefits
    •     Knowledge on GAP, which can be applied to non-
          GlobalGAP production

    •     Market access for smallholders and better prices
          ($0.85 vs $0.6 for uncertified fine beans)
    •     Higher land productivity attributable to introduction
          of new crops with short production cycles (<4
          months) and GAP

    •     PMOs as platforms to solicit external support in
          training


•       Costs: Certification was financed by external
        parties (EU, DANIDA, African Bank and Kilimo
        Trust programmes)
                  GLOBALGAP
   4)   THREATS, OPPORTUNITIES & LESSONS
• High costs of compliance and inadequate
technical know how with w.r.t. standard
compliance

•Inadequate facilities for vegetables (e.g.
airfreight capacity at KIA)

•High rates of produce spoilage

•Sorting is not done at farm level
  • Denies farmers an opportunity to sell in the domestic
  market or use for home consumption products that
  don’t meet export standards
               GLOBALGAP
    4)   THREATS, OPPORTUNITIES (CONT.)
•Exports to the UK should comply with one, two
or a combination of three standards namely
EurepGAP, Tesco’s Natures Choice (TNC) and
British Retailers Consortium (BRC).
    SUSTAINABILITY STANDARDS IN THE
        CUT FLOWER INDUSTRIES


    I) IMPLEMENTATION IN PRACTICE (CONT..)
•   Some provisions, like pesticide storage, sanitary
    facilities and overtime pay are relatively easy to
    verify

•   Other provisions such as the presence of gender
    or ethnic discrimination and the presence of
    freedom of organization are inherently more
    difficult to verify
    SUSTAINABILITY STANDARDS IN THE
        CUT FLOWER INDUSTRIES
        II) VALUE CHAIN RESTRUCTURING
•   Coverage is related to the outlet to which the flowers
    are sold and the value chain strand considered.

•   The adoption of social and environmental standards is
    a requirement for producers participating in the direct
    value chain selling to large EU retailers

•   Producers selling through the auctions are not
    compelled to adopt the standards

•   Thus, adherence to sustainability standards is one out
    of many capacities required for entering the direct
    export
  SUSTAINABILITY STANDARDS IN THE
      CUT FLOWER INDUSTRIES
                    4)   LESSONS
•Labor organizations may use some of the more
rigorous standards to:
  •Enhance union organization and obtain collective
  bargaining agreements;

  •Understand better the operations of cut flower
  markets and;

  •Participate in discussions related to social issues


Effective organizations can use stringent private
social standards to further their influence
                     SUMMARY
•The standards considered enhanced the
possibility for producers to:
  •Undertake direct export
  •Increase their security of contracts and financial
  gains


• Except for coffee, compliance was a condition
for market access

•Small holder farmers are not compliant except
for fresh vegetables in Tz (they were supported
to comply)

•Where smallholders comply, there are several
direct and indirect benefits

				
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