___________________________________________________________________________

2008/SOM3/SCSC/CONF/036

The Use of Standards and Its Impact on the Agribusiness Sector: The Peruvian Experience

Submitted by: Peru

7th Conference on Standards and ConformanceCusco, Peru

10-11 August 2008

The use of standards and its impact in the agribusiness sector: The Peruvian experience

Mr. Augusto MelloTechnical Secretary

Technical and Commercial Regulations Commission

SUCCESSFUL EXPERIENCE

Peru is a world leader in asparagus

• World’s leading exporter of asparagus

• World’s leading exporter of fresh asparagus

• World’s 2nd largest exporter of canned asparagus

• World’s 2nd largest producer: 27,000 Ha (Census 2008)

• Highest yield in the world

• In 2008 asparagus was appointed as an emblematic Peruvian product (ProductoBandera)

• Asparagus industry generates jobs for 60,000 people, half of which are women

Peru is competitive in yield per Ha.

0

2,000

4,000

6,000

8,000

10,000

12,000

Kg/

Ha

Average Yields

PeruNetherlandsAustraliaChinaChileGreeceU.S.MexicoSpainWorld

Source: USDA FAS Peru 2007

Agro exports – 2007Main Products (US$ Million)

Source: MINAG/SUNAT

Position Products Volume Valor Particip. Particip.1000 TM Mil US$ Valor FOB acumulada

2,1851 Green coffee 174 427 19.5%2 Fresh Asparagus 96 236 10.8% 30.3%3 Canned Asparagus 59 156 7.1% 37.5%4 Evaporated Milk 51 65 3.0% 40.4%5 Artichoke 29 64 2.9% 43.4%6 Fresh mangoes 82 63 2.9% 46.3%7 Paprika chili 23 56 2.6% 48.9%8 Wood 40 55 2.5% 51.4%9 Fresh grapes 26 55 2.5% 53.9%

10 Avocados 38 47 2.2% 56.0%11 Animal feed for preparation 73 45 2.1% 58.1%12 Fine Fiber 3 33 1.5% 59.6%13 Bananas 65 31 1.4% 61.1%14 Piquillo pepper 17 31 1.4% 62.5%15 Frozen Asparagus 12 30 1.4% 63.9%

Subtotal 1,396 63.9%

Beginning of Standardsdevelopment

Peru: Asparagus Exports (US $ FOB 1998-2007)

050,000,000

100,000,000150,000,000200,000,000250,000,000300,000,000350,000,000400,000,000450,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

US$

Source: SUNAT / ADEX Prepared by: Inform@ccion

VALUE (US$) 1998 2006 2007 Part % 98 Part % 07 Var % (98-07) Var % (06-07)FRESH $35.70 $187.00 $235.10 28% 56% 559% 26%CANNED $77.80 $104.30 $154.30 61% 37% 98% 48%FROZEN $14.10 $26.60 $30.20 11% 7% 114% 14%TOTAL $127.60 $317.90 $419.60 100% 100% TOTAL 32%

Markets for Peruvian Fresh Asparagus in 2007

Source: PROMPERU

Asparagus: Key Factors of Change and Success

• Trade – Production Associations

• Investment and private innovation (logistics, new product presentations and packaging, others)

• Use of modern technology

• Standards: Development and implementation

• Food safety and quality assurance

• Strategic Alliances between public and private sectors

• Climate conditions: year round production

Standardization (Quality)

• 1998: Asparagus National Technical Committee (TC)

• TC initiative of producers and exporters supported by public sector (INDECOPI, PROMPERU)

• PROMPERU held the TC Secretariat. Stakeholders: producers, exporters, consumers, the academic sector and other public and private institutions

• Three sub committees: Fresh Asparagus, Canned Asparagus and Frozen Asparagus

• From 1998 to 2007: 11 standards (harmonized with CODEX and ISO)

Some important NTP:

• NTP 209.401:2001 ASPARAGUS. Hygiene practices for manufacturing asparagus

• NTP 209.402:2003ASPARAGUS. Good Agricultural Practices (BPA for its acronym in Spanish)

• NTP 011.109:2008ASPARAGUS. Fresh asparagus. Requirements

• NTP 209.406:2008CANNED ASPARAGUS. Requirements.

• NTP BPA Asparagus has been a reference for NTP BPA hortifruitcultural sector

Overview Peruvian Technical Standards (NTP)

NTP BPA Asparagus NTP BPA Hortifruitcultural

• NTP in asparagus industry good quality products

• Asparagus factories with suitable infrastructure

• Exporters assure innocuity and high quality for the demanding markets

• Support for the application of HACCP system in the national food industry

• TC in international standardization: Codex Committee on fruits and vegetables (Mexico); and 24 ° Session of the Codex Alimentarius Commission (Geneva)

• Model to be adopted for other export products

Why is the National Technical Committee (TC) important for business?

NTP Asparagus BPA

PROMPERU IPEH

Award for promoting development

ADEX: Exporters AssociationAGAP: Association of Peruvian Producers and Agroexporters Guilds

Peruvian Institute of Asparagus and Vegetables (IPEH)

Strategic Alliances in fresh asparagus

Facilitator and strategic partner: Government

PrivateAssociation “Frío Aéreo”

Importers Association Fresh Asparagus

Agriculture Association

Ica

APTCH Producers AssociationChavimochic

Terminal Market

ADEXAGAP

Production Area Other Associations

XII International Asparagus SymposiumLima - Peru

• Every 4 years:USA – 1997Japan - 2001 Netherlands – 2005Peru - 2009

• Coordination: International Society for Horticultural Science, ISHS – www.ishs.org

• In Peru organized by Peruvian Institute of Asparagus and Vegetables

www.ipeh.org

SUCCESSFUL EXPERIENCE

PERUVIAN

COFFEE

The importance of Peruvian Coffee

• Main agricultural export product of Peru

• Cultivation is concentrated in Arabica Coffee (conventional coffee)

• World demand for special coffee has increased. Consumption preferences: gourmet and health oriented foods

• 1996: Peru ranked 15 among exporting countries; 2006: 6th place in the ranking

• 150 thousand families are producers and 2 million people depend on coffee sector growth.

• Until the year 2000 the US was historically the largest buyer of Peruvian coffee.

• In 2000 Germany became the largest buyer of Peruvian coffee (32%), followed by the US (22 %).

Importance of Peruvian Coffee

Peru: Coffee exports (Thousands tons 1994-2006)

Source: PROMPERU

62.2

104.6 100.1 98114.4

144.4 143.2159.9 167.6

150.4

191.1

142.1

238

0

50

100

150

200

250

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Years

Thou

sand

s To

ns

3 NTP7 NTP 2 NTP

4 NTP 3 NTP

3 NTP

1 NTP

3 NTP

3 NTP

Markets for Peruvian Coffee in 2007

Source: PROMPERU

BACKGROUND

• 1960s Peruvian coffee was purchased under particular brands (E.g.: Netra, Lanco)

• 1970s and 80s purchases based on a description of the production process (MC and MCM) and on the production area

• The description of the production process was confusing potential buyers were cautious (sporadic and inconsistent demand)

• 1990s two associations arise: The Peruvian Chamber of Coffee (1991) and the National Coffee Board (1993). Goals: promotion, dissemination, training and project implementation related to coffee exports.

• Until 2005 discount of US$ 4.00 per QQ for delivery to the New York Board of Trade.

• In July 2005, based on the quality improvement of Peruvian coffee, the discount is eliminated. Benefits to exports in over US$ 20 million per year.

• Between 2002 and 2005 the enterprise KRAFT replaced Colombian for Peruvian coffee in LUFTHANSA airline.

• Main coffee brands in the world (Starbucks, Lavazza, Folgers, Jacobs, Dunkin Donuts, etc.) offer Peruvian coffee in their markets.

BACKGROUND

Standardization (Quality)

• 1998: Coffee National Technical Committee (TC)

• TC initiative of producers and exporters supported by public sector (INDECOPI, PROMPERU)

• PROMPERU, secretariat of the TC. Stakeholders involved: producers, exporters, consumers, academic sector and other public and private institutions

• From 1998 to 2007: 23 Peruvian Technical Standards (NTP), harmonized with ISO

• The TC participates in international standardization: ISO TC 34/SC 15 - Coffee

Peru in International Standardization of Coffee

Some important NTP are

• NTP 209.311:2003 SPECIALTY COFFEE. Requirements

• NTP 209.312:2006 COFFEE. Good practices for the prevention of mould formation

• NTP 209.027:2007 GREEN COFFEE. Requirements

• NTP ISO 10470:2006 GREEN COFFEE. Defect reference chart

• NTP ISO 9116:2006 GREEN COFFEE. Guidelines on methods of specification

Overview Peruvian Technical Standards (NTP)

• NTP in coffee industry good quality products

• Before standardization: “filler” (third category)

• After standardization: main ingredient in the mixtures of major international coffee toasters

• Peruvian coffee exports have grown (as has its demand). Access to the main world coffee markets

• Based on NTP 209.027 GREEN COFFEE. Requirements, The Peruvian Chamber of Coffee has developed over 80 training courses for producers

• From 1998 to 2007 Peruvian coffee exports increased from 2,500,000 QQ to 5,100,000 QQ

Why is the TC important for Business?

Strategic Alliances

Facilitator and strategic partner: Government

Producers, exporters and industry

Markets

Peruvian Chamber of Coffee National

Coffee Board

THANK YOU VERY MUCH!

Augusto Melloamello@indecopi.gob.pe