By Raymond Mnenwa

1. Sustainability Standards and Agro-food Exports from Africa: Case of Vegetable Exports from Tanzania By Raymond Mnenwa

2. Outline of the paper • Introduction • Main trends and developments • Implementation of GLOBALGAP schemes in Tanzania • Conclusions and recommendations

3. IntroductionSetting • Focuses on GlobalGAP standards as an example of sustainability standards that are implemented in East Africa. • Based on a research conducted between 2006 and 2008 in Arusha and Kilimanjaro Regions. • Responds to the concerns on how the poor can benefit from the growing markets for high value agricultural products. • Opportunities for traditional exports are declining while those for non-tradional exports increasing. • Food standards requirements set by buyers in the developed countries have emerged only recently as a critical issue for market access. • The share of vegetable exports from Tanzania is persistently small even after the introduction of GlobalGAP schemes, suggesting existence of market constraints and challenges.

4. Introduction cont’dHypotheses • Since certified farmers benefit in terms of premium prices, guaranteed market, improved management, and improved product quality; the benefits of participating in GlobalGAP compliance schemes will be higher than compliance costs. • Since GlobalGAP schemes are implemented through a contract farming system; certified farmers benefit from contract farming arrangements more than they do from the actual GlobalGAP certification per se.

5. Introduction cont’dMethodology • The study was conducted in Arusha and Kilimanjaro regions; • Kilimanjaro and Arusha are the places where GlobalGAP schemes are implemented in the country. • Both primary and secondary data were collected on these aspects. • 146 (69 certified and 77 uncertified) smallholder farmers; 5 (all uncertified) medium scale farmers; 5 (three certified and 2 uncertified) large scale farmers and one exporter was drawn. • Primary data were collected using a semi-structured questionnaire. • Qualitative analysis was used to assess the structure and characteristics of the value chain, while quantitative analysis using means were used to quantify costs and benefits of compliance.

6. The GlobalGAP standards • GlobalGAP standards are one of the sustainability standards implemented in East Africa. • Sustainability standards are standards which seek to operationalise and codify the concept of environmental and social sustainability. • Other examples of sustainability standards: Organic farming; Fair trade; Rainforest Alliance; Utz certified. • GlobalGAP is designed to embody Good Agricultural practices (GAP) and Good Manufacturing Practices (GMP) • It is owned by European based growers; food manufacturers; and retailers. • Covers fruits; fresh vegetables; green coffee; tea; flowers; ornamentals; livestock; feeds; and acquature. • Defines GAP in relation to integrated crop management; integrated pest control; quality management; hazard analysis and critical control points; worker health; safety; welfare; environmental protection and conservation.

7. GlobalGAP schemes • GlobalGAP can be implemented under two main types of schemes: Option 1 and Option 2. • Option 1=An individual producer applies for GlobalGAP certification and becomes the certificate holder. • Option 2=A producer group applies for the GlobalGAP group certification and the group becomes the certificate holder. • In Tanzania smallholders are certified under Option 2 while large scale producers are certified under Option 1.

8. GlobalGAP in Tanzania at farm level • Certification • Upgrading • Traceability and monitoring

9. Certification • The scheme is implemented under a contract arrangement which interestingly has both certified and uncertified. • For large scale farmers, because they have the capacity are registered under Option 1. • The farmers have to be able to meet GAP requirements: In the study area among the 12 medium scale farms that were visited only 4 had acquired a GlobalGAP certificate. • Smallholder farmers have to be organized in groups (PMO) to be certified under Option 2. • Out of the 7 cooperatives three had acquired a full GlobalGAP compliance status. • Certification process is complicated by the lack certifiers locally, external certifiers are expensive.

10. Upgrading • GlobalGAP has sets of requirements including record keeping system, site management, soil erosion control, fertilizer usage and storage, quality of water for irrigation, use and handling of chemicals, product handling during harvesting, post harvest treatment, worker health, safety and worker welfare, and environment issues. • These require construction of chemical stores, toilets, mixing areas and water taps;purchase of chemical application equipment and facilities for disposal; and purchase of grading, cooling and storage facilities. • Most of these investments could only be made by the large and medium scale vegetable producers. • Literature acknowledges the role of lead firms in upgrading (Gereffi, 1999) and in governing value chains (Gereffi, 1994). • Both the farmers and exporters have been receiving support from their respective lead firms and development partners.

11. Traceability and monitoring • According to Golan, et al. (2004), traceability systems are record keeping systems designed to track the flow of product or product attributes through the production process or supply chain. • GlobalGAP Protocol, specific procedures designed to produce particular desired outputs are outlined. • Producers certified under Option 2 are organized in a PMO which have a well developed quality management system (QMS) routinely audited every three months with the fourth inspection being the basis for the renewal of certification. • Producers certified under Option 1 do not have to establish a QMS, but they are required to carry out internal assessment at least once a year against the GlobalGAP Integrated Farm Assurance (IFA) Control Points and Compliance Criteria (CPCC).

12. Benefits of compliance • No-financial benefits: capacity building-training, access to credit, introduction of new crops, intensification, quality, market access, auditing and traceability. • The study shows that certified smallholder farmers have realized yields. • For instance baby corn and green beans peas yields for certified farmers are high than the yields for uncertified farmers by 10% and 16%, respectively; and more so for peas in which certified farmers yields are higher by almost 32%. • The prices for uncertified fine beans and snow peas farmers are lower by almost 1.8% and 1.7% respectively, than the prices for certified farmers. • Net revenues from for certified smallholder farmers from baby corn was 10% and 24% higher than the revenues for uncertified farmers.

13. Conclusions • Compliance with GlobalGAP has both benefits and costs. • Benefits include financial non financial benefits • Costs include certification costs, upgrading and traceability and monitoring; • Certified farmers have double benefits: contract and certification benefits; • Since both certified and uncertified are both in the contract farming system then the differences can largely be explained by certification. • If costs of training, auditing, certification, etc were included GlobalGAP would be less feasible to smallholder farmers. This threatens its sustainability.

14. Recommendations • It is proposed that the resources such as agricultural inputs, equipment and services provided by the lead buyers in importing countries and exporters in Tanzania could be relieved of taxation. • Of now exporters rely on external certifiers from abroad who are practically expensive and unreliable. An effort is proposed to promote the establishment and capacity building for local certification bodies. • For the effective policies to promote GlobalGAP schemes there must be strong and practical interventions specific to contract farming and certification. • Interventions are also required to promote PMOs for them to convert into strong organisation which can take the lead in certification, upgrading and traceability.

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