In the light of ongoing concerns expressed by European citrus growers over possible contagion by citrus black spot (CBS) via imports of citrus from South Africa, with pressure from the Spanish government, on 27 May 2014 the EC announced a stricter regime of import controls. These stricter requirements include “recording pre- and post-harvest chemical treatments and mandatory registration of packing houses, as well as on-site official inspections at citrus orchards”. Samples “of at least 600 of each type of citrus fruit per 30 tonnes will need to be taken by the South African authorities”, and no distinction will be made between “citrus fruits for fresh consumption and citrus fruits for processing” in the application of controls. The Commission considered that these new measures should be sufficient to prevent the spread of CBS in the EU.
The Citrus Growers’ Association (CGA) of Southern Africa has made a commitment to adhere to the new rules and requirements, despite the cost-increasing effect of the required measures. Indeed, existing measures introduced have already resulted in a “dramatic reduction in interceptions” to “less than 0.3% of consignments shipped to Europe”, according to CGA.
CTA expressed concerns, however, that the door was left open to “additional measures”, and considered that in the long term the situation is “simply not economically sustainable nor fair, as South Africa has been singled out for special treatment by the EU in this regard”.
This view was implicitly endorsed by the UK Fresh Produce Consortium (FPC), which had actively lobbied to avoid more draconian measures. FPC maintained that the EC was failing to adopt “a consistent approach to applying control measures on different countries with regard to plant health exceedances”. FPC described the EC approach as “a lottery, rather than a risk-based approach to plant health controls”. Speaking at the beginning of May, South Africa’s Minister of Trade and Industry highlighted how the “real game in international trade, particularly agricultural trade, is now becoming standards, phytosanitary and sanitary standards”, and that – as in the case of CBS – these were becoming “a form of trade protection under another name”.
CGA has highlighted the importance of finally resolving the underlying science of the CBS issue and has called on the South African government to prioritise “a swift and amicable resolution of the CBS dispute” with the EU.
Meanwhile, South Africa’s citrus growers are exploring alternative markets in Africa, with market research studies on Angola, Ghana and Nigeria in progress. Currently about 1% of South African citrus is exported to African markets, whereas fully 40% of deciduous fruit now goes to African markets.
While the new arrangements require controls that are within the technical capacity of the South African citrus sector, questions now arise as to the commercial implications of the new measures. Not only do the new measures require additional control measures at the company level, but they also require increased levels of official controls prior to export.
Higher costs are also incurred as a result of increased sampling requirements for imports at the point of entry and, in the case of the UK, increased charges arising from moves to recover the full costs of inspections carried out. Between 1 January 2011 and 6 April 2014, standard UK inspection fees increased by around 235% (see Agritrade article ‘ UK moves to full cost recovery for SPS inspections, but no agreement yet...’, 9 June 2014).
In 2013, the CGA estimated that additional costs of between R500 and R1,000 million were incurred by the industry to ensure that South African citrus exports complied with EU SPS requirements (see Agritrade article ‘ Pressure on EC to act pre-emptively on South African citrus exports as n...’, 5 May 2014). This needs to be seen against the valuation of citrus exports to the EU of about R4 billion. It should come as little surprise, therefore, that any additional costs arising from new EU requirements are seen as threatening the long-term commercial viability of citrus exports to the EU.
With South Africa accounting for a third of EU citrus imports, the new measures could carry important market consequences within the EU, potentially raising citrus prices. This may account for why South Africa’s Minister of Trade talks of these types of SPS requirements as “a form of trade protection under another name”.