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    Standards and trade development facility: A collaborative approach to strengthen sanitary and phytosanitary capacity

     

     
     
    International Trade Forum - Issue 3/2010

    © José Carlos Alexandre Shrimp Fisherman in Benin

    Despite the potential for trade in food and agricultural products to generate economic growth and reduce poverty in developing countries, meeting food safety, animal and plant health requirements remains a challenge for farmers, processors and government agencies in some countries.

    Bringing together more than 20 different organizations, the Standards and Trade Development Facility (STDF) focuses on enhancing the capacity of developing countries to implement international sanitary and phytosanitary requirements in order to facilitate market access. In many developing countries agri-food exports offer significant potential to generate employment, increase income levels and enhance livelihoods. However, in trading their produce, countries are often challenged by strict health and safety requirements relating to food safety, animal and plant health - also known as sanitary and phytosanitary measures (SPS).

    Exporters need to comply with SPS standards set by their trading partners, particularly for high-quality foods, including fresh and processed fruits and vegetables, fish, meat, nuts and spices. According to a 2005 World Bank report, such high-quality produce accounts for more than half of developing countries' food exports. However, in many developing countries, limited awareness about the importance of SPS capacity, combined with inadequate technical skills, infrastructure and other resources in both the public and the private sectors, hinders the ability of exporters to take advantage of these opportunities.

    The Standards and Trade Development Facility

    The World Trade Organization (WTO) Agreement on Sanitary and Phytosanitary Measures encourages governments to help developing countries meet their international obligations. Established in 2002, the Standards and Trade Development Facility is a joint initiative in capacity building and technical cooperation aimed at raising awareness, enhancing coordination and mobilizing resources in the area of food safety, animal and plant health standards.

    The STDF offers financing grants to developing countries for project development and implementation. Since its inception, it has approved more than 40 project preparation grants and 43 projects, of which 55% have been allocated to least developed and other low-income countries.

    The STDF also provides a forum to enhance coordination and share information on SPS-related technical cooperation activities at global, regional and national levels. Examples of the STDF activities include: action-oriented research on good practice in SPS technical cooperation; work on the use of economic analysis to inform SPS decision-making and indicators to measure SPS performance; an international seminar on climate change and SPS risks; and a workshop on public-private partnerships in support of SPS capacity.1

    The STDF was established by the Food and Agriculture Organization of the United Nations (FAO), the World Organisation for Animal Health (OIE), the World Bank, the World Health Organization and WTO. Representatives of donors and developing countries also participate, alongside ITC, the United Nations Conference on Trade and Development and the United Nations Industrial Development Organization (UNIDO). Part of the STDF's uniqueness lies in its ability to bring together these different partners with their complementary expertise to act as a reference point for coordination and best practice in SPS technical cooperation. The STDF is also closely linked to WTO's SPS Committee, the Aid for Trade Initiative, the Enhanced Integrated Framework and other SPS programmes.

    Case studies

    Strengthening SPS capacity comes with challenges, but also potential benefits and cost-savings as the following examples2 demonstrate.

    CASE STUDY

    Addressing SPS challenges to regain market access

    Benin

    On 11 July 2003, the Government of Benin voluntarily suspended shrimp exports to the European Union (EU). The decision was taken following a visit by inspectors from the European Food and Veterinary Office, which revealed a number of weaknesses in fisheries legislation, inspection and laboratory analysis, as well as serious shortcomings in hygiene practices and sanitary conditions in the shrimp industry. Facing the prospect of a European ban, which would be longer and more expensive to address, the authorities in Benin decided to halt exports themselves.

    The ban had a huge impact on the entire food and agricultural sector and the estimated 300,000 people involved in the labour-intensive sector. Processing factories closed, wholesalers and workers who cleaned and packed shrimp lost their jobs, and fishing communities that depended on shrimp for a living lost their main source of income.

    The public and private sectors worked together to fix the problems with international support provided by the EU, FAO, UNIDO, Belgium and the STDF. The Government invested in inspection systems, training and a new reference laboratory which is expected to be the first in the region to be accredited to international standards. Processing factories upgraded their facilities, workers were educated about good hygiene practices and efforts were made to improve sanitary conditions and enhance knowledge among fishing communities.

    The ban was lifted on 1 February 2005 but it has been extremely difficult since to recover the lost market share. New suppliers in other countries captured Benin's share of the market and the companies that survived remain heavily indebted. In 2008, shrimp exports amounted to only 6 tonnes, compared to 703 tonnes in 2002. Yet, having few other products with significant export potential, the Government and the private sector remain optimistic about increasing shrimp exports. All the stakeholders in Benin agree that access to the international market is crucial to generate economic growth and reduce poverty in the future.

    CASE STUDY

    Avian Influenza

    International guidelines

    Globally, trans-boundary animal diseases are increasing in frequency and severity, disrupting lives, societies and supply chains. In the last decade, the highly pathogenic avian influenza (HPAI) - more commonly known as bird flu - has spread to around 60 countries across the Middle East, Europe, Africa and Asia. The largest and most severe outbreak on record originated in South-East Asia in 2003 resulting in the death of more than 245 people and the culling of more than 300 million birds. By mid-2005, the losses to the poultry industry in the South-East Asian region alone were estimated by the World Bank to be in excess of US$ 10 billion.

    In Thailand, the fourth-largest poultry exporter in the world in 2003, avian influenza quickly became a national crisis and the poultry industry virtually closed down overnight. Small-scale poultry producers went out of business and thousands of workers in the export sector lost their jobs.

    Businesses in Thailand avoided ruin by complying with international standards. Exporters successfully switched from uncooked to cooked poultry exports and complied with OIE standards (see box). Thailand's key trading partners accepted that the measures taken were based on international guidelines and that cooked chicken exports were safe. Exports subsequently rebounded in 2005 and Thailand gradually regained its market share and position as a leading global exporter of poultry.

     

    CASE STUDY

    Controlling fruit fly in fresh fruit exports

    Belize

    In 1987 Belize experienced the consequences of inadequate SPS capacity following an infestation by one of the world's most destructive agricultural pests - the Mediterranean fruit fly (Medfly). In response to the outbreak in the Stann Creek district of southern Belize, authorities in the United States declared the entire country an infested area and ineligible for export. Because of the lack of a national surveillance programme, exports of papaya grown in the central region, where  there was no known occurrence of Medfly, were suspended because there was no way to prove the products were safe. Considerable investments were lost and national plans to diversify into non-traditional agricultural exports were threatened.

    The incident encouraged the Belizean authorities to look for a long-term solution in collaboration with international partners including FAO and the United States Department of Agriculture. A comprehensive surveillance programme was established in 1989, and complementary capacity was developed in eradication and certification. Substantial resources were also invested in the creation of the Belize Agricultural Health Authority which brought together all inspection, quarantine and certification activities related to food safety and animal and plant health.

    These investments yielded considerable benefits and Belize is currently the only country in Central America to be officially recognized as free of Medfly. The quantity and value of papaya exports grew significantly.  The papaya industry now generates some 30 million Belizean dollars (BZ$), or US$ 15 million, in revenue and directly employs more than 1,000 workers. The Government has estimated that spending BZ$ 1 on the Medfly programme generated direct or indirect benefits of up to BZ$ 140. Based on the success with papaya, efforts are under way to expand exports of new commodities such as hot peppers, guava and pitahaya.

    1For more information, see www.standardsfacility.org.
    2These examples are drawn from the STDF film Trading safely, which is available in English, French and Spanish on DVD and on www.standardsfacility.org. Russian, Chinese and Arabic language versions will be available by the start of 2011.


    INTERNATIONAL STANDARDS RECOGNIZED

    In The SPS Agreement

    Referenced by WTO's Agreement on Sanitary and Phytosanitary Measures, OIE standards set out the rules governing international trade in animals and animal products. OIE's Guidelines on Avian Influenza specify that import bans should not be applied to products that have been rendered non-infectious through processing and that they should be lifted once an area is declared free from HPAI for 12 months.

    In terms of food safety, the SPS Agreement recognizes the standards established by the Codex Alimentarius Commission. For plant health, internationally recognized standards are those of the Commission on Phytosanitary Measures of the International Plant Protection Convention.