Bridging the EurepGAP?

Horticulture is the fastest growing agricultural sub-sector in Kenya, contributing close to 13 per cent of the GDP. At least two million Kenyan employees earn all or part of their income from horticulture. In the past, smallholders have worked in isolation, selling mainly to middlemen without direct contact with exporting companies or an understanding of where or how their products are sold. But from 1st January 2005 horticultural imports to the EU, as with all foodstuffs, will have to meet mandatory traceability requirements. Is Kenya ready, and what impact will it have on the estimated 50,000 smallholders involved in the horticultural export of vegetables, fruits and flowers?

At the Indu-Farm Ltd packing house, on the edge of Nairobi, Director Christian Bernard turns over a carton of ready-packed green beans to reveal a bar code; a string of numbers which provides the information to trace the beans back to the exact location where they were produced. Any problem with the consignment can be traced back to determine the stage at which the problem arose or which producer was at fault.

Indu-Farm is already compliant with traceability requirements. Bernard keeps exact records, not only to meet EU regulations, but because he runs a 'tight ship'. Weekly production records document when each crop is planted, when pesticides are applied and what is harvested each week. Irregularities are soon identified and field officers sent out to investigate. But the pressure to be accountable, whilst retaining cost-effectiveness, is taking its toll. As with other exporters, Indu Farm is reducing the number of smallholder groups from which they source their products. Indu-Farm works hard to maintain standards and to provide training to their farmers but a successful business network can only be achieved by working with well-structured groups. The alternative is for exporters to set up their own farms, which is increasingly evident around Lake Naivasha and in Limuru, where rows of large plastic tunnels lie behind high protective fences.

Sensible standards or rigid requirements?

Traceability is not the only hurdle that the EU has imposed to ensure food safety. Exporters already have to comply with sanitary and phytosanitary (SPS) standards and maximum residue limits (MRLs). Failure to meet the requirements results in rejection of the exports on entry. And yet, despite these stringent requirements, there are now further standards that have been formulated under the Global Partnership for Safe and Sustainable Agriculture (EurepGAP). The partnership involves agricultural producers and European retailers, namely large supermarket chains, who have defined the minimum acceptable standards under a framework of good agricultural practice, including issues such as traceability but also record-keeping, soil and water management, pesticide storage and application, and post-harvest treatments.

Requirements, which ensure food safety and farmer safety, are undoubtedly a step in the right direction for any country. Moreover, there are those who feel that adhering to traceability, SPS, MRLs and EurepGAP standards will professionalise the Kenyan industry and provide it with a competitive advantage over other countries in Africa, which are less developed for horticultural exports. But, nonetheless, a large proportion of smallholder farmers in Kenya is dependent on the export industry and there is no question that many of them will struggle to comply with these exacting standards.

An unclear path

The situation is certainly confusing, and communication efforts have not been consistent. Many people are bewildered over the deadline for legal traceability requirements and the need to be EurepGAP compliant. Recent reports,for instance, in the Daily Nation, Kenya's daily newspaper have quoted ministers stating that horticultural exports from Kenya will be exempt from the new EU traceability requirements in January 2005. Meanwhile, a recent workshop for journalists has recently been held by the DFID-funded Business Services Market Development Project (BSMDP) in order to 'put the story straight' on EurepGAP. And some newspaper reports, at least, have stated more accurately that the high standards required for exports to Europe will clearly have an impact on the horticulture industry.

The exact impact of EurepGAP is hard to predict. The cost of traceability lies mostly with exporters as they have to be assured of where their products are sourced. However, to be compliant with EurepGAP, individual farmers or groups all have to be audited and certified. A preliminary report released from the USAID-funded Horticultural Development Centre (HDC) suggests that it will cost at least US$20,000 to achieve certification for the average smallholder group of 45 growers - a huge investment that will have to be met if smallholders are to remain in the export chain.

But, whilst all exports to the EU will have to fulfil traceability requirements from January 2005, not all exports to Europe as yet have to be EurepGAP compliant. Most retailers in France, Spain, Italy and the Scandinavian countries are, for instance, not currently in the partnership and exporters, such as Indu Farm Ltd, will endeavour to maintain their market with these non-EurepGAP retailers.

To many farmers, the stringent non-legal requirements of EurepGAP are seen as yet another trade barrier. Many of them ask why European consumers are so against products from Kenya with no realisation that the same rules apply to producers worldwide. Even for those farmers that understand the implications of traceability and EurepGAP, and are prepared to undertake the training and auditing procedures, there are many that feel the information has come too late and they feel ill-prepared for the challenges that lie ahead.