EU Food Rules Test African Development

New food safety regulations, implemented by the European Union (EU), will make it mandatory "for all fruit and vegetable products arriving in the EU to be traceable at all stages of production, processing and distribution." These new regulations are intended to ensure against potential public health scares such as the mad cow disease that have plagued the EU in recent years. Yet, the regulations pose new challenges and indeed financial hardships on the small agricultural workers in African nations such as Kenya that supply agricultural produce to the EU. Horticulture is one of Kenya's leading hard currency earners, second only to tea exports. The horticulture industry consists of mostly small-scale farms that can ill afford the cost of compliance. According to this article, most international development agencies perceive the small scale production of export crops as being central to poverty reduction globally. Given this reality, say some critics of the new regulations, the EU should help cover the costs of compliance to help poor countries like Kenya stay afloat in the increasingly competitive global market. –YaleGlobal

EU Food Rules Test African Development

William Wallis
Tuesday, April 6, 2004

Purity Gashamba lives up to her name. Her seven acres of fine, green beans on the plains beneath Mount Kenya are meticulously sprayed with pesticides.

She is building toilets near her fields and she will have grading sheds to sort the harvest, where employees will wear dust-proof overalls and hats. On reaching the European market, every bean she grows will be traceable back to the seed it came from and the plot where it was planted.

The reason for all this is new food safety regulations due to come into force in the European Union in January 2005. These will make it mandatory for all fruit and vegetable products arriving in the EU to be traceable at all stages of production, processing and distribution.

Ms Gashamba is ready to conform with the regulations. But judging from her neighbours' smaller plots and their limited awareness of the rules, she could be one of only a few small-scale farmers in Kimbimbi, home of Kenya's green bean crop, that are able to comply.

Across the developing world, peasant farmers who grow fruit and vegetables for European markets are facing difficult times - even possible ruin. In the wake of mad cow disease and other scares, European authorities demand ever tighter food quality controls.

A bewildering array of these already apply. There are more than a dozen quality standards across the EU, usually set up and monitored by the trade. A few boxes of dodgy beans, with higher than permitted residues of chemicals, can affect the reputation of an entire country's crop.

For poor countries like Kenya, the question is whether the regulations, or non-tariff barriers, are becoming incompatible with the vision of development that sees small-scale production of export crops as central to poverty reduction.

Ms Gashamba says it will cost her the equivalent of €1500 ($1800) to comply with new EU traceability laws. Her harvest is just large enough to afford this - provided competition from countries such as Morocco and Senegal, which enjoy easier access to Europe, does not add pressure to her margins. She sells to an efficient and cash flush exporter who has helped her with loans. She is also literate and therefore able to understand the instructions on pesticide packets and can provide a record of how her crop was grown.

Simon Ethangatta, a former chairman of the Fresh Produce Exporters Association of Kenya (FPEAK), believes many Kenyan peasants who have moved from subsistence farming to cash crops, are not so lucky.

The horticultural industry has provided Kenya with rare success in the last decade. Since 1995, when the economy was in decline, fruit, flower and vegetable exports increased by 70 per cent, driven by the private sector and overtaking tourism as the country's number two hard currency earner after tea. Large-scale agro-industries employ about 500,000 Kenyans, while there are as many as 2m outgrowers, labourers and brokers in the informal sector. The area most threatened by EU regulations provides most jobs.

"If no solution is found, it is obvious that the country will lose 60 per cent of the foreign exchange earned from the sale of vegetables and 90 per cent of the proceeds from fruit," Mr Ethangatta has warned.

His peers are not all so pessimistic. Sicily Kariuki, the current director of the FPEAK, says exporters are doing everything they can to comply. But she argues that EU assistance is inadequate and often poorly tailored.

The EU has provided training for exporters and technicians through its Pesticide Initiatives Programme. But it has received only €30m, spread across 77 African, Caribbean and Pacific states. There is no support to meet the infrastructure costs of compliance. "The political and social implications of [the laws] are potentially quite huge," says Mrs Kariuki. "It is not because what we are being asked to do is un-doable. It's more in terms of the investment."

Richard Fox, managing director of Homegrown, Kenya's largest fresh produce exporter, says his company farms already apply most of the new regulations, as do the 700 outgrowers from whom he buys.

But the managing director of another company, which supplies mangoes, beans and passion fruit to the UK, France and Italy, said meeting requirements to access EU supermarkets was adding 60 per cent to his overheads. He is half-way there, but has run out of funds. "We want to comply but we require more help and time." Without it he says his family business, which provides 120 jobs, will go bust next year.

© Copyright The Financial Times Ltd 2004.