introduction to trade facilitation for agriculture and food ... 1...agriculture and food products dr...

Introduction to Trade Facilitation for Agriculture and Food Products

Dr Heiner Lehr [email protected]

Agriculture in the Asia-Pacific Region

• Agriculture accounts for a quarter of the gross domestic product (GDP) of Asia‐Pacific’s developing countries and employs about 60% of the region’s working population (ESCAP 2008).

• Improving agricultural productivity could pull 218 million people out of poverty in this region (ESCAP 2008).

• It can bring investment opportunities for the private sector, and be a driver for boosting agriculture related industries.

• The World Bank estimates that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture.

Taken from Khan Salehin, Agricultural Trade Facilitation : An Overview and Business Process Analysis (BPA)

Agriculture in the Asia-Pacific Region

3

Source: FAO 2009

Source: FAO 2009

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Agricultural Population as Share of Total Population in Selected Asia-Pacific Countries

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Contribution of Agriculture to GDP in Selected Asia-Pacific Countries

34%

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Benchmarking

(c) SYNTESA PARTNERS & ASSOCIATES 4

Export

country and

product

Destination No. of

days

No. of

actors

involved

No. of

processes

Type of

documents

required

Cost ($)

Cambodia –

Maize

China 20 15 13 22 1250-

1360

Lao PDR -

Maize

Thailand 16 11 8 21 735

Myanmar –

Rice

West Africa 19-23 20 10 >25 425

Bangladesh-

Jute bag

India 10 15 12 24 -

Nepal -

Cardamom

India 15 11 9 14 1213

Greece Russia 4-5 3-4 7 Around

350

Source: ESCAP BPA Study Reports 2013-14, available at: http://unnext.unescap.org/tools/business_process.asp

Key Findings: Business Process Analysis Studies (South and Southeast Asia)

http://unnext.unescap.org/tools/business_process.asp

Benefits of Trade Facilitation

GDP gains from 25% reduction in time to export/Import, GMS and China

Source: Strutt, Stone, and Minor (2008) simulations

Taken from Khan Salehin, Agricultural Trade Facilitation : An Overview and Business Process Analysis (BPA)

Improving the competitiveness of agrifood chains

Information Management in Agrifood Chains

– refers to the distributed collection, storage and usage of information

items, connected by traceability1, that can be accessed via electronic

systems

1 For a definition of traceability, please refer to section Error! Reference source not found..

Information is not equal information

Paper-based systems • Easy to implement

• Time resilient

• Not scalable; limited by capacity of personnel and physical transportation

• Cannot be re-used

• Usually not accessible; filed in physical location

• Information chains impossible to construct

• Library of Congress

Paperless systems • Require technical capacity

• Subject to data format compatibility issues

• More scalable; can be (semi)automated

• Easy to copy and exchange; no transportation time

• Easily accessible

• An information chain can be established

• Google

8

Chain food information management systems

• National single window systems and ePermit systems

Customs management

• Food safety oriented systems

• Animal and carcass tracking

e-traceability systems

• Fair trade

• Religious

• No child labour

Ethical compliance

• Sustainability tracking

• Compliance to specific food standards

Standard compliance

• IUU fishing

• Export/import licenses

• Shipment registration

Legal compliance

• Transparency systems

Marketing-oriented systems

9

The layer model

10

Primary production

Processing Distribution/

Export Consumers

Import/ Retail

Food Safety Agencies EXPORTING NATION

Layer 2: Private sector

Layer 1: Public sector

Export control

Food Safety Agencies IMPORTING NATION

Import control

red light: non-conformance green light: conformance

Private or public certification agencies or bodies

Layer 3: Verification

Practical recommendations

1. Development of a Single Window for Agrifood Trade (SWAT)

Implementation of the SWAT should generally be based on the following:

– A national vision and master plan for the improvement of agrifood supply chains, developed in collaboration with national and international stakeholders involved in the agrifood supply chain;

– Analysis of business processes, documents and information flows of the national agrifood supply chains and their simplification and automation in a stepwise process, as described in the previous UNNExT guides for single window implementation.

– Application of international standards whenever possible

– Use of electronic data and information along the supply chain where possible, with electronic information submitted only once and then reused.



2. Establishment of a roundtable for agrifood chain information management

– to develop a national vision for information exchange on its agrifood production.

– Vision should be supplemented by a master plan for its implementation.

– Participation of the private sector should be made a priority.

3. Identification and implementation of missing paperless systems for agrifood trade

– Efficient information management in agrifood chains is not possible based on paper documents

– Adoption of agrifood chain information management systems should be made a priority and early adopters incentivised – be that public or private entities



4. Establishment of normative databases for locations, products and land use


Database of food production locations

• Draws on existing farm and food premises registration schemes

• Integrated with existing geospatial information

Product type database

• Based on UN Central Product Classification (CPC)

• Introduction of product classification in all relevant government processes

Land use database

• The link between premises and product types, supporting geo-traceability

• Integrates with existing data sources


5. Establishment of standard framework for identification and information exchange

– Globally unique identification is essential for successful agrifood chain information management

– Governing standard ISO15459 should be employed

– Governments should have a facilitating role in establishing a framework which

• Names uniquely all relevant parameters for a food stuff

• Defines a set of exchange protocols how to exchange data

• Allows interconnectivity with variety of information systems

• Implements effective safeguards against unauthorised governmental data access

• Maximises efficiencies with other information needs (B2B, Certifiers, B2C etc.)



6. Establishment of authorized economic operators (AEO)

– Authorised economic operators (AEOs) are those exporters that have proven to be highly qualified and reliable entities with a low risk profile.

– AEOs are of the main building blocks within the WCO SAFE Framework of Standards (SAFE).

– SAFE sets out a range of standards to guide international Customs Administrations towards a harmonised approach based on Customs to Customs cooperation and Customs to Business partnership

– It is a reasonable strategy to implement Single Window operations with AEOs before extending it to all operators.



7. Establishment of risk-based inspection system for issuance of licences and certificates

Risk-based trade authorisation

– Is management by priorities

– Optimises scarce resources in the avoidance of food-borne illnesses

– Is the consequent application of Hazard Analysis and Critical Control Points (HACCP) to trade processes

The purpose is to provide adequate evaluation of food-borne risks:

– Detect and categorize risk factors

– Measure/estimate risk for society

Risk-based trade authorisation recognises the different risks that different foods, different origins and different processes represent and matches them with differentiated attention such as inspections.



8. Addressing legal implications of information management systems for agrifood chains

SWAT requires clear regulation on what data is required from food business operators

– Governmental agencies must refrain from attempting to capture more data than absolutely necessary.

– Provisions should be made in the regulatory framework that data may be delivered via trusted third party to remove any barrier to implementation of the regulation; see unnext.unescap.org/tools/default.asp for more information

– It is recommended that relevant laws on data ownership and confidentiality exist and that a governance policy is put into place and regularly assessed by an external party


http://unnext.unescap.org/tools/default.asp


Food safety • More trust

• Avoidance of animal diseases

Improved market access

• Access to high-value markets

• Differentiation in the marketplace

Increased supply chain

efficiency

• Better sourcing

Better marketability

• Consumer interaction

• Direct marketing

Fraud avoidance • Greater total market

18

PUBLIC PRIVATE PARTNERSHIPS

Taxes

Levies

9. Funding development of core components

Kickstart actions

Kickstarting the SWAT through 3 priority actions

• Kickstart action 1: Implement electronic agrifood license/ permit/ certificate and audit system

• Kickstart action 2: Establish international cooperation on SWAT and inter-agency information systems

• Kickstart action 3: Implementation of an automated risk-based inspection system using cross border electronic information exchange of agrifood permits and certificates


The smarter food vision

smarter food

inclusive safe

traceable 70% of food globally is produced by smallholders, most of which are excluded from the global food chain. Information technology is used to integrate small-holders in international supply chains.

Consumers want to make informed choice of the food they buy for religious, environmental

or health reasons or simply for preference. Traceable food is food of which information is

recorded along its elaboration process. Consumers can access

such information and eat in accordance to their needs.

Food has to be safe to produce and safe to consume. Safe food uses information technology to improve controls over environ-mental and social impact of its

production as well as its safety to be consumed.

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Thank you for your attention!


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