UNCTAD Secretary-General's High-Level Multi-Stakeholder Dialogue on Commodities

in the context of UNCTAD XII

28-29 January 2008

Adding Value to Agri-Food Exports

and Complying with Standards

By

Ms. Shashi Sareen Director, Export Inspection Council India

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD

ADDING VALUE TO AGRI-FOOD EXPORTS AND COMPLYING

WITH STANDARDSPresentation at UNCTAD Secretary

General’s High Level Multi-Stakeholders Dialogue on Commodities in the Context

of UNCTAD XII(28-29 January 2008, Geneva)

by Ms. Shashi Sareen,

Director, Export Inspection Council India

E-mail: director@eicindia.org

OUR CUSTOMERS - The government whom we advice on measures for sound development of export trade - Exporters whose products are

certified under our consignment wise inspection.

• Issues arising out of existence of standards in international trade

&• Strategies and initiatives taken by

India to handle these

A Case Study of Black Pepper

Coverage

Pepper

• Establishment of WTO - Dismantling of traditional barriers for free flow of trade

• Creation of global market-equal access to all • Quality, health, safety & environmental issues have

acquired centrestage• Governments imposing regulatory requirements to

fulfil objectives/ achieve appropriate level of SPS protection especially for health & safety

• Private sector including retailers imposing stds(including sustainability) for competitive advantage

• National regulation & voluntary standards causing impediments to trade

• To prevent indiscriminate use, rules & disciplines laid down in Non-tariff agreements–SPS/ TBT

• Issues wrt compliance with standards continue

WTO Scenario

• Allows countries to set their own/ adopt international standards

• Scientific basis, MFN/ National treatment principle • Encourage harmonization with international

standards – SPS permits higher standards based on risk assessment

• Transparency• Equivalence

allows countries to use different standards & inspection methodsEncourages recognition of CA procedures & results (mutual recognition)/ equivalence of specified SPS requirements

SPS & TBT Agreements –A Recap of Imp Features

•• Stringent standards increasingly being laid Stringent standards increasingly being laid down by importing governments down by importing governments –– microbial,microbial,contaminants, excreta (animals/rodents), aflatoxin, pesticide residues

• Increasing focus on residues- Limits more stringent than necessary, based on LOD rather than risk, insistence on RMPs

•• Regulatory standards more stringent Regulatory standards more stringent -- not not harmonized with international/ within EU harmonized with international/ within EU aflatoxinaflatoxin

•• Transparency requirementsTransparency requirements

ISSUES OF CONCERN 1

• Primary production - problem of implementation of GAP in farms & other primary production sites

• Traceability requirements being imposed • Increasing rejections & destructions due to

incorrect interpretations or differing sampling/ test methods

• Rapid Alert System – alerts imposed on rejection, but lifting alerts not streamlined

• Organic certification• Non-GMO certification demanded

ISSUES OF CONCERN - 2

• Irradiation – some countries approve irradiation facilities even in 3rd countries

•• Lack of interest by importing countries in Lack of interest by importing countries in recognition of exporting countries control & recognition of exporting countries control & certification systems as equivalent certification systems as equivalent

• Voluntary Standards – ISO 9000/ ISO 14000/ 22000, organic certification, Euregap, BRC –restricts market access till country upgrades, also cost of implementation

• Retail chains, more value addition demanded

ISSUES OF CONCERN -3

STRATEGIES & INITIATIVES BY INDIA TO MEET GLOBAL

STANDARDS

Introduction to Black pepper• Obtained from perennial climbing vine-Piper nigrum

flowers in June-July, pikes harvested in Jan – Feb• Berries separated from stalk manual/mechanical• Dried in sun for 5-6 days to get black pepper• Pepper cleaned to remove stems, husks, pinheads• Spicy odor-volatile oil; pungency-alkaloid piperine• Exported as black (whole & ground), white, green,

canned /bottled green, pepper extracts (oil/oleoresin)

• India is largest producer, consumer & exporter• Production – 40-50 000 tonnes annually• Exports – 28 750 tonnes; USA (largest buyer), UK,

Germany, Italy, Canada, Australia• Blacklisting of Indian black pepper by USA in

late 80s/ early 90s

Strategic ResponsesProactive

• Anticipate needs & comply ahead of time

• Participate in developments (standards)

• Anticipate requirements & leave particular markets

Reactive• Wait for imposition

of requirements & then upgrade

• Complain when stringent conditions applied

• Wait for requirements and give up

Comply

Voice

Exit

Reactive initiatives• Blacklisted in 1987 - 20/60 consignments detained

due to presence of filth• Problem analysed – causes poor post harvest, farm

storage, cleaning & grading practices• Extensive discussions with USFDA– decided to lift

automatic detention if successful certification program implemented

• EIC identified as sole Certifying Agency• All consignments to be tested as/US standards wef

4/5/1988• Programs implemented at various levels (grower,

post harvest, storage)• US detentions lifted on 27/01/89, draft MoU signed

b/w USFDA & MoC&I – effective till date

Proactive Initiatives for Export Sector• Export Sector special focus – WHY?

Builds image of country as prevents inferior Q exportImporting country requirements may be more stringent Reduces testing time at importing endMinimize/eliminate rejections at importing endMore cost effective as allows decision on product to be taken before export (recall, destruction & diversion)

• Regulators, Conformity Assessment, promotional, trade bodies–all worked together to address issue

• Role ofPromotion – Spices Board Quality Control/ Certification – EICTrade

• Expanded to move up the value chain to manufacture products including pepper extracts (pepper oil, pepper oleoresin)

• Focused on non-price factors – quality, packaging, safety, winning customer loyalty, addressing voluntary standards

• Implementing GMP/GHP, quality/ food safety systems

• Technology upgraded – super critical extraction, cryo grinding, steam sterilization

• Automation in storage – no hand touch, material handling equipment, cold storages

Trade

GAP/GHP/GMP Some aspects• GAP in primary Production

Plants varieties having high yield & good quality selectedRecommended agronomic & plant protection practices followed

• GHP/GMP in processingHygienic systems for separation of berries from spikeBerries dipped in boiling water for 1 minute before sun drying (reduces microbial load & dust)Drying on raised platforms with bamboo or canvas sheets or clean cement concreteDrying yard protected from birds, animals & rodents Winnowing to clean produceStorage in clean gunny bags, suitable containers with lidsAll containers/ products/ m/c placed away from floor

Spiral cleaning

Promotional Activities by Spices Board• Financial support & assistance:

Adoption of high tech methods in spice processingSetting up/ upgradation of labsISO/HACCP certificationProduct/brand promotion, packaging development, market developmentParticipation in trade fairs, conducting market surveysPrinting of promotional literature

• Programmes for aflatoxin & pesticide residue control

Integrated pest managementAssistance for construction of solar dryers drying yards & subsidized supply of polythene sheets

SPICES BOARD PROGRAMMES FOR PRE AND POST HARVEST IMPROVEMENTS

SOLAR DRYING FOR UNINTERRUPTED AND AFLATOXIN FREE DRYING

SPICES BOARD PROGRAMMES FOR PRE AND POST HARVEST IMPROVEMENTS

CONCRETE DRYING YARD FOR HYGIENIC DRYING

EXPORT QC / CERTIFICATION EXPORT QC / CERTIFICATION -- EICEIC• Importance recognized as early as 1963 & GoI

enacted the Export (QC&I) Act, 1963 – an umbrella Act governing quality of exports

• EIC set up to advise Government on measures for sound development of exports through Quality Control & inspection to include

notification of standards certification systems Agencies for QC & I established/ recognised

• EIC operates certification through 5 EIAs at Mumbai, Kochi, Kolkata, Delhi & Chennai; 37 Sub-offices & labs & other designated CABs

EIC Network

Initiatives by EIC• Assuring product quality & safety through

implementation of inspection & certification systems to meet importing country requirements

• Equivalence Agreements with major trade partners

• Dialogue with overseas governments on concerns/ taking up at international fora/ participation in international standards setting

• Capacity Building – strengthening labs, training manpower

Inspection & Certification - 1• Product Spectrum

Mandatory export certification – 6 items (Marine, egg, meat, Dairy, Honey, Poultry Meat)Voluntary - notified (nearly 1000 including black pepper, basmati rice, sesame seeds, hops, herbal )Non GMO certification and Organic certification

• Legal Basis – Notification SO 1311 dtd 22/04/1991• Systems of Certification

Consignment wise InspectionSystems approach - FSMS based approach (HACCP/GMP/GHP aligned with Codex/EC/US)

- Primary responsibility on processor – develop & maintain systems; EIC to approve & ensure compliance

Inspection & Certification - 2• Approval/renewal of units through a 2-level

process (Conditional & final) • Compliance ensured through 3-tier

surveillance system - Risk based monitoring • Traceability & Primary production issues –

addressing farms controls, residue monitoring, awareness programs

• Complaint addressing system • Testing as per latest technology, equipment &

systems reqts (Pesticide/antibiotic residues, heavy metals, microbial, aflatoxin, water)

SOME FIGURESUnits approved : Total - 548• Marine - 368; Dairy – 55; egg – 3; Poultry – 4;

Honey – 2; Rice – 6; others (ice plants, cold storages, etc) – 70; Non-food - 32

• Black pepper : IPQC - 8CWI – 40

• Oleoresin – 9• Consignments inspected – 1370, quantity 13885

metric tonnes• Rejections - 151 mt ie 1.09% before export (as

against 50% in initial stages)• No rejection at importing end

RECOGNITIONS-1•• ECEC -- Designated CA for marine products & Designated CA for marine products &

basmati rice; dialogue on for dairy, egg, poultry basmati rice; dialogue on for dairy, egg, poultry

•• USA (USFDA)USA (USFDA) -- recognized for Black Pepper recognized for Black Pepper –– no no detention if accompanied by EIC certificate; detention if accompanied by EIC certificate;

•• SingaporeSingapore –– MRA in area of food & agri, electrical MRA in area of food & agri, electrical & electronics, drugs, telecommunication& electronics, drugs, telecommunication

•• Australia (AQIS)Australia (AQIS) -- recognized for marine products recognized for marine products

•• Sri Lanka (SLSI)Sri Lanka (SLSI) -- recognized for >100 regulated recognized for >100 regulated prods (food, cement, engineering/electrical, etc)prods (food, cement, engineering/electrical, etc)

•• Japan Japan –– recognized for poultry products October recognized for poultry products October 20052005

RECOGNITIONS -2•• Italy Italy –– fish & fishery productsfish & fishery products

•• Turkey Turkey –– recognized EIA health certificates for all recognized EIA health certificates for all food items, stainless steel utensils & packaging food items, stainless steel utensils & packaging material for foodsmaterial for foods

•• S.Korea (KFDA)S.Korea (KFDA)-- recognisedrecognised for food/ agri prodsfor food/ agri prods

•• ChinaChina –– Agreement on Iron ore signed 21/12/2006 Agreement on Iron ore signed 21/12/2006

•• Nepal Nepal –– all agriculture & food productsall agriculture & food products

•• OthersOthers -- EU (Germany, UK), Israel, Bangladesh, EU (Germany, UK), Israel, Bangladesh, S.Arabia, Libya, Pakistan, Mauritius, Indonesia, S.Arabia, Libya, Pakistan, Mauritius, Indonesia, Malaysia, Russia, JapanMalaysia, Russia, Japan

CAPACITY BUILDING• Systems Upgradation

Streamlined existing schemes in line with int reqtsDeveloped RMPs in line with reqts of importing countries Monitoring risk-based

• Upgrading CA InfrastructureLegislative frameworkInfrastructural facilities

Laboratories (equipment/methods/systems, manpower) Computerization

• Upgrading Manpower: Trainings – 10th PlanExporters : 48 Programs; 3211 participants Own manpower :58 Programs; 1187 participants,

IMPACT OF MEASURES• Increase in exports Quantity Value

Pepper (tonnes) (Rs million)– 2003-04 16,635 1427.7– 2006-07 28,750 3062.0

Oils & Oleoresins– 2003-04 5,133 3799.2– 2006-07 6,250 5107.9

• Access of Indian products in foreign markets• Reductions in rejections• Streamlining exports through MoUs/ MRA/

Equivalence Agreements – USA example• Helping industry build up facilities indirectly

through constant monitoring of requirements of infrastructure, HACCP

ANY QUESTIONS ?

EIC Website – www.eicindia.org