NOTICE | EU rules on SA citrus are punitive and unfair, with only a brief reprieve

The EU accounted for 41% of Southern African citrus exports by value in 2021, and in the same year citrus locally accounted for a quarter of South Africa’s total agricultural exports. The new regulations are devastating, write the authors.

In mid-July 2022, the European Union imposed new restrictions on South African citrus imports. The new phytosanitary requirements were aimed at controlling false codling moth, a citrus pest native to South Africa and for which there is zero tolerance in the EU.

The new regulations are a blow to the South African citrus industry, as they will severely disrupt exports. The country is the world’s second largest citrus exporter after Spain. The EU accounted for 41% of Southern Africa’s citrus exports by value in 2021. Locally, in 2021, citrus accounted for 25% of South Africa’s total agricultural exports, up from 19% in 2011.

In our view, based on decades of engagement with EU regulations, and food exports more generally, the regulations are unfair and punitive.

First, the EU gave South Africa less than a month to adjust to the new regulations. The EU measures were published on June 21, 2022, entered into force on June 24, 2022 and required shipments arriving in Europe from July 14, 2022 to comply with the new requirements.

The South African government successfully negotiated a settlement with the EU to clear floating containers of citrus fruit stuck in EU ports on August 11, 2022 (3 weeks later). Nevertheless, the whole process imposed additional costs on the producers. At a minimum, transitional measures are necessary. This is done to give countries time to adapt.

Second, since the EU first declared false codling moth as a quarantine pest in 2018, South Africa has implemented extensive measures in accordance with phytosanitary regulations. Its integrated pest management (systems approach) has resulted in significant investments in research and “learning by doing” to put the system in place. There is evidence of success.

In our view, the new rules are de facto non-tariff barriers to trade. Non-tariff measures are imposed _de jure protect consumers from unhealthy or poor quality products, but de facto they represent an increase in trade costs.

We also believe that additional requirements will only divert scarce resources and impose new costs on producers, threatening the long-term sustainability of the industry.

Standards in world trade

Product and process standards are key factors shaping the international trade regime. The ability to meet these standards is both a threat to producers (excluding them from profitable markets) and an opportunity (providing the possibility of entering high-margin markets).

Phytosanitary standards are particularly important. The challenge is that they are determined solely by the buying party or country, with the producer having little ability to challenge compliance decisions. An additional problem is that powerful lobbies can lobby for standards to be protectionist barriers. This harms both consumers who pay higher prices and producers who are forced to apply new processing methods.

The ever-changing landscape of phytosanitary standards is characteristic of the global fresh fruit trade. Addressing this requires constant investment in research and technology development to keep up and comply. However, the political nature of these issues, which require government-to-government negotiations, makes it difficult to demonstrate compliance with and basis for these standards.

As of August 12, the current hurdle has cost local citrus growers over R200 million in losses. Additionally, growers are more than likely to receive half of their expected yields on any fruit that is released, due to the fact that most containers have been standing for a few weeks and therefore missed their schedules due to a late arrival.

Applicable from 1 January 2018, the EU directive listed false codling moth (FCM) as an EU quarantine pest and prescribed specific import requirements. This meant that South African citrus exporters shipping to the EU market would be subject to new requirements. Non-EU countries could use cold treatment or other effective treatment to ensure produce is free from the pest.

From September 1, 2019, exporting countries were required, prior to export, to provide documentary evidence of the efficacy of the treatment used for further trade.

In response to the 2018 EU phytosanitary regulations on false codling moth, the South African citrus industry developed the FCM management system as an alternative to post-harvest disinfestation (cold treatment).

South Africa currently uses integrated pest management (systems approach) – the sterile insect technique and mating disruption – in conjunction with complementary controls to ensure that citrus fruits are free from moth – from field to packing plant and shipping to the EU. A systems approach is a pest risk management option that integrates different measures, at least two of which act independently, with a cumulative effect.

The False Codling moth management system was first implemented in 2018 for citrus exports to the EU with continuous improvements over the years (p.32). FCM’s interceptions have been consistently low for the past three years.

The new regulations require orange imports to undergo further mandatory cold treatment processes and pre-chilling stages for specific periods. These should be done at loading prior to shipment and subsequent importation.

Some cold stores have modern technology to cool fruits to stipulated temperatures. But a number of cold stores still have outdated technologies that cannot.

Next steps

The South African citrus industry recognizes that standards are clearly essential. It has invested in research and technology to keep pace with evolving phytosanitary standards and to support the shared capabilities needed to deliver high-quality, pest- and disease-free fruit.

But standard setting can be misused. This means that they must be applied and designed transparently.

simon robertProfessor of Economics and Senior Researcher, Center for Competition, Regulation and Economic Development, UJ, University of Johannesburg; Antonio AndreoniProfessor of Development Economics, Department of Economics, SOAS University of London and Visiting Associate Professor, SARChI Industrial Development, University of Johannesburgand Shingie Chisoroprincipal researcher, University of Johannesburg

This article is republished from The conversation under Creative Commons license. Read it original article.

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