Post on 15-Jan-2016
Role of Standards in Role of Standards in Kenya’s Horticulture Kenya’s Horticulture
SectorSector
Spencer HensonSpencer Henson
University of GuelphUniversity of Guelph
CanadaCanada
Key Messages….Key Messages….
Standards continually evolve over timeStandards continually evolve over time Collective impact of standardsCollective impact of standards Interaction between public and private Interaction between public and private
standardsstandards Need to consider impact of standards Need to consider impact of standards
in the wider contextin the wider context Standards can be a threat to Standards can be a threat to
established supply chainsestablished supply chains Standards can create strategic Standards can create strategic
opportunitiesopportunities
OutlineOutline ContextContext Kenyan fresh produce exportsKenyan fresh produce exports Standards regime:Standards regime:
European UnionEuropean Union Compliance strategies:Compliance strategies:
Public sectorPublic sector Private sectorPrivate sector
Strategic responsesStrategic responses ConclusionsConclusions
ContextContext
Trends in agricultural exports:Trends in agricultural exports: Shift from basic commoditiesShift from basic commodities Export diversificationExport diversification
Increase in exports of fruit and Increase in exports of fruit and vegetablesvegetables
Increased role of non-traditional cropsIncreased role of non-traditional crops Linked to contract production:Linked to contract production:
Large-scaleLarge-scale Small-scaleSmall-scale
Average Annual Growth Rates Average Annual Growth Rates for EU Imports of vegetables, for EU Imports of vegetables,
1990-20001990-2000VegetableVegetable Total ImportsTotal Imports Imports from Imports from
Third Third CountriesCountries
TomatoesTomatoes 3.03.0 1.41.4
CarrotsCarrots 2.42.4 0.20.2
PotatoesPotatoes 1.01.0 -1.9-1.9
OnionsOnions -0.4-0.4 0.30.3
Green peasGreen peas 9.89.8 11.111.1
Green Green chillies/Pepperschillies/Peppers
5.45.4 7.27.2
Green beansGreen beans 5.25.2 8.68.6
‘‘Minor’ vegetablesMinor’ vegetables 2.52.5 4.84.8
ContextContext
Trends in agricultural exports:Trends in agricultural exports: Shift from basic commoditiesShift from basic commodities Export diversificationExport diversification
Increase in exports of fruit and Increase in exports of fruit and vegetablesvegetables
Increased role of non-traditional cropsIncreased role of non-traditional crops Linked to contract production:Linked to contract production:
Large-scaleLarge-scale Small-scaleSmall-scale
Kenyan Exports of Horticultural Kenyan Exports of Horticultural and Floricultural Products, 1980-and Floricultural Products, 1980-
20022002
0
50000
100000
150000
200000
250000
300000
3500001980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
US$ '000
Kenyan Exports of Horticultural Kenyan Exports of Horticultural and Floricultural Products, 1980-and Floricultural Products, 1980-
20022002
0
50,000
100,000
150,000
200,0001980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
US$'0
00
Other fresh/ processed fruit & vegetablesCut flowersCanned pineapple
EU Imports of Green Beans, EU Imports of Green Beans, 1986-20001986-2000
0
20,000
40,000
60,000
80,000
100,000
120,0001986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Tonnes
Intra-EU Trade Imports From Third Countries
Evolution of Kenyan Fresh Evolution of Kenyan Fresh Vegetable ExportsVegetable Exports
Up-market off-season vegetablesUp-market off-season vegetables
Asian vegetablesAsian vegetables
Non-traditional vegetablesNon-traditional vegetables
Prepared productsPrepared products
Drivers of Change in the Drivers of Change in the Kenyan Fresh Vegetable Kenyan Fresh Vegetable
Export SectorExport SectorPushPush
Transport costsTransport costs Decline in marginsDecline in margins Increased supply-baseIncreased supply-base Supply chain Supply chain
consolidationconsolidation
PullPull Novel productsNovel products Value-added Value-added
productsproducts Supply continuitySupply continuity Quality standardsQuality standards Supply standardsSupply standards
Comparative Freight Rates for Comparative Freight Rates for Fresh Green Bean Exports, Fresh Green Bean Exports,
20032003
0
0.5
1
1.5
2
Morocco Senegal Egypt Kenya Zambia
US$/K
g
Drivers of Change in the Drivers of Change in the Kenyan Fresh Vegetable Kenyan Fresh Vegetable
Export SectorExport SectorPushPush
Transport costsTransport costs Decline in marginsDecline in margins Increased supply-baseIncreased supply-base Supply chain Supply chain
consolidationconsolidation
PullPull Novel productsNovel products Value-added Value-added
productsproducts Supply continuitySupply continuity Quality standardsQuality standards Supply standardsSupply standards
Standards on Fresh Vegetable Standards on Fresh Vegetable Exports to the European UnionExports to the European Union
StandardStandard PublicPublic PrivatePrivate
PhytosanitaryPhytosanitary XX
HACCPHACCP XX
Microbial Microbial contaminationcontamination
XX
TraceabilityTraceability XX
Good agricultural Good agricultural practicepractice
XX XX
Pesticide residuesPesticide residues XX XX
Social welfareSocial welfare XX
Quality gradesQuality grades XX XX
Evolution of Hygiene Evolution of Hygiene Standards in the UKStandards in the UK
UK Food Safety Act 1990UK Food Safety Act 1990
Private hygiene standardsPrivate hygiene standards
Collective retailer hygiene standardsCollective retailer hygiene standards
Third party certificationThird party certification
Evolution of EU Standards Evolution of EU Standards on Pesticideson Pesticides
Predominantly Member State controlsPredominantly Member State controls
Evaluation of existing approved pesticidesEvaluation of existing approved pesticides
Establishment of Maximum Residue LevelsEstablishment of Maximum Residue Levels
Good Agricultural Practice standardsGood Agricultural Practice standards
Evolution of EU Phytosanitary Evolution of EU Phytosanitary StandardsStandards
Member State controlsMember State controls
Notification pestsNotification pests
Rapid alert systemRapid alert system
Border inspectionBorder inspection
Approved Third Country authoritiesApproved Third Country authorities
Evolution of EU Quality GradesEvolution of EU Quality Grades
Limited EU gradesLimited EU grades
Private quality standardsPrivate quality standards
Certificate of conformityCertificate of conformity
Third Country approved authorityThird Country approved authority
Enforcement RegimesEnforcement Regimes
Border inspectionBorder inspection SurveillanceSurveillance Regulatory actionsRegulatory actions Private inspectionPrivate inspection Third party certificationThird party certification
Stringency of SPS Requirements Stringency of SPS Requirements for Fresh vegetables in Alternative for Fresh vegetables in Alternative
MarketsMarkets
0
25
50
75
100
UK
superm
ark
et
Aust
ralia/
N
ew
Zeala
nd
UK
whole
sale
mark
et
Conti
nenta
lEuro
pe
Mid
dle
East
Challenge Facing Fresh Challenge Facing Fresh Vegetable ExportersVegetable Exporters
ComplianceCompliance
Control Control MechanismsMechanisms
CostCost
Compliance Strategies:Compliance Strategies:Public SectorPublic Sector
Phytosanitary surveillancePhytosanitary surveillance Plant health certificationPlant health certification National standardNational standard
Compliance Strategies:Compliance Strategies:Private SectorPrivate Sector
Industry code of practiceIndustry code of practice Development of human capitalDevelopment of human capital Facility developmentFacility development Backwards integrationBackwards integration Intensified extensionIntensified extension Out-grower control systemsOut-grower control systems
Supply-Base for Fresh Supply-Base for Fresh Vegetable Exports from Kenya, Vegetable Exports from Kenya,
20022002
Exporter farms
Small-scale out-growers
Medium-scale outgrowers
Large-scale out-growers
Role of Small Producers in Kenyan Role of Small Producers in Kenyan Exports of Fresh VegetablesExports of Fresh Vegetables
0
10
20
30
40
50
1980 2000
% e
xport
s
Compliance Strategies:Compliance Strategies:Private SectorPrivate Sector
Industry code of practiceIndustry code of practice Development of human capitalDevelopment of human capital Facility developmentFacility development Backwards integrationBackwards integration Intensified extensionIntensified extension Out-grower control systemsOut-grower control systems
Off-Setting ResponsesOff-Setting Responses
IntegrationIntegration Premium markets:Premium markets:
CountriesCountries CustomersCustomers
Value-additionValue-addition Crop diversificationCrop diversification
Kenyan Exports of Fresh Kenyan Exports of Fresh Vegetables by Destination, 1990 Vegetables by Destination, 1990
and 2002and 2002
0
10
20
30
40
50
UK
superm
arkets
UK w
holesale
UK A
sianveg
etables
Contin
ental
Euro
pe
Australia./N
ewZelan
d
%
1990 2002
Very High Medium LowLow High
Off-Setting ResponsesOff-Setting Responses
IntegrationIntegration Premium markets:Premium markets:
CountriesCountries CustomersCustomers
Value-additionValue-addition Crop diversificationCrop diversification
Kenyan Exports of High-Care Kenyan Exports of High-Care Prepared Vegetables, 1997-Prepared Vegetables, 1997-
20022002
0
1000
2000
3000
4000
5000
1997 1998 1999 2000 2001 2002
Tonnes
Off-Setting ResponsesOff-Setting Responses
IntegrationIntegration Premium markets:Premium markets:
CountriesCountries CustomersCustomers
Value-additionValue-addition Crop diversificationCrop diversification
Kenya Exports of Fresh Beans Kenya Exports of Fresh Beans and Peas, 1991-2002and Peas, 1991-2002
0
5,000
10,000
15,000
20,0001991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Tonnes
French beans Runner beans Snow peasSnap peas Garden peas
ConclusionsConclusions
Kenya faced a range of public and Kenya faced a range of public and private standardsprivate standards
Standards evolve within existing Standards evolve within existing challenging business environmentchallenging business environment
Response to standards largely within Response to standards largely within private sectorprivate sector
Standards used as a means to strategic Standards used as a means to strategic gaingain
Challenges for small-scale sectorChallenges for small-scale sector