Joint UNCTAD / WTO Informal Joint UNCTAD / WTO Informal Information Session on Private StandardsInformation Session on Private Standards

WTO Headquarters, Geneva25th June 2007

By Christie F. Robert

qa plus asia-pacific sdn. bhdqa plus asia-pacific sdn. bhd

Experiences in South East Asia

Scope of presentationScope 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 Major Tropical Fruits” – global production & tradeproduction & 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

Concentration Of suppliers and

retailers

Stricter quality & Safety market requirements

Developing highvalue /added

value and new products

Market

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 tradeStandards 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 Growth of Private sector standards

Pre-farm gate Post farm gate Retail outlets & Supermarkets

SQF 1000EurepGAP

Freshcare Code of Practice (Australia)

Tesco (Nature’s choice)

Marks & SpencerAuchan

Carrefour

SQF 2000BRC Global Std.Dutch HACCP

International Food Standard (IFS)

ISO 22000

SQF 3000

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

Private sector standard & National GAP Schemes

EurepGAP & National GAP SchemesEurepGAP & National GAP SchemesEurepGAP

SALMThai ‘Q’ GAP Vietnam GAP

Generic Control points and compliance criteria for all

fruits and vegetables

Generic in nature-Control points addressed but not

specific in compliance criteria.

ACFS under the NACFSC has established general GAP control points for

foods which cover FFV.DOA has established specific

criteria for each crop

Legal framework for horticultural practices is

enacted by Standing Committee of the National Assembly-in the form of a

series of Ordinances

Strong on record keeping, documentation, self-audit

Farms must keep up-to-date records. Internal audit

to be conducted yearly.

Place little emphasis on documentation. Not

detailed as in EurepGAP

Framework does not address Record-Keeping

and self inspection-which is not a legal obligation of the

producer

Recommended pre-harvest & re-entry intervals must

be observed.

Requirements for PHI are addressed but not REI

Food safety is the core concept

Requirement for Risk assessment on produce

handling e.g. food hygiene

Hygiene is encouraged but does not require a risk

assessment

Worker Health, Welfare & Safety-requires to undertake a risk

assessment and action plan

No risk assessment but encourages action plan for safe working conditions.

Relies on government regulations

Does not have control points on these issues.

Depends on government regulations

Certification is independent. Carried out by accredited certification

bodies

Certification is carried out by auditors from

Department of Agriculture whose extension officers provide advisory services

to farms

Certification by ACFS which is part of the Ministry of

Agriculture & Cooperatives (MOAC)

EurepGAP & National GAP SchemesEurepGAP & 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 ExportsFFV-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

Malaysia (2005) Singapore 52%

Indonesia 13%

Thailand 9%

EU-15 5%

Thailand (2005) Japan 20%

China 20%

EU-15 13%

Indonesia 5.3%

Malaysia 2.3

Singapore 1.8%

Vietnam (2003)excluding nuts China 26.3%

USA 25.0%

EU-15 7.9%

Singapore 1.5%

ASEAN FFV ExportsASEAN 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 Common obstacles to GAP implementationimplementation

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 Potential and real gains/opportunities from GAP implementationGAP 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 Need for supportive government policies for

linking smallholders to global supply chainslinking 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 Linking smallholders to the supply chain (Malaysia)-Role of FAMAchain (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 Core of the adjustment strategies in Malaysia and Thailand to comply with private sector standard and / or National to comply with private sector standard and / or National

GAP SchemesGAP 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

Recommendations 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

RecommendationsRecommendationsGAP DocumentationGAP 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

RecommendationsRecommendationsCapacity building on WTO’s SPS andTBT 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

RecommendationsRecommendations

Auditing Suggest that regional workshops

be organized for agricultural auditors

-consistent auditing procedures -correct interpretations on

compliance -eliminate ‘soft’ auditing -provides confidence in certification

RecommendationsRecommendations

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

Thank YouThank You

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