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Role of Standards in Kenya’s Horticulture Sector

Role of Standards in Kenya’s Horticulture Sector. Spencer Henson University of Guelph Canada. Key Messages…. Standards continually evolve over time Collective impact of standards Interaction between public and private standards Need to consider impact of standards in the wider context

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Role of Standards in Kenya’s Horticulture Sector

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  1. Role of Standards in Kenya’s Horticulture Sector Spencer Henson University of Guelph Canada

  2. Key Messages…. • Standards continually evolve over time • Collective impact of standards • Interaction between public and private standards • Need to consider impact of standards in the wider context • Standards can be a threat to established supply chains • Standards can create strategic opportunities

  3. Outline • Context • Kenyan fresh produce exports • Standards regime: • European Union • Compliance strategies: • Public sector • Private sector • Strategic responses • Conclusions

  4. Context • Trends in agricultural exports: • Shift from basic commodities • Export diversification • Increase in exports of fruit and vegetables • Increased role of non-traditional crops • Linked to contract production: • Large-scale • Small-scale

  5. Average Annual Growth Rates for EU Imports of vegetables, 1990-2000

  6. Context • Trends in agricultural exports: • Shift from basic commodities • Export diversification • Increase in exports of fruit and vegetables • Increased role of non-traditional crops • Linked to contract production: • Large-scale • Small-scale

  7. Kenyan Exports of Horticultural and Floricultural Products, 1980-2002

  8. Kenyan Exports of Horticultural and Floricultural Products, 1980-2002

  9. EU Imports of Green Beans, 1986-2000

  10. Evolution of Kenyan Fresh Vegetable Exports Up-market off-season vegetables Asian vegetables Non-traditional vegetables Prepared products

  11. Push Transport costs Decline in margins Increased supply-base Supply chain consolidation Pull Novel products Value-added products Supply continuity Quality standards Supply standards Drivers of Change in the Kenyan Fresh Vegetable Export Sector

  12. Comparative Freight Rates for Fresh Green Bean Exports, 2003

  13. Push Transport costs Decline in margins Increased supply-base Supply chain consolidation Pull Novel products Value-added products Supply continuity Quality standards Supply standards Drivers of Change in the Kenyan Fresh Vegetable Export Sector

  14. Standards on Fresh Vegetable Exports to the European Union

  15. Evolution of Hygiene Standards in the UK UK Food Safety Act 1990 Private hygiene standards Collective retailer hygiene standards Third party certification

  16. Evolution of EU Standards on Pesticides Predominantly Member State controls Evaluation of existing approved pesticides Establishment of Maximum Residue Levels Good Agricultural Practice standards

  17. Evolution of EU Phytosanitary Standards Member State controls Notification pests Rapid alert system Border inspection Approved Third Country authorities

  18. Evolution of EU Quality Grades Limited EU grades Private quality standards Certificate of conformity Third Country approved authority

  19. Enforcement Regimes • Border inspection • Surveillance • Regulatory actions • Private inspection • Third party certification

  20. Stringency of SPS Requirements for Fresh vegetables in Alternative Markets

  21. Challenge Facing Fresh Vegetable Exporters • Compliance Control Mechanisms • Cost

  22. Compliance Strategies:Public Sector • Phytosanitary surveillance • Plant health certification • National standard

  23. Compliance Strategies:Private Sector • Industry code of practice • Development of human capital • Facility development • Backwards integration • Intensified extension • Out-grower control systems

  24. Supply-Base for Fresh Vegetable Exports from Kenya, 2002

  25. Role of Small Producers in Kenyan Exports of Fresh Vegetables

  26. Compliance Strategies:Private Sector • Industry code of practice • Development of human capital • Facility development • Backwards integration • Intensified extension • Out-grower control systems

  27. Off-Setting Responses • Integration • Premium markets: • Countries • Customers • Value-addition • Crop diversification

  28. Kenyan Exports of Fresh Vegetables by Destination, 1990 and 2002 Very High Medium Low Low High

  29. Off-Setting Responses • Integration • Premium markets: • Countries • Customers • Value-addition • Crop diversification

  30. Kenyan Exports of High-Care Prepared Vegetables, 1997-2002

  31. Off-Setting Responses • Integration • Premium markets: • Countries • Customers • Value-addition • Crop diversification

  32. Kenya Exports of Fresh Beans and Peas, 1991-2002

  33. Conclusions • Kenya faced a range of public and private standards • Standards evolve within existing challenging business environment • Response to standards largely within private sector • Standards used as a means to strategic gain • Challenges for small-scale sector

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