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    Challenges in agri-food exports: Building the quality infrastructure

     

     
     
    International Trade Forum - Issue 3/2010

    Many developing countries are ill equipped to take advantage of the opportunities provided by trade. Weak infrastructure, lack of capacity and the inability to meet technical product specifications and stringent requirements in terms of quality, safety, health and the environment impede their integration into global markets.

    They need to enhance compliance with technical standards to heighten consumer confidence and gain access to regional and global value chains, especially those of transnational corporations. In the rules-based trading system, the agro-food sector provides immediate opportunities as many developing countries have good climatic conditions, available arable land and a sufficient pool of labour to expand agricultural production. Given the low level of initial investment required in small-scale operations, small and medium-sized enterprises (SMEs) in agro-processing can readily move up the value chain, thereby generating poverty reduction and development in rural communities.

     

    Role of national quality infrastructure

    With the globalization of production, and supply and retailer chains, ensuring the safety and quality of products is vital. Recent health concerns arising from bovine diseases, bird flu and various toxins entering the food chain have led to stringent standards and conformity procedures, particularly in the area of agro-food exports. Exporting countries must acquire the capability to conform to requirements in terms of quality, safety, health and the environment if they are to participate fully in global markets.

    Two WTO agreements - Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS) - define the rules under which standards and technical regulations can be formulated and how disputes are resolved. In formulating the agreements, it was recognized that developing countries have significant gaps in national standards infrastructure, and specific clauses in the agreements refer to the need for technical assistance to be provided to them.

    The technical regulations and standards applied in developing countries, including packaging, marking and labelling requirements, are often incompatible with international standards. Laboratory capacity to test and certify goods for developed markets is also patchy. Steps taken to nurture a quality culture will build client and consumer confidence, not only in international markets, but also in domestic markets.


    Building blocks of compliance capacity

    Developing countries must be able to prove the reliability of their test data, maintain high-quality certification and inspection procedures and establish conformity to international standards and/or those applied in importing countries. Local metrological (measurement and calibration) and testing capabilities reduce testing costs which would be incurred if products could only be tested abroad or through locally based international services.

    Demonstrating a capacity to conform to standards requires the establishment of efficient testing, certification and accreditation mechanisms to meet the requirements of the SPS and TBT agreements. Compliance infrastructure will broadly include the following: national standards institute; microbiology and chemical testing laboratories; national metrology institute; and national accreditation cert-ification capacity to certify enterprises for ISO 9001, ISO 14001 and ISO 22000 and to train internal auditors.

    Compliance services are costly but should be considered a public good. Least developed countries in particular may require international assistance to establish costly new standards infrastructure.

    UNIDO was established in 1966 and became a specialized agency of the United Nations in 1985. It has 173 member States and is responsible for promoting sustainable industrial development in developing countries and economies in transition. Its headquarters is in Vienna, Austria, and it is represented in more than 50 countries. UNIDO has three thematic priorities:

    • Poverty reduction through productive activities
    • Trade capacity building
    • Environment and energy.

      

     CASE STUDY

    Supporting 'farm to fork' traceability

    Egypt

    In 2002, following a series of food scares in the 1990s, the European Union (EU) created the European Food Safety Authority which focuses on tracing the production of food and feed through all phases of production, processing and distribution.

    Egypt needed to create the institutions and procedures to meet these new safety standards for exports to the EU, one of its main trading partners. UNIDO established the Egyptian Traceability Centre for Agro-Industrial Exports (ETRACE), developed product-specific traceability manuals and trained more than 600 national experts. Initial assistance focused on 11 horticultural products involving 47,000 growers and about 5 million workers and some 100 processing and packing houses in the Nile delta, which received technical and financial assistance. There were more than 250 field visits by experts and some 40 technical assessments that traced the progress of farm products through its value chain, 'farm to fork'. Assistance was given to the plant quarantine department and to the national pesticides database. ETRACE also assists food manufacturers. Mock traceability alerts in association with a European supermarket showed that rejected produce could be identified within 24 hours of enabling a product recall. ETRACE also helps minimize the spread of contagious plant and animal diseases through early detection while tracking the food chain and improves supply-chain management and efficiency.

     

    CASE STUDY

    Assisting fisheries to achieve EU compliance standards

    Pakistan

    The EU Food and Veterinary Office inspected the fisheries industry in Pakistan in 2005 and found several areas of non-compliance with EU regulations on consumer health and safety. Efforts to gain access to the lucrative EU market were hampered by outdated production methods and by lack of compliance with EU SPS standards.

    The marine fisheries department of Pakistan's Ministry of Food, Agriculture and Livestock worked with UNIDO to overcome the problem. UNIDO provided expert advice to redesign and re-equip laboratories and train staff. The laboratories participated successfully in the required International Proficiency Testing, and 18 laboratories gained international accreditation for product testing. UNIDO assisted in improving standards in the supply chain based on a detailed study of fish production. More than 1,100 people, including fishermen, boat owners, fish auctioneers and government staff, were trained. Standard Operating Procedures were developed: upgrading the EU-mandated competent authorities; improving landing sites; renovating auction halls; and introducing Hazard Analysis and Critical Control Point practices and information technology-based traceability methods in 11 fish processing plants.

     

    CASE STUDY

    UEMOA/ECOWAS members improve and harmonize SPS service providers

    West Africa

    UNIDO is working with eight countries members of the Economic and Monetary Union of West Africa (UEMOA) and the Economic Community of West African States (ECOWAS) to strengthen export competitiveness. All these countries, with the exception of Côte d'Ivoire, are least developed countries with limited export performance and infrastructure.

    Key export products are cotton, fish, fruits, vegetables, cashew nuts, oil seeds and edible oils. Internationally accredited microbiological and chemical testing and SPS compliance systems were not availble to local exporters. UNIDO assisted in:

    • Establishing a subregional institutional structure for coordinating standardization, certification and quality promotion
    • Establishing modern national standardization institutes in each country
    • Creating a subregional accreditation body
    • Training 500 executives and scientists, 200 private consultants, 53 auditor evaluators and 50 auditors for standards implementation
    • Adopting standards for 500 key products and giving easy access to international standards
    • Developing a database for the standards and technical regulations of the eight countries
    • Establishing a quality awards system for the best performing enterprises.

    The countries agreed that regulations dealing with accreditation, certification, standardization and metrology should be harmonized and unified in view of the paucity of resources available in the region. Regional structures will be established. 


    CONFORMITY ASSESSMENT

    Defined

    Conformity assessment, according to the definition of ISO/IEC 17000, is the 'demonstration that specified requirements relating to a product, process, system, body are fulfilled'. It involves sampling, inspection, testing and certification as a means of giving assurance to the parties of a transaction that the product, process, system, body or person does in fact conform to the requirements of a standard.


    CHALLENGES & OPPORTUNITIES

    For developing countries in building conformity infrastructure

    Challenges

    • High cost of compliance - the costs of establishing the technical infrastructure for complying with standards and technical regulations constitute a major obstacle to building productive capacity in developing countries.
    • Lack of institutions, infrastructure and human resources for providing conformity assessment - the certification and testing capacities are non-existent or weak, or have difficulty demonstrating that the national certification and testing schemes meet international best practice standards.
    • The multitude of often contradictory standards - ranging from national, international, private, product and process-related standards, leading to the question of which standards developing countries have the capacity to comply with?

    Opportunities

    • Competitive advantage - if developing country exporters are able to demonstrate and prove that they comply with the standards, they can enter the global value chain, gain consumer confidence and trust and benefit from access to a larger market which will ultimately lead to growth, wealth creation and poverty reduction.

    TOOLS & GUIDES FOR DEVELOPING COUNTRIES

    UNIDO

    Fast forward: National Standards Bodies in Developing Countries

    Fast forward is a joint publication by the International Organization for Standardization (ISO) and UNIDO on the establishment and management of national standards bodies. It covers the main principles of standardization at national, regional and international levels, illustrating the building blocks essential for the development of a national quality infrastructure that enables sustainable development and fulfils the technical requirements of the multilateral trading system.

    Labnetwork Portal

    Labnetwork is a joint effort by UNIDO and the World Association of Industrial and Technological Research Organizations, in partnership with the International Laboratory Accreditation Cooperation, ISO, BIPM (International weights and measures office) and Vimta Labs Ltd (India), to create a global laboratory network in the field of testing and calibration. It draws together members from developed and developing countries and provides a forum for the pooling and sharing of knowledge, experiences and information on laboratory development.

    For further information, visit www.labnetwork.org.