| SPORE No. 40 - August 1992 |
African and Caribbean countries pioneered the export of fresh tropical fruits and out-of-season vegetables to Europe 30 years' ego but they have since lost a substantial share of the market to new exporters from Latin America and Asia. Many ACP countries have the climate, soils, water resources and the skills to produce quality products: a determined effort is needed to win back a larger share of what is now an expanding market.
Fruit and vegetable production has a multiple role in ACP countries: as a source of food for local markets and for export; as a provider of employment and as a source of foreign exchange. A majority of countries would benefit from increasing their production of horticultural crops. This would raise national nutritional levels and provide a larger production base from which the best quality produce could be selected for export.
Several African and Caribbean countries are already engaged in exporting what at first appear to be large quantities of fruit and vegetables: Cote d'Ivoire produces 20,000 tonnes of mangoes, 200,000 tonnes of pineapples and 1.5 million tonnes of bananas each year, mostly for export; the Caribbean is also a major exporter of bananas, Kenya has developed exports of pineapples and French beans, Zambia exports mangetout peas, Burkina Faso exports mangoes and Madagascar exports litchis. However, in world trade terms ACP exports to the EC are both relatively small and heavily reliant on fruit, particularly bananas.
Of the nine million tonnes of fresh fruit and vegetables imported into the EC in 1990, 96% was fruit ando nly 10% (920,000 tonnes) was from ACP States. Of this, 46% came from the Caribbean, 39% from West and Central Africa and 15% from East Africa and the Indian Ocean and Pacific States. If bananas, on which the Caribbean countries are highly dependent, are excluded, the total tonnage exported by ACP States was 300,000 tonnes (3.3% of total EC imports), of which only 40,000 tonnes (0.45%) were vegetables.
How competitors succeed
ACP countries obviously face keen competition, in particular from Central, South American and Asian countries but also from the Mediterranean region. Under the Lome Convention ACP agricultural and horticultural exports have enjoyed an advantage, entering the EC without the tariffs levied on many products from non-ACP producers. But with the eventual prospect of a single market within the EC and the removal of tariffs, ACP exporters must be prepared to produce fruit and vegetables of the highest quality at a competitive price and to supply a consistent volume.
Mediterranean and Near-East countries have lower transport costs, being closer to Europe, but Asian and Latin American exporters are more distant than those in Africa. The success of Asian and Latin American exporters has been based on thorough market research to identify consumer preferences, funding of research to develop new, high yielding, flavoursome and visually attractive varieties, and disciplined production and investment in cold storage, transport and marketing promotion.
The mango is a fruit which has enormous potential in the European market yet the ACP share of EC imports has dropped from 40% in 1981 to 18% in 1990. Meanwhile Central and South American countries, notably Brazil, Mexico, Puerto Rico and Venezuela have increased their market share in the same period from 36% to 61%. These countries are able to supply the European market for six months of the year, long enough to build up a good business relationship with European importers, whereas the ACP season is much shorter. Major exporters are also constantly monitoring the market and are prepared to abandon varieties or product lines if they recognise that consumer demand is changing or if a competitor develops an unassailable advantage. They are also flexible enough to develop new products rapidly.
Meeting the challenge
At present 70% of ACP fruit supply to the EC consists of bananas: pineapple, citrus and coconut make up a further 27%. All other fruit, i.e. 25,000 tonnes, comprises only 3% of the total. Research into the opportunities for extending this "basket of fruit" needs to be undertaken. COLEACP, the marketing organization responsibile for trade links between ACP countries and the EC is able to assist with advice and market information. The Deputy Director, Mme C. Guichard, believes that challenges can be met and cites several successful examples, particularly the export of avocado and kiwifruit.
Several African and Caribbean countries have risen to the challenges posed by aggressive competitors. Kenya has developed horticultural exports, including French beans, strawberries, avocado, pineapple and carnations, which are now worth US$16 million/year. With the decline in coffee prices these products have become an increasingly important source of foreign exchange. Zimbabwe has developed profitable export of mangoes, strawberries, bananas, grapes, citrus and kiwifruit. Cote d'Ivoire has long been a major exporter of pineapples and Ghana is trying now to emulate its neighbour. Burkina Faso exports French beans and mango. Madagascar exports 4200 tonnes of litchis per year 1000 tonnes by air and 3200 tonnes by sea; with an annual production of 35-40,000 tonnes, there is ample scope for increasing the proportion exported.
The Agricultural Diversification Coordinating Unit of the Eastern Caribbean States, based in Dominica, is actively pursuing a diversification programme to reduce dependence on bananas, coconut and limes and the Caribbean Agricultural Research and Development Institute (CARDI) is undertaking research to broaden the base of varieties of passion fruit and citrus grown in member countries, and to develop pro auction of new product lines including carambola, soursop and sapodilla.
Unfortunately fruit and vegetable research has not been given a high priority in ACP countries over the last 30 years and also there has been a lack of training in horticulture. Dr Linda Wickham, Assistant Dean of Research at the University of the West Indies, Trinidad, believes that research, particularly in the field of post-harvest technology, is essential. She also recognizes the need to educate producers in the Caribbean to recognize that their own criteria for selection of produce - knowledge of keeping and cooking quality and taste rather than appearance - are not those of consumers in Europe, whose priorities are attractive visual appearance, consistent size and absence of blemishes.
However, researching new varieties is only a beginning. The European consumer not only has considerable buying power but is also becoming increasingly selective. It is therefore essential that any country wishing to enter that market must ensure that there is a regular supply of consistently high quality produce in pre-determined quantities and at an agreed price.
Planning for expansion
While there is an urgent need to find new varieties, and even new crops, it is essential that due care is taken not to introduce diseases or pests during transfer of seed or vegetative planting materials. Quarantine regulations must be applied and both exporting and importing countries, as well as farmers, must take responsibility for ensuring exchange of clean planting materials. Pineapple nematodes were accidentally introduced into Ghana when growers embarked on an accelerated programme of planting improved varieties developed elsewhere in the region. Tissue culture, or aerial root propagating material, would have avoided this problem but there are no facilities for tissue culture in Ghana as yet.
Sites for new plantations must be chosen with care. Mango plantations, for example, should not be established in humid zones where disease will always remain a problem. And for export crops, the distance between farm and port of exit should not be more than 100km in order to avoid long haulage and the inevitable bruising that results.
Increasingly, crops will have to be grown with very strict control over pesticide usage, especially just before or after harvest. With consumer pressure to reduce pesticide residues in food commodities and the tightening of EC laws concerning residues, alternatives to existing spraying regimes and post-harvest treatments must be developed: for example integrated pest management systems incorporating cultural and biological control measures.
In the whole chain of production from grower to consumer one of the most critical links to protect quality is post-harvest storage. For tropical and sub-tropical produce the use of chilling facilities to remove field-heat and to maintain low temperatures during storage and transport is essential. However, the temperatures involved are critical and without reliable equipment and power supplies and well trained staff, all the investment in production may be lost between field or orchard and the supermarket shelf. Nearly every exporter in Zimbabwe has on-farm coldstore facilities to remove field-heat by pre-cooling and storing at the optimum temperature to prevent physiological deterioration. And there has been heavy investment in insulated trucks and cold stores at the airport for holding produce in transit.
Multiple retailers (supermarkets) are expanding their share of the retail market throughout the EC and in the UK they now represent 50% of retail distribution. The demands set by the multiples on their suppliers are high, not only in terms of quality of the product, but also on reliability of supply, volume and delivery schedule. They also expect standards of hygiene adopted by food processing industries and, where fruit or vegetables are being pre-packed, it is essential that the packhouse environment, workers' clothing and hands and any water used for washing all meet the highest standards of public health.
Wherever air cargo capacity is available and prices are competitive, airfreight will be preferred for exporting perishable produce. However exporters should target only those countries served by direct flights; when consignments are trans-shipped onto a second flight they are inevitably subjected to a 3-5 hour period on the tarmac awaiting loading. In addition, the 'last-on' port of any cargo is vulnerable to last-minute offloads and trans-shipped consignments are the least likely to be put into coldstore facilities at an intermediate airport.
Seafreight is a lower cost alternative for less perishable products but again temperature, and even the gases in the atmosphere, have to be controlled. Packaging must also be stronger in order to survive longer journey times, dockside trans-shipments and road or rail distribution on arrival in Europe.
Finally, exporters should be aware of changes in packaging regulations in EC member countries. For instance, suppliers to Germany must use only standard pallets and these must be recyclable wherever possible. Where non-returnable pallets are used, they may be made only of untreated wood. Packaging must not include a mix of paper and plastic nor should toxic inks be used. Similar regulations are likely to be implemented throughout the EC.
Worth the trouble?
Competition is fierce and the standards demanded are high. It will not be easy for ACP countries to maintain, let alone increase, their share of fruit and vegetable exports to Europe. It may also appear easier for large-scale producers to manage production, storage, transport and marketing rather than farmers on smaller acreages. However, the rewards for successful exporters will be a share of a still-expanding market and foreign exchange to make up for reduced income from more traditional exported commodities, many of which are now in over-supply. Countries such as Kenya, Mauritius (see box) and Zimbabwe have also proved that a wide range of horticultural products can be grown to a high standard by small-scale growers: over 80% of Kenyan producers are small-scale farmers who, with effective technical services provided by government and the private sector, are prepared to accept the challenge of producing for export.
Government intervention and investment does not have to be on a large scale but it must be targeted to critical areas. It can be most effective where it plays a regulatory role and facilitates growth through horticultural research, infrastructural development, incentives and support services. In addition, the EC Commission encourages joint research projects and fosters links between ACP States and between ACP States and other countries.
In the past new export crops such as fruit and vegetables have often been considered by policy makers to be less important than food crops and traditional export commodities. Now it seems that the rewards for successful trading in fresh produce may be more attractive. But exporting is a team effort and government policy-makers, research scientists, commercial exporters and farmers must be prepared to work together. If serious attention can be given to market research, varietal development, coldstorage facilities, transport, flexibility and marketing promotion, ACP countries have much to gain.
Mauritius: cool marketing from a tropical island
AS the visitor to Maurtius drives from the international airport on the south-eastem tip of the island towards the capital Port Louis on the west coast, or past the smart luxury hotels scattered discreetly around the shores, he quickly realizes that the country has quite a challenge in catering for both its permanent and temporary populations. But the former, traditionally plantation workers on the large sugar cane estates, have responded with entrepreneurial spirit which has transformed the fresh fruit and vegetable production sector of the economy. Since 1984 exports of fruit alone have increased livefold, from 92 tonnes to over 500 tonnes and now passion fruit, avocado, melons, strawberries, litchlis and carambolas are grown as well as citrus and pineapples. Spices, such as ginger, turmeric, all spice and vanilla, all retain their traditional importance.
The incentives for Mauritius to produce its own fresh fruit and vegetables are great. Producing fruit of export quality means that high quality fruit and vegetables are available to satisfy the appetite of the tourists who come to the island. This appetite would otherwise have to be satisfied with costly imports. And top quality for tourists also means better quality and choice for the local population. These were the main reasons behind government policy to encourage exports as well, of course, as the need to earn foreign exchange. However, incentive alone is not quite enough. The government quickly recognized that thousands of growers cultivating small scattered parcels of land too steep or too poor for sugar could not, by themselves, establish the organization and infrastructure necessary to achieve consistent, high quality produce.
Individual growers, even those producing fruit and vegetables for sale from their own backyards, have organized themselves into produce groups. Megh Pillay, General Manager of the country's Agricultural Marketing Board, explains that by working with these groups the island's production can be carefully planned. Together they decide who will plant what, in what quantities and when. The Board organizes distribution of seed and offers a guaranteed market at a floor price, and this despite the fact that production is seasonal whereas demand remains steady throughout the year. It has been able to do this by building up cold storage facilities so that excess production during the season can be skimmed off, put in coldstores and then put back on the market when that market can no longer be supplied directly by the grower. Produce destined for export rather than the local market is moved from exporters" own coldstore facilities at the packing houses, along good roads in temperature controlled trucks to the air terminal. in order to complete the cold chain and avoid the problems arising from delayed or canceled flights, cold storage facilities have been built at the airport. The store has a capacity of 1680m3, which is far greater than that required for exports at the present time. Imports and goods in transit can therefore be serviced as well, and the earnings set against the cost of exports servicing.
This successful, well integrated system has supported many small producers, but has been painful for others. There is no place for those whose produce fails to reach the premium price. And growers have to abide by the rules. On one occasion the export of litchis was banned completely for two weeks, affecting everybody, because of an unfavourable report from a European importer. One grower had tried to catch the market by sending litchis extremely early in me season before they had reached the proper stage of maturity. The situation was only restored to normal after appropriate inspection and control procedures were put in place by the Ministry, of Agriculture. For, as Megh Pillay says, "the good image of Mauritius as an exporter of high value crops has to be preserved by all means".