Importance of the horticultural sector in the Region. Opportunities and Challenges

1. SECTION II. Importance of the horticultural sector in the Region. Opportunities and Challenges Luz B. Díaz Ríos-FAO, Rome

2. Results of the Preworkshop Questionnaire

3. Results of the preworkshop questionnaire Section A Expectations

4. Who takes part in this workshop? • Government institutions responsible for public policies and agricultural services. • ( Ministries, Secretaries, Heads of Horticultural Departments, Inspection Services, etc) • Private sector • Universities/Academia • Ministries of Trade • Research institutions • Agricultural Extension officers • Food and Nutrition officers • Standards setting bodies

5. Duties/responsibilities • Training and technology transfer (agricultural instructors, extension workers, etc) • Policy makers- policies and strategies for the sector • Assessment of FFV markets and promoting market linkages • Implementation of quality standards and introduction of quality standards and safety regulations • Nutrition education • Promoting farmer proactive awareness and certification against quality and safety standards specially for smallholders. • Conducting inspections and issuing phytosanitary Certificates

6. Duties/responsibilities • Design and implementation of programmes to promote developments in the horticultural sector. • Plant protection and quarantine services • Evaluate, compile and amend product quality standards. • Coordination of horticultural development programmes

7. THE APPROACH TO QUALITY AND SAFETY ISSUES…. INTER-INSTITUTIONAL AND MULTIDISCIPLINARY INTEGRATION OF PUBLIC AND PRIVATE EFFORTS

8. Expectations • well skilled in main principles and practices on food safety and quality of FFV • to have valuable information regarding the latest food safety and quality developments with regard to agricultural produce. • knowledge gained will assist in the organization and implementation of strategies to ensure proper food safety and quality for the FFV • enhance knowledge of food safety and quality assurance and acquisition of information that will • be shared with producers and other food chain actors.

9. Expectations • organize and conduct training sessions for extension staff and communities on the practices that will meet the quality and safe standards. • in collaboration with the relevant institutions to participate in enforcing compliance to the food safety standards by producers, processors, etc. • better understanding of Q & S standards in the regional and world economy. • a practical approach to food Q & S adaptable to small-scale farmers. • sharing of experiences among the countries in the region regarding quality and safety standards and how other countries have adjusted to the new EU Regulations.

10. Expectations • better understanding of the food safety concept. • increase knowledge and skills in how to manage the horticultural sector with specific reference to food safety issues and trade. • A training module or training aid that could be used to conduct training to farmers in the topic.

11. Expectations • Be able to apply the result of the workshop- put knowledge in practice. • Knowledge of certain polices/rules and regulation relating to the subject practices in other countries. • A more integrated program for the safety, quality and trade of FFV applicable to the country setting.

12. Importance of the sector Opportunities and challenges

13. Global Production • Since the 1970s, annual growth rates for vegetable supplies have surpassed cereals by 200 percent to 800 percent, with much of this acceleration occurring in the 1990s • production has occurred through increases in land areas devoted to these crops and greater investment in inputs (irrigation and fertilization), but there has still been only marginal improvement in yields for most • species (Weinberger and Lumpkin 2005). • Reported in Global Horticultural Assessment 2005

14. Global Production Reported in Global Horticultural Assessment 2005

15. Global Production • Although horticultural production has risen steadily in most regions of the world over the past few decades, the average annual growth in per capita supply of horticultural produce was negative in sub-Saharan Africa between 1971 and 2000 • (Weinberger and Lumpkin 2004). Reported in Global Horticultural Assessment 2005

16. Global Production

17. Global Production • Developing countries account for roughly 98% of the total production of tropical fruits. Africa concentrates 11% of the global production (2010). • China as the biggest world producer of FFV/ India the second one. • India, China, Brazil, Mexico, Thailand, the Philippines, Indonesia and Nigeria remain the world's largest producers of the four major tropical fruits (mango, pineapple, papaya and avocado)- 4 major TF account for 75% of the global production of tropical fruits.

18. Characteristics of FV production in developing countries • Dichotomy- commercial versus traditional horticulture • Traditional horticulture • involves rural and family agriculture, concentrating poverty significantly • high geographic dispersion • low productivity, small scales of production • low levels of technology and difficulties in access to credit, to markets and to information sources • in general, articulates poorly with the end consumer • Commercial horticulture • high incorporation of technologies and innovations, close coordinating mechanisms, high integration.

19. Characteristics of FFV production Family subsistence horticulture, contributes significantly to food security and to improving the nutritional conditions of rural populations in many developing countries.

20. Consumption • For 15 vegetables studied between 1981-2001 consumption rose on a per capita basis worldwide for all 15 categories by double digits, cabbage the lowest (21%) and eggplant the highest (148%). • The 15 categories of fruits studied had doubled digit consumption growth, except plantain 0.66% and pineapples (-21%). • FAO/WHO recommendation of FFV consumption 146 kg/capita/year. In sub-Saharan Africa 27-114 kg/capita/year. • 400 g/day minimum- Ethiopians consume on average 97 g/day. The new USDA guidelines recommend 700-1200 g/day

21. Consumption trends….promoted, among other factors, by: FFV Consumption... CONSUMER Urbanization Demographic growth Increased income/educated consumers Out-of-the-house female employment Segmentation/ Massive Market to Individual One Diversity /produce supply Added-Value products Developing new products Stricter quality & Safety market requirements

22. Market developments • high value and added-value products. • massive expansion of supermarkets (e.g. Shoprite in South Africa, East and Southern Africa, Ghana, Egypt and India) • close relations with the suppliers. • concentration of suppliers and retailers. • prices, following the competitive leader. • higher competence, more demanding market requirements in terms of quality & safety. • New coordination and communication practices between retailers and suppliers.

23. Fresh fruits and vegetables as high value chains • Higher prices than for basic products • Higher incomes demand elasticity (0.64 to 0.99) • Result of processes involving multiple and sequential investment in order to supply production on time, in form and place as required by the consumer (specialized transport and packaging, conservation, taxes and insurance, promotion, marketing, etc)

24. Per capita increases in the supply of fruits and vegetables Source: FAO (From: Changing Structure of Global Food Consumption and Trade, USDA, 2001)

25. Global trade

26. Market global share 1999/2001- market share of export value: • fresh fruit 30.6% • fresh vegetable 20.3% • processed fruit and vegetables 30.3% • fruits and vegetable juices 9.0%, • tree nuts 6.1%, and pulses 3.6%.

27. Market global share High-income regions dominate the world commerce: - Largest importers : EU, U.S., Japan • Largest exporters: EU and U.S. • Kenya, Egypt, Morocco among the 30 top exporters of fresh vegetables. • South Africa, Cote d’Ivoire and Morocco among the 30 top importers of fresh fruits.

28. Concentration of suppliers in the main FFV importing markets Top 30 exporters of FFV represent 92-95% of global trade.

29. Concentration of suppliers in the main FFV importing markets/EU MARKET Source: Center for the promotion of imports from Developing countries(CBI)

30. Trends in distribution systems/Concentration-supply and retailer side Concentration of Retail Trade Reported by CCI-2002

31. More demanding market requirements • product appearance • “SAFETY” produce • quality process attributes such as: • environmental sustainability of the production, social responsibility, etc. • traceability • As result, different quality and safety schemes have arisen (regulations, standards, certifications, brands, labels, etc.).

32. More demanding market requirements • importing markets adopting stricter safety standards for the importation of FFV. • between 1995-2000 nearly 270 sanitary and phytosanitary regulations were introduced on imports of FFV worldwide. • new scenario has effects on production practices and cost in producing FF& V.

33. Opportunities • tropical and sub-tropical products- • (Developed countries 80% of the imports- Expected annual growth of demand of 3,0-4,5%) • commercial windows for off-season products such as: asparagus, strawberries, etc. • F & V Organically produced ( market growth in the last decade 20-30%) and fair trade. • Intra-Regional trade, expanding local markets • increase in the domestic consumption

34. Importance of specialized local markets • in Kenya supermarkets are already buying three times more produce from local farmers than Kenya exports to the rest of the world • In South Africa 40% of the marketed fruits and vegetables go directly through the supermarket procurement system, 7% go to the fresh markets and then to supermarkets and 53% are sold through the fresh markets • Sub-Saharan Africa exports 1.6 million tons and imports 1.3 million tons of FFV-but produces 60 million tons Source Reardon and Weatherspoon, 2003

35. Market trends and their contribution to the competitiveness of the horticultural sector in the Region

36. Results of the preworkshop questionnaire SECTION B The horticultural sector in the Region

37. General indicators • Overall agricultural and horticultural sector’s contribution to the GDP South Africa: 3.4 % (2002), agro-industrial sector 15% GDP Eritrea: 16 % Mozambique: 23 % Ethiopia: 43% Malawi: 36 % Uganda: 0.6% of GDP is horticulture Gambia: 20-25 % . Horticulture 13% Lesotho: 16.5-18.5% Kenya: horticulture contribution to GDP 13%

38. Importance of the sector Employment generation: horticultural production creates more than twice the number of jobs that cereal production generates (Ali et al.2002) • Agriculture/horticulture key in generating national employment e.g. horticulture employs at least two million Kenyans, of whom 250,000 are primary producers (80% small scale farmers); Ethiopia farmers employed under FFV development and marketing business are nearly 8 million; Gambia 60% of women farmers are actively engaged in horticultural activities; in Uganda horticulture employs about 10% of those in agriculture); • Involves high participation of small scale farmers- e.g. in Malawi the average land holding size for farmers is usually less than 0.1ha, In Kenya 80% of total agriculture production is by small scale farmers on free hold holdings;

39. The FFV production • Expansion in horticultural production in some countries: • Kenya: 1968 less than 500 ha, today more than 250,000 ha in horticultural crops. • Wide variety of horticultural products- given by climatic conditions. However most important crops in SSA are: tomato, mango, cabbage, onion, banana, potato, pineapple, citrus, french bean, carrot.

40. Exports Dynamism of the export sector in the region: • South Africa: estimated value of horticultural exports R16000 million 2002 to R22 667 million 2004. • Kenya: in 2004 only 4% of horticultural produce was exported, 13% increase over 2003. Only few countries have been able to over come the constraints e.g. lack of market infrastructure, SSA’s marine freight capacity is 11% percent of the world’s total, air freight Less than 1% (NEPAD, 2003)

41. Destination markets • Main destination markets- EU and Middle East Countries. Kenya: 75% of exports to EU South Africa: main trading partners UK, Netherlands, Mozambique, Germany and Zimbabwe.

42. Intra-Regional trade Expansion of multi-regional supermarket chains in Africa (Kenya and South Africa)- Tremendous developments in the supply chain. • shorten the distribution chain and promoting close relationships with the suppliers (verbal agreements, contracts, etc.) • Centralized procurement systems and impacts in the intra-regional trade (import-exports). Farmers competing in at the regional level. • Stringent quality and safety standards (convergence with global ones) Challenge: to create opportunities for small-scale farmers in this highly integrated production and procurement systems

43. However... • Traditional markets still being the main distribution channel for FFV in the African countries, even in South Africa (leading the supermarket revolution). • Improvements are required: security, efficiency, grades and standards and price information by grade, hygiene, etc. Regional and Global trade are receiving most of the attention!

44. Results of the preworkshop questionnaire SECTION C SWOT ANALYSIS

45. Facing the challenges.. SWOT ANALYSIS Strengths Opportunities Weakness/ difficulties Threats

46. Government in some countries is very concerned with production of safe and quality products- Promotion of Exports • Initiatives to improve Q & S under implementation in the Region (high private sector involvement) • - FPEAK-Kenya • - EHPEA- Ethiopia • - Zambian National Farming • Programs for the promotion of the horticultural sector under implementation in the region. e.g. commercial agriculture, community gardens, etc. • Climate conditions/wide variety of horticultural crops Strengths

47. initiatives on contract farming • developments in the retail sector • EurepGap Certification • International funding organizations like FAO,USDAI, GTZ and NGOs are supporting initiatives for the sector • IPM programs under implementation • Countries working in strengthening food control systems/ re-building, empowering or creating public structures: KEPHIS, PPECB, MBS, TBS, etc. • improvements regulatory framework for food safety (legislation, inspection, etc) Strengths

48. projects to improve infrastructure • projects to improve the quality of the planting materials • improve irrigation facilities • training programs and curricula in horticulture • projects to improve laboratory capacities in food quality and safety. Strengths

49. low/lack of inter-institutional coordination/food safety system is fragmented • lack of technical knowledge in production, processing, and quality control • infrastructural bottlenecks (transport, electricity, water supply, communications, etc.) • high post-harvest loses, lack of post-harvest facilities (cold chain?) • need for more interaction and collaboration between researches and extension workers. • poor market linkages. Difficulties

50. instruments to support Q & S systems need to be established. e.g. competent authority responsible for control and inspection. • inconsistency in audits, inspection and lack of competency of some certification/inspection bodies. • low domestic consumption • domestic standards poorly developed and not operational. Difficulties