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

The EU accounted for 41% of southern Africa’s citrus exports by value in 2021, and in the same year citrus accounted for a quarter of all local SA 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 intended to combat the False Codling Moth, a citrus pest that is native to South Africa and has zero tolerance in the EU.

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

In our view, based on decades of involvement with EU regulations and food exports in general, the regulations are unfair and punitive.

First, the EU gave South Africa less than a month to adapt to the new regulations. The EU measures were published on June 21, 2022, came into force on June 24, 2022 and shipments arriving in Europe after July 14, 2022 had to meet the new requirements.

The South African government managed to negotiate an agreement with the EU to clear floating citrus containers stuck in EU ports on 11 August 2022 (3 weeks later). However, the entire process imposed additional costs on producers. At the very least, transitional measures are needed. This is done to give countries time to adapt.

Second, for the first time since the EU declared false quarantine pest in 2018, South Africa implemented extensive measures to comply with phytosanitary rules. Its integrated pest management (systems approach) has involved significant investment in research and “learning by doing” to achieve the right system. 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 to protect consumers from unhealthy or low-quality products, but because they indicate an increase in trade costs.

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

Global trade standards

Product and process standards are the main factors shaping the international trade regime. The ability to meet these standards is both a threat (being locked out of profitable markets) and an opportunity (providing access to high-margin markets) for producers.

Phytosanitary rules are particularly important. The challenge is that it is only determined by the buyer or the country, as the producer has little ability to challenge decisions on compliance. An additional problem is that powerful lobbies can push standards to become protectionist barriers. This hurts both consumers who pay higher prices and producers who are forced to apply new processing methods.

An ever-changing landscape of phytosanitary standards characterizes the global fresh fruit trade. Responding to this requires constant investments in research and technological development, to continuously follow and fulfill. However, the political nature of these issues, which require government-to-government negotiations, makes it difficult to demonstrate that these standards are met and substantiated.

As of August 12, the current standoff has cost local citrus growers more than R200 million in losses. Also, growers are likely to receive half of their expected returns on any fruit that is released, as most bins have been sitting for several weeks and therefore missed programs due to late arrivals.

Applicable from 1 January 2018, the EU Directive listed the False Codling Moth (FCM) as an EU quarantine pest and established specific import requirements. This meant that South African citrus exporters shipping to the EU market would be subject to the new conditions. Countries outside the EU may use cold treatment or other effective treatment to ensure that the products are pest free.

As of September 1, 2019, exporting countries were required to submit documentary evidence of the effectiveness of the treatment used for trade continuity prior to export.

In response to the 2018 EU False Codling Moth phytosanitary regulations, the South African citrus industry developed the FCM Management System as an alternative to post-harvest disinfestation (cold treatment).

South Africa is using integrated pest management (a systems approach) – the sterile insect technique and mating disruption – along with additional controls to ensure citrus is moth-free from the field to the packing house and 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 improvement over the years (p. 32). Seizures of FCM have been consistently low over the past three years.

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

Some refrigerators have modern technology to cool the fruit to a set temperature. But some refrigerators have outdated technology that still can’t.

Next steps

The South African citrus industry recognizes that standards are critical. It has invested in research and technology to stay abreast of changes in phytosanitary standards and support the shared capabilities needed to supply high-quality, disease-free fruit.

But setting standards can be misused. This means that they must be applied and designed transparently.The conversation

Simon RobertsProfessor of Economics and principal 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 Investigator, University of Johannesburg

This article is being republished The conversation Under Creative Commons license. read it original article.

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