A VISION FOR THE SOUTHERN HEMISPHERE FRUIT SECTOR Marta Bentancur President of SHAFFE

1. A VISION FOR THE SOUTHERN HEMISPHERE FRUIT SECTORMarta BentancurPresident of SHAFFE

3. ABOUT THE ASSOCIATION AND SHAFFE’S MEMBERS • Southern Hemisphere Association of Fresh Fruit Exporters • With over 15 years of operation SHAFFE is today representing 8 leader countries of the Southern Hemisphere • Argentina • Australia • Brazil • Chile • New Zealand • Peru • South Africa • Uruguay

4. MISSION • To encourage, promote lobbies and represent the interests of fresh fruit produced in the Southern Hemisphere for the Northern Hemisphere • Monitor legislative changes and developments affecting the markets of interest for producers in the Southern Hemisphere • Provide a forum for the discussion of issues of common interest for the fruit industry in the SH, such as logistics, packing, phytosanitary issues and information on specific markets

5. MISSION • To monitor trade access to markets and any unfair trade practice, in both the SH and the NH • Provide information about issues regarding the World Trade Organization that could affect producers and / or distributors of fresh fruits in the countries of the SH • Provide support to members in their relations with other members and with third parties

6. The fruit sector of the Southern Hemisphere: Production: 67 million tons Export: 11% THE REPRESENTATIVENESS OF SHAFFE IN CONTEXT

7. Argentina Australia Brazil Chile New Zealand Peru South Africa Uruguay Total 2.722.000 Citrus 740.500 20.682.309 317.000 20.000 737.650 2.185.000 281.500 27.685.959 Apples and Pears 1.847.000 371.000 1.112.973 1.610.000 416.000 157.950 975.125 89.992 6.580.040 Guavas, Mangoes, Papayas 4.500 59.300 3.444.000 8.000 420.000 112.500 4.048.300 Bananas and Plantains 182.000 280.000 6.972.408 1.837.384 345.000 9.616.792 Grapes 2.900.000 1.530.439 1.341.806 2.350.000 190.000 200.000 1.600.000 130.000 10.242.245 Avocados 3.600 36.000 165.000 167.000 17.000 120.000 65.000 573.600 Peaches, Nectarines, Plums 400.000 148.000 238.500 600.000 10.700 43.500 218.000 22.028 1.680.728 Ananas 3.300 110.000 2.666.358 225.000 166.000 3.170.658 Watermelons 126.000 115.000 1.947.000 87.000 2.700 67.500 65.000 12.000 2.422.200 Kiwifruit 5.000 170.000 315.000 490.000 Melons 85.000 78.000 196.000 72.000 1.100 13.000 23.000 4.500 472.600 5.400 Blueberries 68 21.375 18 1.575 28.436 Total Production 8.278.800 3.473.239 38.766.422 5.402.375 972.500 3.822.002 5.754.625 541.595 67.011.558 Production of the Southern Hemisphere Major fruit categories in tons Source: FAO 2007

8. Fruit Production in the Southern Hemisphere in thousand tons

9. Fruit Production in the Southern Hemisphere in thousand tons

10. For example… Brazilexports for $700 million with a wide variety of fruit including citrus, bananas, grapes, apples and tropical fruits Peruexceeds $300 million with grapes, avocados, mangoes, citrus and organic bananas Chile exports for about $2.500 million dollars

11. The fruit production sector is a significant generator of employment and investment in the entire Southern Hemisphere • To research, provide solutions and create a process of continuous improvement is a big challenge for the sector development

12. To update production and trade trends is essential for identifying main threats and opportunities that will serve as the basis for defining sectorial policies and strategies for competitiveness

13. What is the strategy of our sectors? • GROWTH? • KEEP MARKETS? • ACCESS TO NEW MARKETS?

14. Demands of a global market • To have new capabilities for obtaining competitive success • To go beyond the regulatory • To secure customers loyalty • To maintain leadership • To exploit new requirements (increasingly demanding) to improve competitiveness

15. The information age... • Relations with customers that preserve "loyalty" and not just "fidelity“ • Relations with other stakeholders of the fruit value chain

16. Demands of global competition • To develop new strategies for developing OPPORTUNITIES and to address THREATS • To consolidate the business through a solid market knowledge • To coordinate actions among different actors in the chain: producers, exporters, logistics and clients…

17. MARKET TRENDS IN TIMES OF CRISIS • Consumption stagnating or even decreasing • Despite lower volumes, the price also tends to decrease because of the competition pressure between retailers / discounters Low Volume + Low Price = Less Income

18. MARKET TRENDS IN TIMES OF CRISIS • Lower price while costs are rising (logistics, manpower, quality ...) => return for producers is below the costs of production • Tendency to changing attitudes of consumers: search for low price, value pack ... • Likely impact on the demand of some products such as organic

19. MARKET TRENDS IN TIMES OF CRISIS • The crisis mainly affects the food service sector (catering, transportation ...) while fruit and vegetables still maintain traditional levels • Increased consumption is estimated through eating “at home” and spending more time to “prepare meals at home”: an opportunity to develop the consumption of fresh produce?

20. MARKET TRENDS IN TIMES OF CRISIS • Fresh produce should be innovative to position itself in such a competitive scenario • The current situation is creating a threat towards greater protectionism: creating pressure to buy “local” products ... at least in the European Union

21. Main common concerns of our members • Increasing production costs and especially of human capital • Increasing social conflicts • Exchange rates Dollar / Euro ... • Climatic disturbances and their effect on production and quality of fruit • Pressure from retailers • Growing concerns about the impact of the crisis and the lack of funding • Maximum Residue Levels legislation in the European Union • Concern about tightening access conditions to, for example, Asian markets

22. Calentamiento Global: Bonos de Carbono, ¿qué son y para qué sirven? El mercado de carbono se viene desar La armonización de LMRs de plaguicidas en frutas y hortalizas está provocando en Holanda el efecto contrarioA partir del próximo del 1 de septiembre de 2008 entrará en vigor la armonización en la UE de los Límites Máximos de Residuos (LMRs) de fitosanitarios en diferentes productos, entre ellos Frutas y Hortalizas. En Holanda, esta armonización está generando exactamente el efecto contrario. Algunas cadenas de distribución están imponiendo a sus proveedores unas exigencias superiores a las establecidas en la legislación vigente, según publica el Boletín Exterior del MAPA.Toda la polémica se inició cuando varias organizaciones de defensa medioambiental publicaron en sus páginas web los resultados anuales de los controles de residuos en frutas y hortalizas, así como las infracciones aplicadas por la Autoridad holandesa de Seguridad de los Alimentos (VWA) en 2007. Dichas organizaciones realizaron unas clasificaciones por productos, supermercados y países de procedencia según especificaciones de LMRs, para información de los consumidores. Fuente: http://www.agrodigital.com Fuentes: - ProChile - CONAMA - World Bank Carbon Finance Calentamiento Global: Bonos de Carbono, ¿qué son y para sirven ?

23. What are the issues of common interest? • Market Transparency • Quality and Safety Requirements • Corporate Social Responsibility • New requirements: Carbon Footprint Labelling

24. SHAFFE – TRANSPARENCY SHAFFE provides greater transparency to the sector: – Annual report of the latest developments in each country – Consolidation of information on production: apples and pears (together with WAPA) and citrus (together with Freshfel Europe) – Weekly monitoring of weekly shipments to different international markets • Apples • Pears • All citrus (oranges, mandarins, lemons and grapefruits) • Others in development: blueberries and table grapes (Brazil's participation is a must!) • Bi-weekly abstracts are published in the SHAFFE Newsletter

26. SHAFFE – GlobalGAP Representation of SHAFFE in GlobalGAP Representation in: • CPWG (L. Benic and Philippe Binard) • Fruit and Vegetables Committee • Key issues under discussion: • Tools to avoid MRL’s exceedance • Flow of information and notification in case of exceeding the limits or unauthorised use of products and its relationship with the GlobalGAP certification

27. SHAFFE – PRIVATE STANDARDS HARMONISATION Food safety can not be a tool for competition. On the contrary, they must strictly adhere to the legislation and create trust through it • Proliferation of safety requirements: it is costly and confusing. GlobalGAP, CIES / GFSI • Position papers for a realistic harmonisation • Follow-up of WTO discussions

28. SHAFFE – ANALYSIS OF CUSTOMER RELATIONS SHAFFE analyses the relationship of its members with customers and a common approach is challenging: • Research office on ethical trade in the UK and the European Union • Ethical Trading Initiative of the Commonwealth. Support to create a buyer-seller forum on international trade • Study on the growth of sales of SH products through retailers • Discussion GFSI / CIES denouncing the proliferation of private standards and the pressure from non-governmental organisations (NGOs)

29. SHAFFE – ANALYSIS OF CUSTOMER RELATIONS SHAFFE analyses the relationship of its members with customers and a common approach is challenging: • The case of MRLs of chemical products and retailers - Germany

30. SHAFFE – FOOD SAFETY SHAFFE members monitor the actions of NGOs in the fruit chain: • Safety

31. SHAFFE – FOOD SAFETY • Sustainable production • Water (important issue for the future - water footprint) • Carbon footprint – food miles (climate change) • Social and ethical aspects • Maintaining the balance between the 3 pillars of sustainable development:

32. SHAFFE – SUSTAINABLE DEVELOPMENT SHAFFE: An important topic for the near future: • Aspects of definition (food miles / carbon footprint). Emphasis on the carbon footprint more relevant to the Southern Hemisphere • Defining and testing the methodology of calculation (several projects under way in New Zealand, South Africa, Chile and Europe) • Its revision could mean the search for greater energy efficiency and costs reduction • Aspects of labelling Importance of harmonisation to prevent proliferation of methods

33. Two initiatives for food labeling: • “Food miles”: Distance from production to final consumption and disposal of generated waste and garbage. • “Carbon Emissions”:Emissions released during the entire production chain. Amount of carbon emitted along the agribusiness chain. • Food miles • Promotes the consumption of local produce and tries to include energy costs and negative environmental externalities related to transport. • Carbon emissions • Example in grams per • ton / kilometer • Transport: • Land 207 • Maritime 30 • Air 1.206 • Ton production: • Apples • NZ: 185 • UK: 271,8 CARBON CALCULATOR - Get ahead of the game, measure your carbon emissions

34. ENVIRONMENTAL LABELING • Concerns: • Dilute the attention only on carbon emissions • Does not include water usage or amount of residues... • Lack of data for measuring • How to measure? • Cost and time • Another barrier?

35. Ongoing projects Specification PAS 2050 (Publicly Available Specification) for determining the lifecycle greenhouse gas emissions of products and services • Wines from New Zealand • Tesco has for British suppliers the logo of Assured Food Standard, Red Tractor • Tesco Products tagged with Carbon footprint label • Wal-Mart (USA): Partnership with Carbon Disclosure Project • Casino labelling of climate impact • Dole Costa Rica Carbon neutral (more efficient transportation, reforestation programmes, etc.)

36. SHAFFE – SOCIAL RESPONSIBILITY • Concept: • “a business vision that integrates to the administration of the company the respect for: values and ethical principles, workers, the community and the environment” (DERES)

37. SHAFFE – PROMOTION AND MARKETING SHAFFE Activities on promotion and marketing: • Participation in the exchange forum: • Global citrus network - Southern Hemisphere-Northern Hemisphere Teleconferences (with Freshfel) Participants

38. WHAT FOR? • To provide a reliable information system in the global market and improve transparency • To discuss matters of common interest • To provide a platform for the international citrus community to promote cooperation

39. SHAFFE – PROMOTION AND MARKETING SHAFFE Activities on promotion and marketing: • Evaluation of actions to be undertaken for the promotion of demand in the US market: • Order for blueberries • Order for «summer citrus»

40. SHAFFE – TRADE SHAFFE - International Trade - WTO Monitoring and exchange of views / information: • Multilateral negotiations - DOHA Round (Currently with few and low expectations) • Bilateral (where applicable) • Others, for example applicable to the SPS / Plant Health when it affects market access

41. SHAFFE – TRADE MARKET OF THE EUROPEAN UNION: • Differentiated tariff regimes by seasonality • Mandarins: about 12% of tariff ad valorem for Argentina, Brazil, Uruguay • Peru, Chile, South Africa • 0% Tariff

42. SHAFFE – COMMUNICATION SHAFFE and information Bi-weekly Newsletter Weekly Shipments of citrus and apples and Shipments of blueberries and table grapes just starting 2 times a year Country reports at each meeting SHAFFE website (www.shaffe.net) Current revision of communication strategy

43. SHAFFE – ANNUAL MEETINGS • SHAFFE AGM: • At the same time as PMA’s Annual Conference • 2009 AGM in Anaheim 1st October => Brazil's participation is essential! • SHAFFE Interim Meetings: • During the Fruit Logistica Fair (Berlin) • Teleconferences (citrus)

44. SHAFFE – BENEFITS FOR MEMBERS • Visibility as a collective entity of the Southern Hemisphere • Promoting cooperation and better understanding of the business development in the Southern Hemisphere • Coordinating policies and positions on issues of common concern • Facilitating the exchange of information • Forum for addressing complex challenges in food security (safety, social responsibility, sustainable development, etc) WITH THE VISION OF GROWING TOGETHER AND MAKING THE FRUIT EXPORT BUSINESS MORE EFFICIENT AND COST EFFECTIVE FOR ALL ITS MEMBERS

45. ABOUT THE ASSOCIATION AND ITS ORGANISATION • It comprises 8 major countries of the Southern Hemisphere • Argentina • Australia • Brazil • Chile • New Zealand • Peru • South Africa • Uruguay • Presidency: Rotating • Currently held by Uruguay • Argentina has the Vice-Chair • Secretariat • In Brussels, in the EU, one of the main markets • Neutrality between all 8 countries

46. I want to thank the cooperation and support of the SHAFFE Secretariat, through Mr. Philippe Binard, for this presentation

47. THANK YOU !www.shaffe.netwww