South African citrus: new EU rules are unjust and punitive

In mid-July 2022 the European Union imposed new restrictions on South African citrus imports. The new phytosanitary requirements were meant to address False Codling Moth, a citrus pest that is native to South Africa and for which there is zero tolerance in the EU.

The new regulations are a major blow to South Africa’s citrus industry as they will severely disrupt exports. The country is the world’s second largest exporter of citrus after Spain. The EU accounted for 41% of Southern African citrus exports by value in 2021. Locally, in 2021 citrus accounted for 25% of South Africa’s total agriculture exports up from 19% in 2011.

In our view, which is based on decades of engaging with EU regulations, and food exports more generally, the regulations are unfair and punitive.

Firstly, the EU gave South Africa less than a month to adapt to the new regulations. The EU measures were published on 21 June 2022, entered into force on 24 June 2022, and required that consignments arriving in Europe from 14 July 2022 onwards had to comply with the new requirements.

The South African government managed to negotiate a settlement with the EU to clear floating containers of citrus blocked at EU Ports on 11 August 2022 (3 weeks later). Nevertheless the whole process imposed additional costs on growers. At a minimum, transition measures are required. This is done to give countries time to adapt.

Secondly, since the EU first declared the False Codling Moth a quarantine pest in 2018, South Africa put in place extensive measures in line to meet the phytosanitary regulations. Its integrated pest management (systems approach) has meant significant investments in research and “learning by doing” to get the system right. There is evidence of success.

In our view, the new rules are de facto non-tariff barriers to trade. Non-tariff measures are imposed _de jure to protect consumers from unhealthy or low-quality products, but de facto they represent an increase in trade costs. _

We also believe that additional requirements will only mean diverting scarce resources and imposing new costs on growers, threatening the long-term sustainability of the industry.

Standards in global trade

Product and process standards are the main factors shaping the international trade regime. The ability to meet these standards is both a threat for producers (excluding them from profitable markets) and an opportunity (providing the potential to enter high-margin markets).

Phytosanitary standards are particularly important. The challenge is that they are determined solely by the buying party or country, with the producer having little capacity to challenge decisions on conformance. An added problem is that strong lobbies can push for standards to be protectionist barriers. This harms both consumers who pay higher prices as well as producers who are forced to apply new ways of processing.

The ever changing landscape in phytosanitary standards is characteristic of global trade in fresh fruit. Responding to it requires constant investments in research and technology development to keep up and to comply. However, the political nature of these issues, which require government-to-government negotiations, makes it difficult to prove compliance and the basis for such standards.

As of 12 August, the current hurdle has cost local citrus growers over R200 million in losses. In addition, growers are more than likely to receive half their expected returns on any fruit that is released, due to the fact that most containers have been standing for a few weeks, and have therefore missed their programmes due to late arrival.

Applicable from the 1 January 2018, the EU Directive listed False Codling Moth (FCM) as an EU quarantine pest and prescribed specific import requirements. This meant that South African citrus exporters who shipped to the EU market would be subject to new requirements. Non-EU countries could use cold treatment or another effective treatment to ensure the products are free from the pest.

From the 1 September 2019, exporting countries were required prior to export, to provide documentary evidence of the effectiveness of the treatment used for trade to continue.

In response to the EU’s 2018 False Codling Moth phytosanitary regulations, South Africa’s citrus industry developed the FCM Management System as an alternative to post-harvest disinfestation (cold treatment).

South Africa is currently using integrated pest management (systems approach) – the sterile insect technique and mating disruption – in conjunction with complementary controls to ensure citrus fruits are free of the moth – from the field to the packing house and shipment to the EU. A systems approach is a pest risk management option that integrates different measures, at least two of which act independently, with cumulative effect.

The False Codling Moth Management System was implemented for the first time in 2018 for citrus exports to the EU with continuos improvements over the years (p.32). Interceptions of FCM have been consistently low over the past three years.

The new regulations require orange imports to undergo further mandatory cold treatment processes and pre-cooling steps for specific periods. These have to be done at loading before shipping and subsequent importation.

Some cold stores have modern technology to cool down the fruit to stipulated temperatures. But a number of cold stores still have outdated technologies that can’t.

Next steps

South Africa’s citrus industry recognises that standards are clearly essential. It has invested in research and technology to keep abreast of changes in phytosanitary standards, and to support shared capabilities necessary to supply high-quality, pest-and disease-free fruit.

But the setting of standards can be misused. This means they need to be transparently applied and designed.

Simon Roberts, Professor of Economics and Lead Researcher, Centre for Competition, Regulation and Economic Development, UJ, University of Johannesburg; Antonio Andreoni, Professor of Development Economics, Department of Economics, SOAS University of London and Visiting Associate Professor, SARChI Industrial Development, University of Johannesburg, and Shingie Chisoro, Senior Researcher, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. Read the original article.