VALUE ADDING THROUGH FOOD PROCESSING, FOOD SAFETY AND QUALITY MANAGEMENT

Transcription

1 REPUBLIC OF RWANDA MINISTRY OF AGRICULTURE AND ANIMAL RESOURCES PO Box 621- Kigali; Tél/Fax: STRATEGIC PLAN OF AGRICULTURE TRANSFORMATION VALUE ADDING THROUGH FOOD PROCESSING, FOOD SAFETY AND QUALITY MANAGEMENT By Ms BYANYIMA MARTHA, Consultant Under coordination of Groupe d Expertise, de Conseil et d Appui au Développement (GECAD). Kigali, October 2004

2 TABLE OF CONTENTS ACRONYMS...II EXECUTIVE SUMMARY...III I. INTRODUCTION...1 II. STUDY OBJECTIVE...2 III. APPROACH TO THE STUDY...2 IV. DIAGNOSIS OF THE RWANDA SITUATION: FOOD PROCESSING AND MARKETING CONSTRAINTS RELATED TO FOOD PROCESSING AND MARKETING OPPORTUNITIES RELATED TO FOOD PROCESSING...4 V. DIAGNOSIS OF THE RWANDA SITUATION: FOOD SAFETY AND QUALITY MANAGEMENT...5 VI FOOD SAFETY AND QUALITY MANAGEMENT IN INTERNAL MARKETS CONSTRAINTS RELATED TO FOOD SAFETY AND QUALITY MANAGEMENT IN INTERNAL MARKETS OPPORTUNITIES CREATED BY IMPROVED FOOD SAFETY AND QUALITY MANAGEMENT IN INTERNAL MARKETS FOOD SAFETY AND QUALITY MANAGEMENT IN EXTERNAL (EXPORT) MARKETS Significance of international standards in external (or export) markets Hazard Analysis Critical Control Point (HACCP) system EUREPGAP CONSTRAINTS RELATED TO INTERNATIONAL STANDARDS AND EXPORT MARKETS OPPORTUNITIES RELATED TO COMPLIANCE WITH THE WTO SPS AGREEMENT (INCLUDING USE OF INTERNATIONAL STANDARDS)...10 RECOMMENDED STRATEGY: THE VALUE ADDING STRATEGY...11 REFERENCES...15 i

3 ACRONYMS ADAR: Agribusiness Development Assistance in Rwanda AGOA African Growth Opportunity Act CAC: Codex Alimentarius Commission CIAT: International Centre for Tropical Agriculture CITT: Centre for Innovation and Technology Transfer COMESA: Common Market for East and Southern Africa EAC: East African Community EU: European Union EUREPGAP: Euro Retailer Producer Group (EUREP) GAP standard FAO: Food and Agricultural Organisation GAP: Good Agricultural Practice HACCP: Hazard Analysis and Critical Control Point IOE: International Office of Epizootics ISAR : Institut des Sciences Agronomiques du Rwanda KIST: Kigali Institute of Science, Technology and Management MINAGRI: Minister of Agriculture and Livestock MINICOM: Minister of Commerce, Industry and Tourism PRSP: Poverty Reduction Strategy Paper RBS: Rwanda Bureau of Standards SADAC Southern African Development Cooperation SPS: Agreement on sanitary and phytosanitary measures TBT: Technical Barriers to Trade agreement USAID: United States Agency for International Development WHO: World Health Organisation WTO: World Trade Organisation ii

4 EXECUTIVE SUMMARY One of the most critical challenges faced by Rwanda s agricultural sector is orienting production and marketing to the consumer. Consumers demand a diverse range of high quality safe products. Product diversification through food processing, improved quality and safety supported by relevant market studies is one of the means through which to create a market oriented agricultural sector. Whilst Rwanda Government s poverty reduction strategy recognises that under the World Trade Organisation (WTO), quotas will be eliminated and tariffs will continue to decline, a trend that will in the long run enable access of developing countries agricultural products into world markets, it fails to recognise that countries still have to overcome the stringent food safety and quality standards (non tariff barriers) in developed countries markets. A study was commissioned by the Ministry of Agriculture and Livestock (MINAGRI) to develop a strategy that would enhance the competitiveness of Rwandan food products in domestic, regional and international markets. Study methodology included participatory field studies to assess constraints at production/enterprise, institutional and policy levels complimented with review of relevant literature. The food processing sector is constrained by: inadequate processing methods, lack of access to equipment and packaging, weak linkages with producers and poor marketing skills. The sector remains largely unexploited, allowing imported foods to dominate internal markets. The study recommends the establishment of value added food chains that are consumer oriented and therefore competitive by carrying out the following actions: Establishing a centre of excellence in food process and product development to provide training and technical support in improved processing methods, new product development, food safety/quality management (including traceability) and marketing skills. Carrying out market studies in internal markets to identify niche markets, market requirements and consumer expectations. Establishing producer owned food processing enterprises. Strengthening producer/processor relationships. Establishing the association of food processors, suppliers of ingredients, and packaging, equipment manufacturers and business service providers. Collaboration with technology research and development centres to develop and disseminate appropriate technologies. Whilst government s mid and long term strategy is to develop agricultural exports, there is no strategy in place to address non-tariff barriers. Use of international standards is often misunderstood to mean replication of state of the art northern standards. Overcoming non-tariff barriers requires translation of international standards into Good Agricultural Practices (GAP) and systematic integration of good practices into food production, processing and distribution. The following actions are recommended: Reviewing existing food safety infrastructure and problems to establish national priorities with regard to food safety management on domestic and export supply chains. iii

5 Translating international standards (EURPGAP and HACCP) into producer/processor codes of practice and adopting them into national standards through a bottom up approach and stakeholder participation. Developing GAP and HACCP training programs for small scale producers and processors and incorporating this into MINAGRI s extension programs. Develop a national organic certification program. iv

6 I. INTRODUCTION Pillars of Rwanda s Vision 2020 include: (i) transformation of agriculture into a productive, high value, market oriented sector; and (ii) development of an efficient private sector spearheaded by competitiveness and entrepreneurship. Whilst developing countries enjoy comparative advantage in the abundance of raw materials and inexpensive labor, fertile soils etc, it is important to note that all these factors are easily imitated and therefore impossible to sustain in a competitive environment, especially as technological advances shrink distance between countries. Reliance on natural resources alone cannot create competitiveness. Orienting production, marketing and distribution towards the consumer remains the only means by which a country can become competitive. One of the most critical challenges faced by Rwanda s agricultural sector is orienting production and marketing to the consumer, both internally and externally. Consumers demand a diverse range of high quality safe products. Product diversification through food processing, new product development, improved quality and safety supported by market studies is one of the ways through which to create new products and expand market opportunities. Integrating food processing, new product development, food safety and quality in the management of food supply chains increases competitiveness and contribute significantly to the establishment of sustainable food supply chains that are consumer oriented and therefore competitive. Both the PRSP and the National Investment Strategy emphasise and prioritise agriculture as the primary engine for growth of the Rwandan economy and poverty reduction. With respect to exports, the PRSP recognises that under the World Trade Organisation (WTO), quotas will be eliminated and tariffs will continue to decline, a trend that will in the long run enable access of developing countries agricultural products into world markets. The eventual phasing out of preferences is mentioned as likely to have negative impacts on African countries currently benefiting from the US and EU preferential trade arrangements. However, the PRSP fails to recognise that preferences such as AGOA are based on tariff reductions and that while tariffs are falling, non-tariff barriers seem to be increasing and countries still have to overcome the stringent food safety and quality standards (non-tariff barriers) in major export markets of developed countries. Whilst the medium and long term goals of Rwanda are targeted towards sustainable export of value added food and agricultural products, there is no strategy in place to establish appropriate food safety / quality management systems, designed to meet food safety requirements in importing countries in order to overcome potential nontariff barriers. This paper recommends strategic actions by the Government of Rwanda (through MINAGRI) to achieve value added food supply chains. A strategy that will in the long run increase the competitiveness of local food products in internal and external markets. 1

7 II. STUDY OBJECTIVE The specific objectives of this study was to develop a value adding strategy through food processing, new product development, food safety and quality management, for both internal and export markets. III. APPROACH TO THE STUDY The study reviewed literature obtained from development agencies, particularly FAO, USAID and MINAGRI to analyse food processing, food safety and quality issues that are of relevance to Rwanda. Interviews were conducted with exporters, MINAGRI and development agencies to assess major constraints in the area of food safety and quality management. Challenges and constraints faced by Rwandan producers, with respect to food processing, food safety and quality management were assessed through field participatory studies conducted concurrently with this study. The study synthesised information obtained to diagnose the situation in Rwanda with respect to constraints and existing opportunities. The recommended strategy is demonstrated with maracuja as an example. The result is a value chain model that can be applied to other commodities. IV. DIAGNOSIS OF THE RWANDA SITUATION: FOOD PROCESSING AND MARKETING Increasing production is one approach to improving farm incomes and food availability, but an additional strategy with considerable promise is that of adding value to agricultural produce. Improved post-harvest handling, processing and marketing achieves value added products and is perhaps the most viable means by which to reduce poverty and improve rural livelihoods (about 90% of the rural population in Rwanda thrives on the agricultural sector). Food processing, and marketing is important for the following reasons: a) It enables effective substitution of imported food products. b) It adds value and increases farmers returns on their produce c) It expands market opportunities d) It improves shelf life to overcome seasonality and perishability e) Food processing enterprises established in rural Rwanda have potential to generate off farm employment and decrease dependence on agriculture. f) Post harvest processing, handling and marketing, increases food availability at household and community levels, and thus contributes to food security. 2

8 4.1. Constraints related to food processing and marketing Rudimentary technologies. Majority of small scale food enterprises operate with rudimentary technologies. There is insufficient capacity to acquire or fabricate food processing equipment locally. Capacity to develop prototype food grade equipment is available at the Centre for Innovation and Technology Transfer (CITT) at KIST. This resource is however not utilised efficiently in terms of transferring skills and technology to local artisans. Inconsistent quality and quantity. The existing medium scale processing plants, lack consistent supply of raw milk in the desired quality and operate well below the installed capacity (an average of 25%). An example is drawn from the dairy sector, where in addition to insufficient production, processors also register poor quality and high rejection rates during sourcing. Safety and quality constraints. Safety and quality problems are related to inadequate milk collection infrastructure, poor handling during milk production, collection, processing and distribution. There is little effort to integrate good practices in milk production and collection. Most processing facilities have not established modern food safety/ quality management systems, unlike similar establishments in the region, which have full fledged HACCP based food safety/quality management systems and efforts are underway to introduce GAP in local food supply chains. Poor linkages between producers and processors. The major constraint faced by medium scale processing establishments is the weak linkage between producers and processors. An example is drawn from the dairy sector, where milk production is largely by disorganised small scale producers, who have no formal relationship with the processors, resulting in unreliability of supply in terms of quantity and quality. Ultimately, this translates into high operational costs that processors pass on to consumers. Lack of innovativeness and product diversification. There is lack of innovation and product development in the food processing sector. For example, while similar dairies in the region turn out at least four dairy products, the current milk processing establishments have not been able to diverse product range because of lack of technical know how and expertise in new product development. Lack of technical expertise. Sorwatom - a tomato processing plant located in Kigali has not been in operation for nearly ten years because of obsolete technology and lack of technical expertise. Inadequate artisanal skills. Local artisans are not adequately equipped with tools and skills to repair or maintain the existing food processing equipment. Some equipment that was originally donated to women s associations has become obsolete because no mechanism was put in place to sustain repair and maintenance. Inadequate supply of appropriate packaging. Local supply of packaging materials is inconsistent in terms of specifications and quantities. Many small scale processors rely on imported materials from Kenya and South Africa. This source is however unreliable and often small scale processors resort to re-used containers (e.g. whisky bottles for honey), which is not only illegal but undermines product presentation, quality and safety. 3

9 Poor processing methods. Majority of small scale food enterprises use poor processing methods, resulting in food products of inferior quality. Poor market analysis. Small scale food business operators often do not carry out market studies prior to the establishment of the enterprise and think they can produce and sell as they wish. There is generally little effort to analyse market requirements and consumer expectations. As a result, production is not market oriented and products do not meet consumer expectations. These findings agreed with a study carried out in Zimbabwe in 2002 : Access to appropriate technologies, skills and market information remains the most critical challenges for the small scale food processors in Rwanda Opportunities related to food processing Improving food processing methods and developing new products. Local capacity to process high quality food products is still lacking and the country still imports large quantities of processed foods. This implies that there is an internal market that can be exploited by local food business operators. The food processing sector remains largely unexploited and virgin, which is itself an opportunity. Through public/private sector partnerships, it is possible to establish a sustainable supply of locally processed food products. One possible action is public investments in a food process and product development centre to support local entrepreneurs with training and technical assistance in: o Improved food processing methods. o Researching and developing new and improved quality products. o Carrying out market studies and consumer tests. o Building consumer preferences and tastes into process and product development. o Establishing modern food safety/quality management systems. The result would be a diverse range of locally processed food products that are competitive in domestic and regional markets. Support to establish such a centre should be sought from KIST, where there is an established Food Science Department. Additional support could be sought through partnerships with institutions abroad. The author is well versed with a similar project in Uganda that is being established with support from UNIDO. Establishing producer owned enterprises. Well organised producer organisations have an opportunity to establish their own food processing enterprises. Producers could thereafter seek partnerships with private companies that have relevant expertise, whilst retaining substantial share holding. The most successful food enterprises worldwide are those where producers have a stake. Well established production systems, owned and sustained by producer organisations are enough incentive to attract investments into the food processing sector. Establishing linkages with centralised food processing units. The alternative to setting up producer owned enterprises is to forge partnerships with the existing food companies. Central processing plants such as Inyange dairies are not formally linked to producers. Supply of raw materials is through informal channels and is often not in adequate quantities or quality. Such high operational costs usually force processors to squeeze producers to the lowest prices. There is an opportunity for small scale producers to establish formal business relationships with private companies 4

10 V. DIAGNOSIS OF THE RWANDA SITUATION: FOOD SAFETY AND QUALITY MANAGEMENT 5.1. Food safety and quality management in internal markets Food and water borne diseases are major public health problems worldwide and an important cause of malnutrition, in infants and young children. Food safety and quality management systems control food safety hazards and ensure safe food supplies for a well nourished and healthy nation. In addition, food safety and quality management often reduce post harvest losses and increase food availability to enhance food security. Integrating food safety and quality in food supply chains increases and sustains the supply of quality safe foods in internal markets Constraints related to food safety and quality management in internal markets Constraints related to food safety and quality in internal markets is best illustrated by the case of the tourism industry in Zanzibar. By 2001, the tourism industry in Zanzibar was growing at a rate of about 16% per annum. However, much of the food consumed by tourists including fresh fruits and vegetables was imported from Kenya and South Africa and sometimes Europe. Anxious to reverse the trend, Zanzibar Tourism Commission conducted a study 1 to assess constraints to local food sourcing. One of the major constraints was found to be unreliability in the supply of quality, safe food in the right quantities. Similarly, Rwanda tourism industry is expanding and international hotels are being established to accommodate the increasing number of tourists, conference goers and travellers. Tourists and travellers from developed countries are made aware of food safety risks in Rwanda well in advance. Increasingly, the way a country manages its food safety problems will determine the benefits derived from tourism. Already, there are indications that major hotels and restaurants in Rwanda source nearly 50% of their meat and fresh produce from Uganda, Kenya and South Africa, because local foods do not meet the desired safety and quality standards Opportunities created by improved food safety and quality management in internal markets Creating niche markets for local food products in major hotels and restaurants. The growing tourism industry in Rwanda has opened new markets for local food products, both fresh and processed. However, small scale producers often fail to compete against high quality imported foods because they lack skills and information about market requirements. Supporting producers with market studies and relevant training and technical assistance in food safety and quality would enable them to exploit the existing market opportunities. 1 Integrated Tourism Development Project, Ministry of Trade, Industry, Marketing and Tourism, Zanzibar,

11 5.4. Food safety and quality management in external (export) markets Obligations on food safety and quality are entrenched in the World Trade Organisation (WTO) Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) agreements 2. The agreements place considerable obligations on both importing and exporting countries to strengthen their food control systems, to implement and enforce risk-based food control strategies and to use international standards where appropriate. The WTO SPS agreement refers to the standards developed by the Codex Alimentarius Commission (CAC), a joint FAO/WHO intergovernmental body and the International Office of Epizootics (IOE, for food borne diseases of animal origin) as the reference international standards. The agreement requires member states to harmonise national standards with CAC and IOE standards, guidelines and recommendations Significance of international standards in external (or export) markets Food safety and quality constraints in external markets are related to implementation of international standards. International standards that are of relevance to Rwanda are food hygiene standards/hazard Analysis Critical Control Point (HACCP) systems, EUREPGAP and organic certification Hazard Analysis Critical Control Point (HACCP) system. The CAC s International Code of Practice on General Principles of Food Hygiene 3, which has adopted the Hazard Analysis Critical Control Point (HACCP) system - A scientific and structured system which identifies, evaluates, and controls hazards that are significant for food safety. As a result, HACCP has become law in most developed countries such as Europe and the United States. For example, the current EU Hygiene Directive5 specifies that HACCP principles must be applied by the responsible persons during preparation, processing, manufacturing, packaging, storing, transportation, distribution, handling or offering for sale or supply of foodstuffs. All food commodities, including coffee are included in the definition of foodstuff: any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans 4. The regulation initially focused on primary production within the EU. Currently, the EU institutions are involved in a major discussion whether HACCP obligations also apply to primary production. The latest view can be summarised as not yet but most probably in future. Rwanda s exports, including coffee may in future not be able to access the EU market unless HACCP systems are established and managed from production through to marketing and consumption. Because of the importance assumed by HACCP in international trade, many developing countries, including Rwanda have adopted HACCP as a national standard. Other African countries such as Uganda and Kenya have incorporated 2 WTO international trade agreements that apply to food and agricultural exports. 3 CAC/RCP , Rev. 3 (1997), Amended Article 2, EU Regulation 178/2002 6

12 HACCP in national food law. However, apart from having it as a written law or standard, many countries are still far from implementing effective HACCP systems. Provisions of the SPS agreement provide policy tools that government can use to harmonise national standards with those of key trade partners. Regional trade requires among other things, harmonisation of food standards. EAC and SADAC countries are harmonising national food standards to remove non-tariff barriers impending regional trade (maize standards were recently established by East African countries). It will not be possible for Rwanda to compete in regional markets like COMESA unless national food systems and standards are harmonised to establish equivalence with trade partners in the region EUREPGAP New concept such as Good Agricultural Practices (GAP) have evolved in recent years to become international standards in the context of a rapidly changing and globalizing food economy and as a result of the concerns and commitments of a wide range of stakeholders about food production, food security, food safety and quality, and the environmental sustainability of agriculture. Stakeholders include consumers, governments, food processing and retailing industries and farmers, who seek to meet specific objectives of food security, food quality, production efficiency, livelihoods and environmental benefits in both the medium and long term. GAP offers a means to help reach those objectives. EUREPGAP is a private sector, voluntary standard but mandatory in the sense that it is enforced by the market. GAP applies available knowledge to address environmental, economic and social sustainability for on-farm production and post-production processes resulting in safe and healthy food products. Many farmers in developing countries already apply GAP through sustainable agricultural methods such as IPM (Integrated Pest Management), integrated nutrient management and conservation agriculture. These methods are facilitated by supportive government policies and programmes. Farmer associations have to implement a farm assurance scheme, which would be benchmarked against EUREPGAP standards (existing standards include fresh horticultural produce and green coffee). If the farm assurance scheme is accepted as equivalent, it achieves EUREPGAP certification. It is also possible for a so-called "Produce Marketing Organization" (PMO) to get a group certification. A PMO can be a farmers organisation or other group of growers that have a legal entity that takes over responsibilities of EUREPGAP implementation through an internal control system. Detected non-compliance of one farmer in the group may lead to decertification of the whole group. Organic standards and certification. Organic production is holistic management of the agro-ecosystem, emphasizing biological processes and minimizing the use of non-renewable resources. Although the terms "organic", "ecological" or "biological" have developed in Europe and North America to distinguish organic from conventional agriculture, many low-input traditional agriculture systems in other parts of the world are also de facto organic systems. In this respect the term "organic by default" has been introduced, and even "organic by neglect". However, these terms do give the false impression that any 7

13 agriculture systems in which no agrochemicals are used would automatically comply with organic standards, which is not necessarily the case. Organic standards cover all crops and almost all livestock. Standards for fish farming, bee-keeping and harvesting of wild products are increasingly being developed by the various standard-setting bodies. Organic standards for plant production typically include: criteria for conversion periods; seeds and propagation material; maintenance of soil fertility through the use and recycling of organic materials; and pest, disease and weed control. The use of synthetic fertilizers and pesticides and of genetically engineered organisms is prohibited (the use of GMOs should be restricted in countries that are promoting organic production). There are also criteria for the admission and use of organic fertilizers and natural pesticides. Consumer demand for organically grown products has increased the importance and use of organic standards and certification in international trade. Developing countries are competing for the ever growing organic market in developed countries. However, various constraints are an impediment to organic certification and market access. Creating and sustaining demand for Rwandan food products on domestic, regional and world markets relies on building the trust and confidence of importers and consumers in the safety and integrity of the national food supply chain, particularly the way food safety, social and environmental issues are managed. Establishment of food safety/quality management systems based on international standards would provide such assurance. However, several factors at policy, institutional and micro levels are constraints to the achievement of effective food safety and quality management in national food systems Constraints related to international standards and export markets Constraints at policy level National food safety strategy with respect to domestic and export requirements is not clear. Food safety interventions seem to be based on mere perceptions or what is assumed to be the risk; there is no scientific approach to risk management. Yet, it is important that public resources are directed at risks that have been scientifically and objectively determined. For example there is no need to enforce international standards when clean water and basic sanitary facilities are still lacking. In some situations, it may be that public resources are better spent targeting sanitation investments to improve food handling and processing. The main constraint faced by developing countries is when the use of international standards is interpreted to imply blanket imposition of state of the art northern standards on developing countries economies. This is a very simplistic interpretation of the WTO SPS agreement. The agreement recognises countries sovereignty in establishing standards that will achieve the chosen level of health protection for its population as long as there is scientific evidence relating the standards to the desired public health output. It also provides a framework that prohibits or limits the use of standards as non tariff barriers. It is therefore possible to develop national standards that are compliant with international standards and implement them within the SPS framework. However, developing countries are largely constrained in their capacity to interpret provisions of the agreement, to develop scientifically derived standards integrate them in national food safety systems and support them 8

14 with scientific risk assessment. Secondly, standards have to be implemented through an appropriate legal and regulatory framework. Establishing such a framework is a prerequisite for public action. However, the existing legal framework is still deficient and does not comply with international trade requirements stipulated in the WTO SPS requirements. Food control activities are fragmented between the Ministry of Health, the Ministry of Agriculture and the Ministry of Commerce without any clear coordination mechanism. The result is scattered interventions that are not harmonised and prioritised on the basis of scientific risk assessment, duplication of efforts and sometimes conflicts during implementation. Constraints at institutional level The administrative arrangement of food control activities is not clear. For example what is the role of districts and provinces and what is their relationship with the central authority? There does not appear to be any linkage between laboratory work and inspection systems, there are no clear linkage between activities at central and decentralised levels. Yet, one of the requirements of an effective food safety system is to have a clear line of command between the central authority and decentralised units, particularly in inspection management. Rwanda Bureau of Standards (RBS) laboratories and other laboratories in the country are carrying out food analysis work but this work is not linked to risk management. Results of such analysis cannot be basis for taking risk management decisions and are not credible outside Rwanda because majority of them have not established Good Laboratory Practices (GLP) as required by international standards (e.g. ISO 17025). Attempts have been made by Rwanda Bureau of Standards (RBS) to develop national standards that are harmonised with CAC standards. However, lack of technical and institutional capacity to control and ensure compliance, essentially makes the standards ineffective. The bureau has an enforcement role which seems to be in conflict with the role of the Ministry of Health enforcement arm There is general lack of human resources to undertake risk assessment studies, to develop harmonised national standards and to conduct inspections or audits of international standards such as HACCP or EUREPGAP. There is limited human resource and physical infrastructure e.g. laboratories to support the development of national organic certification programs and have them internationally accredited. Food safety research is still inadequate, resulting in absence of data upon which to base informed policy decisions. Weak disease surveillance programs, leading to rampant food borne and zoonotic diseases (animal diseases that are hazardous to human health). Constraints at micro level Production systems are comprised of small scale producers and informal markets that are not informed of food safety and quality standards. There is lack of information and awareness about food safety. 9

15 Consumers are more concerned about the access side of food and have no concern about food safety, though lack of food safety can seriously compromise nutrition and food availability. Inadequate infrastructure and support systems such as portable water, cooling and storage facilities in rural areas. Unregulated use of pesticides, fungicides and herbicides. Unregulated use of fertilisers. EUREPGAP is a costly venture because of third party certification and training costs. Individually small scale producers cannot even make a start. A study by ADAR/USAID agricultural project assessed food safety, quality and environmental constraints to various export oriented agribusiness companies supported by the project 5 noted that: a. The ability of ADAR clients to enter and remain competitive in export markets are increasingly determined by their familiarity with and application of international standards for quality, safety and environmental responsibility (for organic products). b. Specialty and high-value markets are particularly sensitive to consumer and business -to business demands for products that are safe and healthy (food safety and quality standards), and are produced in a socially and environmentally responsible manner (social and environmental standards). c. There is shortage of basic enterprise consulting in Rwanda, as well as almost complete absence of quality and environmental management systems that respond to international standards (e.g., ISO 9002/14001). Dependency on expensive offshore auditors and implementation consultants is a serious cost barrier for many exporters Opportunities related to compliance with the WTO SPS agreement (including use of international standards) EUREPGAP has had huge impact on the African continent, opening high value export markets for fresh produce. This trend may create incentives for the adoption of GAP by farmers as long as they have the capacity to respond. Developing and implementing a GAP program would help to build the necessary capacity. Translation of international standards (HACCP and EUREPGAP) into producer codes of practice and integrating good practices in national food systems enables the development of national standards through a bottom up approach and stakeholder participation. Compliance with the SPS agreement opens regional and international trade opportunities, supports tourism and enhances the competitiveness of local food products on internal and external markets. By commissioning this study, MINAGRI has prioritised food safety, creating an opportunity to mobilise national resource towards building national SPS capabilities. 5 Rwanda: Quality and Environmental Management Incentives for Agricultural Trade Chemonics International Inc,

16 By addressing food safety problems from the source (production), Rwanda will establish risk based approaches to food chain management and will in future not have to address food safety as a corrective measure like was the case in East Africa when the EU placed a ban on fish from Lake Victoria because of inadequate food safety controls. The three East African countries had to work backwards and bring national food safety systems up to date with SPS requirements in order to have the ban lifted. Meanwhile, countries lost export revenue and thousands of fisherfolk lost their sole source of livelihood. VI. RECOMMENDED STRATEGY: THE VALUE ADDING STRATEGY The strategy envisaged is one that will enhance the competitiveness of Rwandan food products on local, regional and international markets by incorporating value adding operations in commodity supply chains. Recommended strategies may include: 1. Formation of strong producer groups. Specific actions may include: a) Establishing producer owned enterprises or establishing linkages with centralised food processing units. b) Establishing an association of food processors food ingredients, packaging and equipment suppliers as well as business service providers for information sharing and access to services. 2. Addressing potential non- tariff barriers in external markets by complying with the WTO SPS requirements. Specific actions may include: a) Developing food safety policy. Reviewing food safety infrastructure and problems to establish national strategy with regard to domestic food safety and food safety for export markets. b) Updating the existing legal and regulatory framework to reflect new and emerging food safety concerns in internal and external markets, to define roles and responsibilities of various government agencies with food safety responsibilities, to establish the national food safety agency as a coordinating body. c) Translating international standards (EURPGAP and HACCP) into producer/processor codes of practice. d) Developing and implementing GAP and HACCP training programs through producer groups and associations. 3. Developing national capacity in organic food production and exports by: a) Promoting organic production. b) Developing a national organic certification program c) Obtaining international accreditation for the national organic certification program. 4. Diversifying processed foods through new product development, food safety and quality management. Specific actions may include: a) Establishing a centre of excellence in food process and product development to provide training and technical support in improved processing methods, new product development, packaging and 11

17 product diversification, food safety/quality management systems, including traceability requirements. b) Carrying out market studies to identify market requirements and consumer expectations. 5. Developing local capacity to develop appropriate technologies e.g. agroprocessing equipment, tricycles/trolleys to ease rural transport. Specific actions include: a) Collaboration and support to technology research and development centres and local artisans to facilitate the dissemination of appropriate technologies. 6. Establishing appropriate food safety/ quality management in national food systems. Specific actions may include: a) Translating international standards into producer/processor codes of practice and adopting them into national standards through a bottom up approach and stakeholder participation. b) Developing and implementing GAP and HACCP training programs for small scale produces and processors. The recommended strategy is demonstrated with maracuja as an example. ANNEX 1 is a graphic illustration of the maracuja value chain, which is further elaborated below. The concept can be applied to other commodities. PROCESS 1: Formation of strong producer groups at village level This should be the first step in the process of developing a value chain. Maracuja producers are identified and organised into groups. Producers are trained in group formation and business management. The training program may also include: a) Record keeping, simple business transactions, pesticide applications, storage practices etc b) Pooling production and community resources. c) Negotiating contracts d) Production planning e) Supplying quick alert information on crop performance. Training should be provided by agri business trainers, provided by MINAGRI or other institutions with appropriate training programs. The output should be strong producer organisations capable of engaging in formal business transactions. PROCESS 2: Integrating GAP in production, harvesting and storage MINAGRI supported by KIST, ISAR and CIAT should develop a GAP training program drawn from EUREPGAP protocols. The idea is not to replicate the standard but to translate it into a training program that is simple to implement and has measurable outputs. Through MINAGRI extension arm, producers should be trained to integrate GAP in the production, harvesting and storage of produce. The result is a pool of trainers in the community who can be drawn upon as resource persons whenever need arises. Other inputs such as credit and improved seed varieties could be provided by micro finance institutions and ISAR respectively. PROCESS 3: Transportation of maracuja fruit to a centralised processing unit Free movement of goods is usually constrained by poor roads and lack of efficient means of transport. MINAGRI should support the development and dissemination of appropriate technologies such as push carts or tri cycles and trolleys to facilitate rural transport. However, it is important to note that all equipment should be designed to enhance the desired standards of quality and safety. Specifications for this and other requirements should be designed into the technology with support from CITT/KIST - 12

18 the centre for technology research and development. The technology design should be availed to local workshops and the private sector for replication and further dissemination to producers. PROCESS 4: Sorting and grading Sorting and grading is necessary to ensure that good quality fruit does not go for the same price as low quality fruit. At this stage, it should be possible to separate high value fruit for export from low value fruit for the domestic and regional markets. PROCESS 5: Packaging Grade A maracuja fruit for export Packaging for export is a major constraint and one way to go about it is to establish formal linkages with local exporters. The local exporter provides the packaging and handles all documentation and shipping logistics. The benefits derived from organised and consistent production in the right quantities and quality provide incentives for local exporters to sustain business operations and offer competitive prices. PROCESS 6: Processing Grade B maracuja fruit into fruit concentrate for local and regional markets Maracuja concentrate is popular on domestic and regional markets. However, processing methods are in most cases rudimentary, resulting in products of inferior quality. MINAGRI in collaboration with technical institutions such as KIST and ISAR should establish the Process and Product Development Centre to provide training and technical assistance in food processing, new product development and packaging. PROCESS 7: Cutting and deseeding maracuja fruit by hand In small scale operations, this is usually a manual operation and care must be taken to ensure that contamination with potential hazards is controlled. Training in food hygiene and HACCP principles is very essential and should be a provided to all small scale food processors. MINAGRI should facilitate the development of food hygiene and HACCP training programs. Support for this could be provided by KIST Food Science department. PROCESS 8: Pulping In small scale operations, pulping is usually a mechanical process. The design of fruit pulpers must meet the desired food safety standards. Locally fabricated pulpers are often fabricated from aluminium and are defective in design. Surfaces that get in contact with food must be made out of stainless steel. MINAGRI should collaborate with CITT/KIST technology research and development centre to develop and disseminate appropriate designs. PROCESS 9: Pasteurisation Pasteurisation is a heat treatment process at pre determined temperatures and time. The heat treatment process is designed to render the product safe and extend shelf life. It is therefore a critical step, without which processing is incomplete. However, rural set ups are usually constrained by lack of conventional energy sources such as hydro powered electricity to run pasteurising equipment. Alternative energy sources like solar energy and micro hydro should be explored and appropriate pasteurising technologies designed and adopted for use in rural Rwanda. Support for this should be provided by CITT/KIST where renewable energies have already been exploited for other applications such as lighting and cooking. 13

19 PROCESS 10: Sourcing preservatives, packaging and other raw materials Small scale processors are usually constrained in sourcing packaging, food preservatives, and other ingredients. A viable option that has been tried in other countries would be to support small scale processors to establish formal relationships with local importers, who would then be provided with packaging specifications and encouraged to import packaging and other inputs in bulk. PROCESS 11: Packaging and filling Small scale packaging machinery is available and can be imported. The association of small scale processors should maintain a data base of equipment providers. Centralised packaging units should be explored as a mid-term strategy for processors who may wish to pull resources and share processing facilities. 14

20 REFERENCES 1. Chemonics Int., Diagnostic mission to determine constraints to production and exportation of high quality fruit from Rwanda. March-April Chemonics Int., Rwanda: Quality and Environmental Management Incentives for Agricultural Trade Mhazo Norman, Benjamin Hnayani-Mlambo, Sharon Proctor, Mupanda and Raymond Nazare. Constraints to small scale production and marketing of processed food products in Zimbabwe the case of fruits and vegetables MINAGRI. Evaluation of: Achievement of the Agricultural Rural Market Development Project (ARMD) Natural Resources Institute (NRI), Small Producers in Export Horticulture: A Guide to Best Practice

21 Producers' organisations Training in group formation & business management Agri business trainers MINAGRI & other organisations Developing GAP program EUREPGAP CODEX MINAGRI, KIST, ISAR & CIAT Production, harvesting, storage TOT on GAP MINAGRI KIST,ISAR & CIAT Producer owned credit facility Revolving fund/credit Micro finance institutions Selected seeds, imporved varieties MINAGRI ISAR Local transport to centralised storage/ processing unit Rural transport cycle trolleys meeting GAP requirements Local artisans CITT/KIST & technical support Sorting & grading PROCESS & PRODUCT DEVPT CENTRE MINAGRI KIST/ Food Science Dept Grade A for export Grade B for processing/ internal & regional markets Portable water Knives, spoons, utensils Local artisans Local market RHS system designed by CITT/KIST Packaging Cutting, desseding by hand preservative, stabiliser, sugar, citric acid Alternative energy sources e.g.solar, microhydro Paper cartons Local exporter MINAGRI Export documentatio n Pulping Credit/Lease purchase Local exporter Shipping Pastuerisati on Preservative Stabiliser & Mixing Pulper, Solar pastueriser Locally manufactured food processing equipment CITT/KIST with technical support Filling, bottling & packaging Polypropylene bottles Local supply Local importer Export market Local market