COLEACP panel at AGRF: The key role of SMEs in serving urban food markets

On 7 September, COLEACP partnered with the Pan African Farmers Organisation (PAFO), AKADEMIYA 2063 and the European Commission to host a virtual side-panel in the lead-up to the Tenth Annual Summit of the African Green Revolution Forum (AGRF). In total, more than 400 participants have followed the debate. The discussion on the key role of SMEs in serving urban food markets focused on the rapid urbanisation and population growth in the continent, and the implementation of free trade agreements, offering new opportunities for SMEs in the agrifood sector serving local and regional markets.

Some of the key points made by the speakers: SMEs have significant potential to create employment, especially for youth, and to catalyse investment, particularly in the fruits and vegetables sector. Members of a growing middle class are seeking greater diversity and higher quality in their diets. This requires increased investments by the entrepreneurs themselves in technologies, including cold storage, packaging to increase product shelf-life, value addition techniques, and distribution networks. Covid-19 has accelerated the use of innovations (i.e. digital platforms), a shift to local markets and shorter supply chains. To be sustainable, investments in capacity development (vocational training) are required. Low productivity, access to farm inputs, quality seeds, soil and water management and biocontrol measures remain problems. Addressing post-harvest losses and wastage along the chain will be needed to transition to greener businesses. So the role of research is very important in supporting safely produced vegetables and increasing awareness of the diversity of local, highly nutritious foods in African diets, considering that the continent currently has the lowest consumption of vegetables in the world. The future for SMEs is in regional markets and urban demand, and SMEs can grow in expanding African markets provided the right competences and skills are acquired.

Policy makers and investors need to support entrepreneurship and employment in agrifood chains, which directly impact smallholders and SMEs. Due to unequal distribution along the chain, and the weaker position of farmers and SMEs, targeted support remains key to help them supply the quality consumers expect. A fairer distribution of the risk in the value chain is needed. Public and private policies and investments need to support SMEs in accessing research, ICTs, climate change mitigation tools, and social protection systems. Private sector operators, businesses and SMEs need support to transition to more sustainable practices, respectful of environmental, social and labour rights, through policy incentives. Green investments, blending facilities, and medium/long-term loans with technical cooperation should be provided to SMEs urgently to enhance local and regional value-addition and ensure they survive Covid-19.

New EU Organic Regulation postponed by one year

In a press release issued on 4 September, the European Commission (EC) announced a proposal to postpone the entry into force of the new organic regulation (EU) 2018/848 from January 2021 to January 2022. The proposal still needs to be ratified by the European Parliament, but seems certain to go ahead. COLEACP welcomes this important move, which was originally requested by Member States, the European Parliament, third countries, and other stakeholders, including the Organisation of Africa, Caribbean Pacific States (OACPS) and COLEACP itself. See more detail here.

Important information regarding EU-MRL changes

Regarding recent changes to EU maximum residue limits (MRLs) for plant protection products (PPPs): where an MRL has been lowered, it is important for any grower using the PPP to make any necessary adjustments in good time to ensure continued compliance with EU regulations. This may mean adapting production practices (GAP) or using alternative control methods. See the full information, including a complete list of the MRL changes introduced so far in 2020, and changes applicable in 2021, here.

Extension of EU facilitations for electronic transmission of certificates

On 27 July, the EU extension of emergency measures related to the electronic transmission of phytosanitary certificates, among other official controls facilitations, was published in the EU Official Journal, making official the EU decision to extend this measure until 1 October. The new Implementing Regulation (2020/1087), which amends Regulation 2020/466, introduces some changes limiting the scope of allowed facilitations on import controls. The following provisions have been deleted:

• Article 3 – now deleted, which allowed official controls to be exceptionally performed by authorised persons by the competent authority;
• Article 5a – now deleted, which allowed analysis/testing to be performed by official labs or any other laboratory designated by the competent authority on a temporary basis.

WTO SPS report stresses need for science justification for SPS measures

On 3 August, the World Trade Organization (WTO) Committee on SPS measures unveiled its report on the operation and implementation of the WTO SPS Agreement. The report includes a number of relevant calls for the fresh produce trade:

• Call for science-based SPS measures: the report urges the SPS WTO Committee to reaffirm the scientific basis of SPS measures required by the SPS Agreement, limiting their use in a manner that would constitute arbitrary or unjustifiable discrimination or a disguised restriction on trade. The report also includes the invitation of the SPS Committee to Codex, OIE and IPPC to share guidance documents, international standards, guidelines and recommendations pertaining to the consideration of scientific uncertainty and/or insufficiency of scientific evidence in risk analysis.
• Fighting the fall armyworm: this case has been used as a case study, and the report encourages countries to exchange experiences of measures to tackle its spread, as well as to request technical assistance for IPM strategies as needed.
• Food safety and trade: on maximum residue levels (MRLs) for plant protection products, a joint proposal on addressing the trade effects of pesticide MRLs notified in advance was presented by countries that included (from ACP regions) Dominican Republic, Kenya, Madagascar and Uganda. The report includes a recommendation for WTO Members to provide more transparency and predictability worldwide on MRLs by notifying all proposed changes to their MRLs, including changes to MRLs that are based on international standards; and reviewing and improving their ability to take the comments of their trading partners meaningfully into account when considering proposed changes on MRLs.

Brexit negotiations – a moving target

COLEACP continues to monitor the ongoing Brexit negotiations. While the situation is volatile, some key points for ACP exporters currently are:

• The 7th round of EU/UK negotiations has seen growing levels of EC frustration at the lack of progress.
• Time is rapidly running out for completion of complex trade negotiations, with the danger of an acrimonious no-deal UK departure increasing as each week passes.
• This would give rise to higher levels of trade disruption along EU/UK trade routes than previously feared.
• The absence of agreement on road freight ‘cabotage’ rights for UK and EU trucking companies could even lead to an absolute shortage of road freight haulage services to the UK and a serious escalation of costs for the final onward journey of ACP goods landed in the EU but destined for the UK market.
• The multiplicity of additional administrative and logistical costs which the creation of EU/UK border controls will generate will need to be accommodated in future ACP supply tenders for the delivery of goods to the UK, if ACP exporters are not to face surprises in the course of 2021.
• However, the issue of the distribution of these costs along the supply chain is likely to be hotly contested, with the unequal power relationships along ACP–UK supply chains suggesting that the burden of these additional costs will be pushed on to the shoulders of ACP producers.
• There will be an increasingly urgent need for ACP government negotiations with UK and EU authorities to facilitate the continued smooth functioning of triangular supply chains and allow ACP exporters to side-step a range of potential cost increases arising from the creation of new customs and border controls on UK/EU-originating goods.
• In the absence of such an initiative, the commercial viability of the continued functioning of many of these ACP triangular supply chains could be seriously undermined.
• In addition, the impact on food price inflation of a no-deal UK departure could well see political pressure on the UK Government to further review its Most Favoured Nation (MFN) tariff schedule.

Against this background, if they have not already done so, ACP exporters using triangular supply chains should initiate discussions with their partners in Europe on how to deal with these logistical challenges.

For ACP exporters directly serving the UK market, there is a need to make sure they are on top of the trade administration changes which the creation of the UK as a separate customs and regulatory territory will give rise to. These exporters also need to be aware their exports could be disrupted by the systematic strains placed on the UK border control service (Border Force) and the challenges facing the UK road haulage industry.

Brexit: UK plans to prepare borders after transitional period

On 3 August the UK published a consultation to adjust “Operation Brock”, whose goal is to introduce measures to minimise possible disruptions at the border between the EU and the UK on 1 January 2021. The UK’s Border Operating Model, published in July, sets out the processes that will apply to the movement of goods between GB and the EU. It includes proposed legislative amendments to enforce this operation, for instance to avoid congestion in exit points (with a focus on the Short Straits route from the UK to the EU). The UK Government is considering prioritising certain goods on the basis of perishability, economic impact and animal welfare concerns. However, the only specific categories mentioned so far as identified sectors of concern are day-old chicks and seafood.

Brexit readiness: UK import-export guidance

The UK has published updated guidance for traders on importing and exporting goods between the UK and the EU after 1 January 2021, with procedural steps on:

• How to import goods from the EU into GB from January 2021
• How to export goods from GB into the EU from January 2021

The documents are intended to help all those trading with the EU prepare for the changes so they can continue to trade. The guides walk through each step and set out the options.