Consumer Assurance and sutainability of SH citrus supply in the EU

Opening remarks

Philippe Binard

Brussels – 2 October 2012

Opening remarks

• Welcome and introduction of delegates

• Background to the meeting : Consumer Assurance and sustainability of citrus SH supply into the EU

• Intitiative driven under the leadership of – CGA

– AFINOA/FERDERCITRUS

• Meeting with a « citrus focus » but focus could be extended to a broad fresh produce spectrum

• Sequence of the day

– Morning session on citrus sustainability ( 10h00-12h20)

– Lunch break ( 12h20- 13h00

– Afternoon session on lessons learn for QAC ( 13h0017h00 )

Opening remarks • Agenda :

– Introduction remarks ( 30 min ) • Supply of SH citrus into the EU ( Philippe Binard )

• Understanding the main concerns of the retailers ( Paul Hardman )

• Questions

– Providing consumers assurance – MRL ( 60 min ) • Key challenges ( Gloria Perez )

• GAP approach ( Vaughan Hattingh )

• Residue testing approach (Vaughan Hattingh )

• Discussion

– Providing consumers assurance – Climate change /carbon footprint/ethical trade ( 30 min)

• Perspective from Argentina ( Gloria Perez)

• Perspective from South Africa ( Paul Hardman )

• Discussion

– Closure - recommendations and waty forward

Introduction

• Meeting taking place on a background of New legislation for active substances

New legislation on MRL

New legislation on sustainable use of pesticides

Proliferation of private standards

NGO protagonisms

Increase role of laboratory

Renew concerned by EU on plant health regulation lack of compliance and its compatibility with stricter AS/MRL legislation

Introduction • but also on a background of

exposure to grey area of legislation

risk of food safety

SHAFFE position paper on engaging with stakeholders

increase efforts of suppliers to adhere to even stricter food safety legislation

Perception chemical contaminants

Source: Eurobarometer on food-related risks 2010

Consumer concerns regarding pesticide residues on F&V

Facts

Source: EFSA EU Pesticide residue report covering 2009

Southern Hemisphere Supply of Citrus into Northern Europe

2011 figures

Source: SHAFFE 2011

Setting the scene for citrus

EU import by origin Country 2009 2010 2011

Costa Rica 1.498.799 1.603.523 1.681.835Ecuador 1.383.568 1.312.670 1.428.003Colombia 1.249.950 1.213.347 1.202.715South Africa 1.098.248 1.127.273 998.549Morocco 885.481 833.381 852.670Turkey 903.795 864.319 777.976Chile 700.810 624.093 621.171Argentina 637.060 555.365 552.723Brazil 575.156 577.740 504.167New Zealand 420.000 380.702 376.621

Other countries 3.649.256 3.860.591 3.680.630

TOTAL 13.002.122 12.953.006 12.677.058

CITRUS VALUE Argentina South Africa

Total citrus 181.876.522 € 344.131.224 €

out of which

Oranges 44.748.040 € 188.311.072 €

Lemons 107.914.499 € 35.314.745 €

Soft citrus 22.946.313 € 51.411.062 €

Grapefruit 6.069.964 € 67.792.943 €

82%

10%

7% 1%

Orange

South Africa Argentina Uruguay Chile Australia Peru

68%

28%

3% 1% 0% 0%

Lemon

Argentina South Africa Uruguay Chile Australia Peru

5%

95%

Grapefruit

Argentina Australia Chile Peru South Africa Uruguay

30%

27%

27%

15%

1% 0%

Soft Citrus

South Africa Argentina Peru Uruguay Chile Australia

70%

20%

6% 3% 1% 0%

All Citrus

South Africa Argentina Uruguay Peru Chile Australia

31%

27%

23%

5%

4%

4%

3% 2%

1% 0% 0% 0%

Arg Markets

Southern Europe Northern Europe Russia South East Asia

Eastern Europe UK Middle East Canada

China Other Japan USA

25%

20%

13%

11%

9%

8%

5%

3% 3% 1% 1% 1%

SA Markets

Northern Europe Middle East Russia South East Asia

UK Southern Europe Japan USA

Canada Other Eastern Europe China

0

50000

100000

150000

200000

250000

300000

350000

400000

Canada China Eastern Europe

Japan Middle East Northern Europe

Other (Africa)

Russia South East Asia

Southern Europe

UK USA

EXPORTACIONES DE FRUTAS CITRICAS FRESCAS TEMPORADA 2011 EN TONELADAS

ARGENTINA VS SOUTH AFRICA POR REGION

SOUTH AFRICA ARG FUENTE: SHAFFE 2011

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

Oranges Mandarins Lemons Grapefruit

SOUTH AFRICA 2011 EN TONS

PRODUCCION EXPORTACION

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

Oranges Mandarins Lemons Grapefruit

ARGENTINA 2011 EN TONS

PRODUCCION EXPORTACION

21 10/11/2012

Understanding the main concerns of the retailers

Paul Hardman Industry Affairs Manager

Citrus Growers Association of Southern Africa Brussels 2nd October 2012

Sustainability of Citrus Supply

10/11/2012 22

Brand Management

• Significant investment in brands

• Brands are competing – now more than ever!

• Fruit & Vegetable category leads consumers regarding where to shop – Loss of fruit & vegetables PLUS loss in sales of

other goods

– When fruit & vegetables department image is damaged then BRAND image is damaged

10/11/2012 23

Issue Management

• Publicity on pesticide residues lead retailers to take radical action

• Most often retailers do not have the “know-how” to deal with the issues technically

• Therefore they react in the interest of Brand protection, rather than an optimum solution for the entire supply chain

• This leads to uncertainty (risk) for others in the supply chain

10/11/2012 24

What has changed in the last 2 years

• Economics of sending fruit into the EU – No buffer for mistakes – Other markets are becoming more important

• Changes in the enforcement of EU phytosanitary regulations

• New pests of phytosanitary significance • Emerging evidence:

– Imazalil resistance – Producers returning to the use of older chemistry

• Other retailers starting to follow the German retailers regarding residue management approach

10/11/2012 25

What has changed in the last 2 years

• Consumer demands for “sustainability” • Technology changes

– Residue testing techniques

• Modes of transport have changed towards containerization

• More risk in the supply chain than before – Ability to comply is changing

• Real solutions have been developed to come to retailers with a suite of consumer issues

10/11/2012 26

Balancing brand vs GAP management

• Today we are trying to find answers to this question of balance

• We believe the answer lies in finding a technical solution – This creates certainty in the supply chain – This addresses real sustainability issues – Elevating pesticide residues in the context of brand

management is not constructive – No residues means no fruit – Alignment of objectives (NGOs, retailers, importers,

exporters, growers)

27 10/11/2012

Consumer Assurance and Sustainability of the Southern Hemisphere citrus supply

into the EU

Brussels, October 2nd 2012

Eng. Gloria C. Perez Technical manager

69,95%

48,40%

4,73%

29,62%

0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00%

Limón / Lemon

Manadarina / Mandarin

Naranja / Orange

Pomelo / Grapefruit

Production Argentina / Southern Hemisphere

51,72%

44,47%

11,79%

4,33%

0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00%

Limón / Lemon

Manadarina / Mandarin

Naranja / Orange

Pomelo / Grapefruit

Exportaciones Argentinas / Southern Hemisphere

10/11/2012 31

Key Challenges

• We have to ensure sustainable systems

• We define sustainability as a skill to achieve productive and economic sustained prosperity, protecting at the same time the natural systems of the planet.

10/11/2012 32

In order to achieve sustainability, we need to consider the role of:

• Producers/Exporters • Importers

•Consumers

Our goal: to bring the consumer high quality fruit and fruit safety.

10/11/2012 33

Producers

• They work with responsibility to achieve more production and high quality fruit

• They use IPM, coordinating their tasks to reach a proper sanitary management with as little use of pesticides as possible, choosing those with less toxicity and protecting the environment

• Exporters : They choose the best fruit and get them ready for markets in proper shape as regards phytosanitary conditions and food safety. These conditions enable them to deal with long trips and times of distribution.

• Producers + Exporters : Work together fulfilling the demands of country of origin and the country of destination.

• Retailers :They carry out the connection between exporters and consumers ensuring high quality and food safety.

10/11/2012 35

Troubles of Producers and Exporters

• MRLs • Reduction of quantity of active principles • Lack of interest of enterprises to register active • PRIVATE STANDARS • Stakeholders demand reduction in the amount of active

substances. • Stakeholders demand lower active substances • Lack of inclusion of Active substances in Annex I of

91/414/EC which determines a detection limit : BANNING .

10/11/2012 36

MRLs should not be reduced. WHY ??

• They are set taking into account the needs to control pest and diseases.

• The reduction of the MRLs reduce the control over pest and diseases bringing about of biosecurity in the country of destination or the development of resistance to pesticides.

• The reduction of the number of active principles does not guarantee control.

• No more demands are necessary.

10/11/2012 37

Why more demands if…

• MRLs are established according to scientific standards established by food safety.

• MRLs are sufficient guarantee that food consumed is safe and does not harm health. So, they should be accepted without private demands which limit them as regards quantity or maximum number of substances.

• Their determination considers dietary habits and Safety indicators, so, no other additional limits are necessary (ARfD).

• It is necessary to base our work on harmonized demands within EU.

• We should not forget that :

• IT IS THE FRUIT THAT GENERATES MOVEMENT AND TRADE

• Let us work together in harmony to be able to address these challenges so that we can get on with providing good quality and safe fruit to consumers.

10/11/2012 39

Thanks for your attention

Gloria C. Perez gperez@afinoa.org.ar

Providing Consumer Assurance Pesticides Residues

Vaughan Hattingh Citrus Research International

Stellenbosch University South Africa

Do producers, importers & retailers have common objectives?

Pursuit of sustainability ……√ Profitability throughout value chain ……√

Minimise environmental impact……√

Worker safety and welfare……√

Consumer welfare……√

Consumer assurance……√

How best to marry positions? It is important to understand what we have to work with

Is commercial citrus production currently feasible without reliance on PPP …… Does that mean we stop pursuing reduced PPP reliance…… What is then achievable and what not?

Arthropod pests (eg. Fruit flies) Plant diseases (eg. Citrus Black Spot) Post harvest waste (eg. Imazalil)

PPP are with us for the foreseeable future

Understand the PPP development, usage authorisation & MRL setting process

How best to accommodate PPP in terms of consumer assurance?

What does this development & authorisation process look like?

Since 1970s focus on developing products with minimum environmental impact, high specificity & minimum mammalian toxicity (€ Billions PPP development, with huge advances)

GAP forms the basis of usage authorisation process

MRLs are reflective of the GAP (NB ═ science based food safety assurance, but not necessarily a safety threshold)

So what does the MRL tell us?

A science-based, internationally applicable, obligatory legal compliance, assurance of use in accordance with GAP

Even excedence, although not legal, is not necessarily a food safety concern

MRL compliance provides manageable and defendable

assurance

What are the problematic demands from retailers?

Limiting residue levels to a proportion (50%) of the MRL Unrealistically limiting the number of active ingredient

residues Using the AfRD (acute reference dose) and a proportion

thereof as a residue tolerance (A most unrealistic expectation for growers to comply with, given the expertise one needs to access the information and apply it, not to mention the inappropriate application)

Why is this so problematic? 1 In many cases compliance is a guarantee that GAP HAS NOT

been followed (≠ ASSURANCE)

Undermines IPM & drives preventative (unnecessary) use of the older (more hazardous) broad spectrum chemistry

(≠ ASSURANCE, ≠ SUSTAINABLE)

Under-dosing drives RESISTANCE development (≠ SUSTAINABLE)

Undermines ability to effectively manage post-harvest waste through decay (costs, quality & consumer perception) (≠ ASSURANCE,

≠ SUSTAINABLE)

Why is this so problematic? 2

Increased costs of testing (against a moving target) & costs of rejection through unforeseen non-compliance

(≠ SUSTAINABLE)

Introduces heightened compliance unpredictability, both through testing variability & absence of GAP based usage guidelines (≠ ASSURANCE)

Neutralises the value (environmental impact, worker safety & reduced toxicity) of € billions PPP development & is a disincentive to further advances (≠ ASSURANCE,

≠ SUSTAINABLE)

Why is this so problematic? 3

Undermines confidence in science based legal MRLs (≠ ASSURANCE)

Jeopardises Market Access by undermining ability to meet phytosanitary import regulations, eg. CBS

(═ inability to supply ≠ SUSTAINABLE)

Creates consumer perception that fresh produce is risky (≠ ASSURANCE)

Why is this so problematic? 4

Minimising environmental impact

Profitability

Consumer confidence (assurance)

Worker safety & welfare

COMPLETELY COUNTER-PRODUCTIVE TO SHARED OBJECTIVES OF:

Sustainability

═ counter-productive initiative

How to change the tide?

Revert to GAP based reliable residue assurance systems whereby:

Communicate through the value chain to re-direct before major damage is done

RUR ═ excellent risk management tool that can be (and has been) incorporated into assurance schemes, including Global GAP

MRLs are the compliance target

IPM scoring systems?

What are the incentives?

Enables meaningful consumer assurance

Removes uncertainty & enables risk management throughout the value chain

Enables role players to re-direct their focus to pursuit of sustainability & other constructive consumer assurance topics that can constructively be used in Brand management

What are some of these other assurance topics?

Climate change

Ethical trade

Sustainability

54 10/11/2012

Pesticide Residues Discussion

55 10/11/2012

Providing consumer assurance

Brussels, October 2nd 2012

Eng. Gloria C. Perez Technical manager

10/11/2012 56

Traceability

• This methodology allows us to know exactly the movement of our fruit from the countryside to the destiny in EU

57 10/11/2012

REGISTRATION

HARVOUR

PACKING

LAND

HARVEST

EU

• Producer, Land, UPs. • Citrus Packers / Packing Company. • Citrus Exporter. •The information of the registration is a sworn statment handed to and evaluated by Phytosanitary authorities

• Identify the land. • Identify the

UPs.(Production Units) • Taking notes about

your land´s progress

• Identity bins. • Issue a dispatch note. • Take notes about your land´s progress

•Fill process data sheets. •Identify the cases/boxes. •Identify the pallets. •Complete a form (DTC)

Proper steps to ensure traceability

• Reading of Citrical Transit Document (DTC). • Backup audit • Phytosanitary Certificate (CF).

• The Phytosanitary Certificate will be checked.

Traceability Control Points

Registration 1 TCP

Producer

Land

UP s

Citrus Packers / Packing Company

Citrus Exporter

Land 2 TCP Land

UP s

Harvest 3 TCP Harvest bins

Dispatch note

Packing

4 TCP When fresh fruit is in the packing, and also is dump.

5 TCP During the process

6 TCP Above cases/boxes and pallets

7 TCP At time to make a typically ship

Harvour

8 TCP Lectura de ingreso al puerto / First harvour check-in

9 TCP Lectura de preembarque / Second pre-shipment check-in

10 TCP Respaldatorio

EU 11 TCP

At the moment of cross-check The Phytosanitary Certificate

10/11/2012 59

• Phytosanitary authorities in EU allow this system of traceability as a phytosanitary guarantee of our fruit

• It has been audited several times and is accepted by its credibility that guarantees phytosanitary conditions

• We use the same scheme with the rest of the present Certifications : Global Gap, Ethical Trades, etc.

10/11/2012 60

We have also assurance certification for lemons ALL LEMONS

• ALL LEMON – “Tested & Certified for Export” is the Argentine seal of quality to export lemons created in 2010 as an initiative of major companies producing, packing and exporting Argentine lemons, especially Tucumán which is the main producer of lemons in the world (one more example of traceability and food safety).

• The objective of ALL LEMON is standardize and homogenize the quality of lemons of export

10/11/2012 61

Thanks for your attention

Gloria C. Perez gperez@afinoa.org.ar

Alternative Consumer Assurance: Southern African Perspective

Paul Hardman

Industry Affairs Manager

Citrus Growers Association of Southern Africa Brussels, 2nd October 2012

10/11/2012 63

Fruit South Africa Ethical Trade Programme

10/11/2012 64

Who is Fruit South Africa?

• Deciduous

• Citrus

• Subtropical

• Table Grapes

• Exporters

• 5000 farms; 200 000 employees

10/11/2012 65

Background

• 2008 – Strategic decision to be proactive - drive own ethical trade

programme – Concerns of duplication of audits / no exchange of

information – Tesco Ethical Trade Programme implemented – FSA establishes ET Programme, appoints ET coordinator

• 2009 – NAMC approached regarding Multi-stakeholder forum – Audits based on ETI Base Code and SMETA ongoing – Between 2009 and 2011

• over 600 ethical audits • 700 sites received training

10/11/2012 66

Background

• 2010

– Fruit industry workshop – endorses use of GSCP as platform for way forward

• 2011

– October 2011 – FSA Ethical Programme launch (SIZA)

• 2012

– August – GSCP Equivalence process completed for Standard and Audit Process and Methodology

10/11/2012 67

Needs and Goals

• Internationally and nationally recognised assurance process

• Development-led not audit-led – Continuous improvement

• Data-system to provide accurate information (trends, profiles); support self-regulation

• Choice of service providers • Programme must engage with all stakeholders • One audit recognised by all – no duplication

10/11/2012 68

SIZA

Sustainability Initiative of South Africa

10/11/2012 69

Oversight

• FSA Board to manage

• Commitment to National MSF

– CONSAWU

– Government (Department of Labour , DAFF)

– Other industries

• Global Social Compliance Initiative – Benchmarked Code

– Benchmarked methodology

10/11/2012 70

Where are we now?

• September 2012 –trial audits – test audit documentation • Data platform developed • Capture SAQ and audit results

– provide updated information (trends/ profiles/emerging issues) – tracks and records progress; – important risk management tool

• Resources developed – Ethical Trading Handbook – Workplace Communication Toolkit – Website: www.fruitsa-ethical.org.za

• Engagement and collaboration – CONSAWU; – government – Industry Complaints’ Protocol

10/11/2012 71

Plans for 2012/2013

• Covert SIZA into Not-for-profit company • Grow membership of SIZA – self-sustaining in year 3 • Self-audits and audits implemented against SIZA

Standard • Resources to drive continuous improvement

(capacity-building) • Data-system in place supports self-regulation • Engagement with stakeholders (government, labour,

NGOs) • Implement communication strategy

THANK YOU

10/11/2012 73

Introduction to Confronting Climate Change

Paul Hardman Industry Affairs Manager Citrus Growers Association of Southern Africa

10/11/2012 74

What the project is...

Providing a platform for knowledge sharing, training and a

carbon calculator tool for the industry to measure and

catalyse a shift towards energy efficiency and sustainable resource management.

Developed for the industry by the industry

SAAPPA SASPA

CGA

10/11/2012 75

What the project is... Phase 1 initiated in 2008 to 2011 Driven by the need to better understand CC impacts at an industry & individual level

50% funded by DFID (UK development fund) & 50% industry bodies

Phase 2 runs from 2012 - 2014 80% industry bodies funding, 20% local Department of Agriculture

Main goal to improve uptake of the tool, data integrity and industry benchmark figures

The backbone of the project is: The website information platform & the freely available online carbon calculator tool

The support of the expert team to assist the industry with technical queries

The continued feedback from the industry users which enhances the user-ability of the tool

SAAPPA SASPA

CGA

76 10/11/2012

•Sound methodology – based on the PAS2050-1:2012 •Expertly reviewed •Annually updated to maintain relevancy & alignment with best practice •The end goal: to have an easy-to-use but scientifically robust tool that the industry can use to measure & monitor progress over time •To have accurate data to feed in to industry benchmark analysis

The foundation of the CCC tool...

77 10/11/2012

•The ability to use ONE TOOL to get accurate results per section of the supply chain.

•Results from each section of the chain can be added together to build the full picture.

•This process encourages collaboration within the industry & supply chain

•Utilizing the existing 4 years of industry awareness, support & technical training

What makes it unique...

The ACCURATE full view of the supply chain

Packhouse

Distribution/Logistics

SA Port

78 10/11/2012

Carbon footprint report

Baseline – starting point

Highlighting energy/carbon intensive activities where reduction strategies will have most impact

What are the outputs... Individual

0

0,1

0,2

0,3

0,4

0,5

0 1 2 3 4 Kg

Co2

e pe

r Kg

frui

t del

. to

Pack

hous

e

Farm - Stonefruit

Industry

Regional benchmark results

Showcase industry trends & highlight best practice

Encourages collaboration within industry to share lessons learnt & reduce where possible

Based on accurate & scientifically sound data

79 10/11/2012

•It’s all about the DATA! •Getting the data is the hardest part – •Level of technical support required is vital for success •Data quality and availability dictates inclusions of the assessment (for example soil carbon & sequestration is currently excluded due to lack of accurate data) •Data quality control necessary for industry benchmark analysis results to be representative & meaningful. •User-friendliness – incorporate feedback to enhance mechanics & user interface (make the tool do all the hard work – user provides activity data)

Lessons learnt...

80 10/11/2012

•A call for collaboration with retailers

•Use an existing and well supported system to feed in to your systems

What’s the next step...

10/11/2012 81

Find out more:

www.climatefruitandwine.co.za

THANK YOU for your time.... We value your time & input and look forward to working together with you on this journey. Contact details: Presenters details: Shelly Fuller (project manager) shelly@climatefruitandwine.co.za

82 10/11/2012

Consumer Consumer Alternatives Discussion

10/11/2012 83

Key outcomes of this discussion

• The South African and Argentina citrus industries, with partners along the supply chain, are seeking to make the southern hemisphere supply chain more sustainable by: – Reducing risk along the supply chain for all parties

– Adopting “true” sustainability

– Promoting Good Agricultural Practice

– Promoting traceability, high levels of worker welfare and protection of the environment.