Public Disclosure Authorized Jamaica’s Trade in Ethnic Foods and Other Niche Products · 2016. 7. 14. · representative importers, brokers, retailers, and distributors in the European

The World Bank

Agriculture and Rural Development Discussion Paper 18 Cost of Compliance with SPS Standards

Jamaica’s Trade in Ethnic Foods and Other Niche Products The Impact of Food Safety and Plant Health Standards

Spencer Henson Steve Jaffee

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© 2005 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] All rights reserved. Agriculture and Rural Development Discussion Papers is an informal series produced by the Agriculture and Rural Development Department of the World Bank. These papers raise concepts and issues for discussion in the broader development community and describe ongoing research and/or implementation experiences from the Bank. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank, the governments they represent, or the organizations of contributing authors. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. About the Authors Spencer Henson is an associate professor in the Department of Agricultural Economics and Business, University of Guelph, Canada. Steve Jaffee is a senior economist in International Trade Department at The World Bank.

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Contents

FOREWORD ..............................................................................................................................................................V ACRONYMS AND ABBREVIATIONS................................................................................................................. VI EXECUTIVE SUMMARY ................................................................................................................................... VIII 1. INTRODUCTION..............................................................................................................................................1 2. EXPORTS OF AGRICULTURAL AND FOOD PRODUCTS FROM JAMAICA.....................................3 3. SANITARY AND PHYTOSANITARY CAPACITY IN JAMAICA ............................................................8

FOOD SAFETY............................................................................................................................................................9 PLANT HEALTH .......................................................................................................................................................14 AGRICULTURAL AND FOOD SUPPLY CHAIN.............................................................................................................18

4. CAPACITY BUILDING EFFORTS ..............................................................................................................20 5. IMPACT OF SPS MEASURES ON AGRI-FOOD EXPORTS ...................................................................23

PLANT PESTS AND PHYTOSANITARY CONTROLS ON EXPORTS OF FRESH FRUITS AND VEGETABLES .......................24 HOT PEPPERS...........................................................................................................................................................28 HYGIENE CONTROLS FOR FISH AND FISHERY PRODUCTS ........................................................................................33 PESTICIDE RESIDUES IN FRESH FRUIT AND VEGETABLES ........................................................................................38 YAMS ......................................................................................................................................................................41 PAPAYA ...................................................................................................................................................................44 SANITARY, PHYTOSANITARY, AND TECHNICAL STANDARDS FOR PROCESSED FOOD PRODUCTS.............................46 FOOD SAFETY CONTROLS FOR THE TOURISM SECTOR.............................................................................................47

6. CONCLUSIONS ..............................................................................................................................................48 REFERENCES ..........................................................................................................................................................51

Boxes

BOX 1. UPGRADING THE AMC FRUIT/VEGETABLE PACKING CENTER.......................................................................19 BOX 2. APHIS CONDITIONS TO REMOVE THE FUMIGATION REQUIREMENTS FOR HOT PEPPER EXPORTS TO THE UNITED STATES.......................................................................................................................................................32 BOX 3. REFORM OF FISH HYGIENE CONTROLS BY FIRM A ........................................................................................37 BOX 4. REFORM OF HYGIENE CONTROLS BY FIRM B................................................................................................38

Figures

FIGURE 1. TRENDS IN JAMAICA'S MERCHANDISE TRADE, 1990–2003 ........................................................................3 FIGURE 2. VALUE OF JAMAICAN FOOD, AGRICULTURAL, AND BEVERAGE EXPORTS...................................................5 FIGURE 3. EXPORTS OF MAJOR TRADITIONAL COMMODITIES, 1985–2003 (US$ 000) ................................................6 FIGURE 4. VARIED TRENDS IN JAMAICA'S FOOD, AGRICULTURE, AND BEVERAGE EXPORTS (US $ 000) .....................6 FIGURE 5. TOTAL US INTERCEPTIONS RELATING TO PHYTOSANITARY CONTROLS ON EXPORTS FROM JAMAICA, 1990–JULY 2003 .....................................................................................................................................................28 FIGURE 6. HOT PEPPER PLANTINGS AND PRODUCTION, 1990–2003..........................................................................29 FIGURE 7. EXPORTS OF HOT PEPPERS, 1994–2003 ...................................................................................................30 FIGURE 8. NUMBER OF US INTERCEPTIONS OF HOT PEPPERS FROM JAMAICA, 1990–JULY 2003 ..............................31 FIGURE 9. JAMAICAN EXPORTS OF FISH AND FISHERY PRODUCTS, 1985–2003.........................................................33 FIGURE 10. NUMBER OF INSPECTIONS BY PESTICIDES CONTROL AUTHORITY, 1999–2003......................................40 FIGURE 11. PRODUCTION OF YAMS, 1994–2003 ......................................................................................................42 FIGURE 12. EXPORTS OF YAMS, 1990–2003.............................................................................................................43 FIGURE 13. EXPORTS OF PAPAYA, 1991–2003 .........................................................................................................45 FIGURE 14. NUMBER OF FOREIGN TOURIST ARRIVALS, 1997–2003..........................................................................47

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Tables

TABLE 1. TOTAL COMMODITY IMPORTS AND EXPORTS BY VALUE, 2000....................................................................4 TABLE 2. LEADING NONTRADITIONAL FRUIT AND VEGETABLE EXPORTS, 2003 .........................................................7 TABLE 3. EXISTING LABORATORIES FOR CHEMICAL ANALYSES IN JAMAICA..............................................................9 TABLE 4. STRENGTHS AND WEAKNESSES OF FOOD SAFETY CONTROLS IN JAMAICA.................................................12 TABLE 5. MANAGEMENT CAPACITY CONSTRAINTS RELATING TO FOOD SAFETY IN JAMAICA...................................13 TABLE 6. STRENGTHS AND WEAKNESSES OF PLANT HEALTH CONTROLS IN JAMAICA ..............................................16 TABLE 7. MANAGEMENT CAPACITY CONSTRAINTS RELATING TO PLANT HEALTH CONTROLS IN JAMAICA...............17 TABLE 8. COST OF UPGRADING AMC FACILITY TO GAP AND HACCP STANDARDS................................................20 TABLE 9. US BORDER DETENTIONS OF JAMAICAN FOOD PRODUCTS, MARCH 2001–OCTOBER 2004, BY PRODUCT..24 TABLE 10. US BORDER DETENTIONS OF JAMAICAN FOOD PRODUCTS, MARCH 2001–OCTOBER 2004, BY REASON FOR DETENTION .......................................................................................................................................................24 TABLE 11. INTERCEPTIONS OF FRESH PRODUCE FOR EXPORT TO ALL DESTINATIONS, 1999–2003............................25 TABLE 12. MAJOR FISH AND FISHERY PRODUCT EXPORTS, 1999–2003 (KG)............................................................34 TABLE 13. RATES OF TRAVELER DIARRHEA PER 10,000 GUEST NIGHTS, 2000–02 ...................................................48

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FOREWORD Food and agricultural trade is the vital link in the mutual dependency of the global trade system and developing countries. Developing countries derive a substantial portion of their income from food and agricultural trade. The emergence of food safety and agricultural health issues, and the related tightening of market requirements form challenges to further gains from trade due to the lack of technical and financial capacities of many developing economies.

As part of a joint program between the World Bank’s Agriculture and Rural Development Department (ARD) and International Trade Department (PRMTR), a survey on the Cost of Compliance of exporting developing countries was undertaken. The survey was focused on the supply chains of high-value food products (horticulture, fish, meat, spices, and nuts). The study quantified the costs incurred by both the public and private sectors; identified the coping strategies employed by the various stakeholders in the supply chains; determined the constraints that hinder compliance; examined the structural changes in the supply chain resulting from compliance with the safety standards; and evaluated the impact of these standards on small-scale enterprises and producers. The survey included Ethiopia (animal products), India (fish and spices), Jamaica (nontraditional agricultural exports), Kenya (fish and horticulture), Latin America Southern Cone (animal products), Morocco (fruits and vegetables), Nicaragua (shrimp), Senegal (fish and groundnuts), and Thailand (shrimp and horticulture).

This working paper is one of a series of such case studies that examined the strategies and costs of compliance of the various stakeholders in developing countries with international agrofood standards. This paper was prepared by Spencer Henson (University of Guelph, Canada), and Steven Jaffee (PRMTR).

A complementary perspective is provided by the companion series of buyer surveys involving representative importers, brokers, retailers, and distributors in the European Union, Japan, and the United States. This series, in turn, discusses the buyers’ perception of the strengths and weaknesses of their suppliers and describes the assistance and/or interventions offered by the buyers to their developing country suppliers.

The findings and conclusions derived from these country studies are discussed in a synthesis report that seeks to identify possible points of intervention by the World Bank and other donor agencies and to determine the types of technical assistance that would be most efficient and appropriate. It is hoped that the experiences of these exporter and importer countries will provide useful insights to practitioners in the field, and to national and international policymakers in both the public and private sectors.

Kevin Cleaver, Director, Agriculture and Rural Development Department

Uri Dadush, Director, International Trade Department

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ACRONYMS AND ABBREVIATIONS

ACP Africa, the Caribbean and the Pacific AFT Advanced Farm Technology AMC Agricultural Marketing Corporation APHIS Animal and Plant Health Inspection Services ASSP Agricultural Support Services Project CARDI Caribbean Agricultural Research and Development Institute CCP Critical Control Point CITES Convention on International Trade in Endangered Species of Wild Flora and

Fauna COLEACP Committee for Liaison between Europe, Africa, the Caribbean and the Pacific CRSP Collaborative Research Support Program EHU Environmental Health Unit EU European Union FAO Food and Agriculture Organization of the United Nations FDA Food and Drug Administration (US) FOB free on board FSPID Food Storage and Prevention of Infestation Division GAP Good Agricultural Practice GDP gross domestic product GMO Genetically Modified Organisms HACCP Hazard Analysis and Critical Control Point HPLC High Performance Liquid Chromatography HPPD Health Promotion and Protection Division IICA Inter-American Institute for Cooperation in Agriculture IPM integrated pest management ISO International Organization for Standardization JBS Jamaica Bureau of Standards JEA Jamaica Exporters Association JMD Jamaican Dollar JMOA Jamaican Ministry of Agriculture LOD Limit of Determination MoA Ministry of Agriculture MoH Ministry of Health MOU Memorandum of Understanding MRL Maximum Residue Limit NAHFSCC National Agricultural Health and Food Safety Coordinating Committee NPHL National Public Health Laboratory NTE nontraditional exports PCA Pesticides Control Authority PIP Pesticides Initiative Programme PQ/PI Plant Quarantine/Produce Inspection RADA Rural Agricultural Development Authority R&D Research and Development SPS Sanitary and Phyto-Sanitary

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SRC Scientific Research Council SWEDAC Swedish Board for Accreditation and Conformity Assessment UK United Kingdom USAID United States Agency for International Development US United States VPHP Veterinary Public Health Program VSD Veterinary Services Division WTO World Trade Organization

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EXECUTIVE SUMMARY

Traditionally, export crops have accounted for a very significant proportion of Jamaica’s agricultural gross domestic product, total cultivated area, use of improved inputs, and agricultural employment. Sugar has long been Jamaica’s dominant crop, accounting for 30 percent to 40 percent of total harvested area over much of the past three decades. In the late 1980s and early 1990s, bananas emerged as a major export for Jamaica. For both of these products, Jamaica has enjoyed preferential market access into the United Kingdom and broader European Union markets. These preferences are being phased out, which is expected to lead to a major contraction of these industries due to their relatively low productivity and high costs. This contraction has already begun. Jamaica’s banana exports declined by 50 percent between 1997 and 2003 while its sugar exports declined by 33 percent over that same period.

The decline in Jamaica’s major traditional agricultural exports has been partially offset by enhanced trade in a more diversified set of agrofood products over the past decade. This trade has featured a broad array of fruits, vegetables, and tubers traditional to the Jamaican, diet which are being exported to supply the African, Asian and Caribbean immigrant communities in Canada, the UK, and the United States. Other Jamaican “nontraditional exports” include fish and fishery products, notably conch and lobster; and a broad range of processed food products, most importantly, pepper sauces, soups, juices, and a range of seasonings. Many of these nontraditional exports involve raw materials or commodities produced by small-holder farmers or caught by artisanal fishers. In recent years, these “nontraditional” food exports have had an annual value of some US$80 million, the total which now exceeds Jamaica’s sugar exports.

For many of these nontraditional exports, Jamaican suppliers are encountering significant competitiveness and market access challenges, the latter relating to concerns about food safety and/or plant heath risks. In both Europe and North America, a complex set of factors is contributing to an evolving set of more stringent official food safety and plant health regulations as well as more rigorous private sector sourcing requirements. Some of these more stringent standards, or more rigorous enforcement of existing standards, are being applied in the product areas featured in Jamaica’s nontraditional agrofood exports, namely, fresh fruits and vegetables, fish products, and canned/processed food products. Jamaican products have experienced impaired market access due to problems associated with pesticide residues, plant pests, food facility hygiene, and food additives or contamination.

Jamaica’s system of food safety and plant health management has not sufficiently evolved in response to changes in international standards, the requirements of Jamaica’s major trading partners, and the shift in composition of its agricultural and food exports. While the basic elements of capacity are in place and existing public institutions operate relatively well, enabled by generally high levels of human capital, they are directed at outdated principles and procedures. The current level of resource is clearly inadequate to meet the needs of the export sector. It is also inadequate to direct compliance efforts toward a more “proactive” strategy

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directed at foreseeing emerging problems and offsetting their impacts before they arise and/or turning them to competitive advantage.

Jamaica has addressed sanitary and phytosanitary (SPS) challenges mostly in a “reactive” mode. In other words, the country developed plans of action and modified regulations after market access was cut off or restricted due to SPS problems and/or trade partner concerns. In some cases, technical and administrative solutions were found, albeit with a delay. In other cases, either technical solutions remain elusive or the administrative or financial implications of identified solutions have resulted in their limited or non-adoption. The result has been a very uneven development of trade, with still frequent product interceptions, by either Jamaican or trade partner authorities, and much uncertainty among the private sector actors.

The limited public resources made available for SPS management have been compounded by the lack of a clear and coherent administrative structure relating to food safety and agricultural health in Jamaica. There are a number of overlaps of responsibilities with little or no communication and coordination among the agencies involved. Laboratory testing capacity is also fragmented among multiple laboratories and agencies. While the need to streamline existing administrative structures, and ideally create a single body with responsibility for food safety and agricultural health, has been recognized, efforts toward this end have been delayed by inertia and bureaucratic maneuvers to retain traditional institutional domains. Scarce public resources, therefore, are not being put to optimal use.

Much of the existing SPS management capacity in Jamaica remains embedded in the public sector, with the exception of certain subsectors (for example, fish and fishery products) or among some larger-scale operators (for example, a few food processors and those involved in papaya exports). While some progressive exporters of nontraditional fruits and vegetables are beginning to make some changes, overall private investment in improved food safety and plant health systems has been very limited. This lack of investment in part reflects overall uncertainties about export growth potential and a perception that overseas standards are either unfair or too complex. It is also a consequence of the highly fragmented nature of the pertinent export trades and supply chains, an aging agrarian population, the lack of pressures for change from overseas buyers, and the still predominant domestic market outlets for the featured commodities, in which few standards are enforced. These conditions result in inabilities to realize economies of scale and to induce changes in farmer agronomic and record-keeping practices.

Many of Jamaica’s nontraditional agrofood exports face a broad range of competitiveness constraints related to inconsistent raw material production, high post-harvest losses, relatively high cost and limited availability labor, macroeconomic factors, and intensified regional and other competition. Market access problems related to SPS materials have exacerbated and reinforced these constraints, reducing the profitability and raising the risks associated with the conduct of these trades. The resolution of such SPS constraints is necessary, although not sufficient, to restore and improve the competitiveness of Jamaica’s nontraditional agrofood exports.

Due to the relatively small and specialized nature of much of the trade in high-value agricultural products, Jamaica’s trading partners have shown little flexibility and devoted very few resources to help resolve ongoing problems. However, there are two donor-supported projects being implemented that seek to strengthen particular quality control and SPS management capacities and bring about a more coherent, integrated, and strategically focused system in these spheres.

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Some progress has been made, albeit at a much slower pace than expected. There will be a need to extend the implementation period for these projects if the desired and necessary levels of intergovernmental coordination are to be achieved in relation to SPS management.

Capacity weaknesses remain significant in the private sector, and there are questions as to whether exports can be maintained, let alone increased, on the basis of the current fragmented system of production among an aging farming population. Selected interventions to develop more coordinated supply chains and traceability systems for particular commodities could be pursued through a joint public/donor-private initiative. Yet, it is likely that future export development will require private investment in (medium-scale) export-dedicated production for which rising quality, food safety and plant health standards are factored into production, post-harvest, and overall management systems. It is not certain that this activity is sufficiently profitable to induce such investment, whether by Jamaicans or others with prior experience and market linkages. Furthermore, Jamaica has a number of notable disadvantages compared with competing supply sites in Africa, Central America, and elsewhere.

Future export development can also involve efforts to expand sales in sauces, seasonings, and other value-added processed food products, both increasing market shares among immigrant communities and extending sales to penetrate the more mainstream market, for which demand for many such products continues to grow rapidly. Exploiting such export opportunities may require some modification of product composition and recipes to meet consumer preferences and increased attention to compliance with regulations related to labeling, additives, and packaging. Rather than a fragmented, company-specific approach to these challenges, there is scope for a more coordinated approach involving joint investment in product research and development, food hygiene training, and market development.

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1. INTRODUCTION Jamaica has recorded an impressive record of poverty alleviation since it first began monitoring living conditions in 1988. From 1989 to 1997, the poverty headcount declined from 30.5 percent to 19.9 percent, and has since stabilized in the upper teens (World Bank 2002). Financial transfers from Jamaicans living abroad have played a major role in the growth of the economy and the recorded decline in poverty. As such, there are concerns that the economy is not self-sustaining and the observed economic growth has failed to generate sufficient employment. Indeed, even during the period 1991 to 2001, when Jamaica experienced modest growth, employment rose less than 0.3 percent per annum. A major factor explaining these trends has been Jamaica’s relatively poor international competitiveness and productivity, exacerbated by the costs associated with its high rate of crime.

While the overall rate of poverty in Jamaica has declined significantly, rural poverty remains a significant problem. In 2001 the poverty headcount in rural areas was 24.1 percent, with relatively high and persistent rates of extreme poverty. Thus, although the contribution of agriculture to GDP is relatively small, at 6.6 percent in 2002, it plays an important role in the livelihood of the rural population and remains a key factor in efforts to alleviate poverty. Indeed, in 2002 approximately 20 percent of the population was employed in agriculture, with a total agricultural workforce of 182,000 and the existence of some 188,000 rural households. However, agriculture is highly fragmented, with an average holding size of only 2.2 hectares (ha) (SIJ 1998), and much is of questionable economic viability. Many of Jamaica’s small-holder farmers are from older age groups, with few young people interested in pursuing agriculture as their means of livelihood.1

Traditionally, export crops have accounted for a significant proportion of Jamaica’s agricultural GDP, total cultivated area, use of improved inputs, and agricultural employment. Sugar alone has accounted for between 30 percent–40 percent of the total agricultural area harvested over the past 3 decades. Historically, Jamaica’s agricultural exports have been dominated by sugar and bananas, for which the country enjoyed preferential market access into the United Kingdom and subsequently into the European Union. Other long-standing exports have included coffee, cocoa, pimento, and rum (made from molasses). Impending reforms in EU trade and support policies for sugar and bananas pose an enormous to Jamaica’s exports of these products given the country’s lack of cost competitiveness.2 The contraction of these industries has already begun with Jamaica’s banana exports declining by half between 1997 and 2003, and those for sugar declining by 33 percent over the same period. Further major contraction in these industries is expected in the years ahead.

1 The Census of 1996 found 50% of farmers to be between 50 and 70 years old. 2 For example, the average production cost for sugar in Jamaica is US 0.24/lb., approximately three times the world

market price and approximately double the price which is expected to prevail in Europe following major reforms. See Mitchell (forthcoming).

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While the Jamaican government is looking for growth in services, especially tourism, to close the country’s burgeoning trade deficit, there is also some hope and expectation that the country can increase its exports in a broadly diversified range of food and agricultural products. Over the past two decades there have been emergent yet uneven exports in a broad range of fruits and vegetables, fishery products, and processed foods. The bulk of this “nontraditional” trade has been targeted toward African, Asian, and Caribbean immigrant communities in North America and the United Kingdom, or to sales within the Caribbean region itself. Much of this trade involves fresh and processed foods that are staples of the Jamaican diet. This trade thus represents part of a wider phenomenon of trade in “ethnic foods,” which has been stimulated both by international migration as well as the broader travel experiences and quest for food variety among mainstream populations. The bulk of the commodities/raw materials servicing Jamaica’s “nontraditional” exports comes from smallholder farmers or artisanal fishers.

While the trade shift toward “ethnic foods” and other nontraditional products offers potentially lucrative opportunities, it also raises a variety of new challenges. Many of these products and the markets to which they are supplied have demanding sanitary and/or phytosanitary (SPS) measures and/or quality requirements. There is therefore a need to develop capacity in both the Jamaican public and private sectors to enable compliance with these requirements alongside more general efforts to enhance the level of support provided to agricultural production. This study examines Jamaica’s recent experiences in addressing the SPS challenges associated with its nontraditional food exports.

The aims of this study are to examine the efficacy of strategies to comply with emerging standards, assess the extent to which SPS measures have impeded the development of Jamaica’s nontraditional exports, and review the prevailing level of SPS management capacities within the country and ongoing efforts to strengthen these. The study first describes the magnitude and composition of agricultural and food exports from Jamaica and then assesses the current status of SPS capacity. On these bases, the potential for SPS measures to impede agricultural and food product exports is assessed, drawing on a number of specific cases in which problems have occurred. An overall assessment of the impact of SPS measures is then undertaken, and recommendations made for future action on the part of both the Jamaican government and private sector.

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2. EXPORTS OF AGRICULTURAL AND FOOD PRODUCTS FROM JAMAICA

Throughout the late 1980s and early 1990s, Jamaica achieved sustained growth in the value of its merchandise exports, reaching a peak of US$1.72 billion in 1996 (figure 1). Since that time, however, the value of merchandise exports has declined, to a low of US$1.1 billion in 2003. Over this same period, merchandise imports increased significantly from US$1.2 billion in 1980 to more than US$3.5 billion in recent years. Thus, a wide and increasing merchandise trade deficit has occurred, reflecting an overall lack of international competitiveness on the part of the Jamaican economy.

Figure 1. Trends in Jamaica's merchandise trade, 1990–2003

Source: FAOSTAT.

Jamaica’s major merchandise exports are crude materials, agricultural/food products, and miscellaneous manufactured goods, which collectively accounted for over 72 percent of exports by value in 2000 (table 1). Historically, bananas and sugar were the predominant exports, mainly directed to the United Kingdom. However, in the 1960s, exports of alumina and bauxite expanded rapidly, redirecting Jamaica’s trade toward the United States. In the 1980s, apparel emerged as a major export (produced in dedicated export processing zones), expanding rapidly to account for approximately 40 percent of Jamaica’s merchandise exports by 1993 (World Bank 2003). Since then, in the face of intensive competition from other Caribbean islands and Costa Rica, apparel exports have declined and by the late 1990s were negligible. Factors contributing to the loss of competitiveness in this and other sectors have included the appreciation of the real

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exchange rate for the Jamaican dollar, rising labor costs and labor activism, and the very significant costs associated with high rates of crime.

Table 1. Total commodity imports and exports by value, 2000

Imports Exports Commodity Value (US$000) % Value (US$000) % Food 446.6 14.0 227.9 17.6 Beverages and tobacco 28.1 0.9 60.0 4.6 Crude materials 51.9 1.6 737.4 57.0 Mineral fuels 595.2 18.6 3.8 0.3 Animal and vegetable oils 19.6 0.6 0.1 0.0 Chemicals 340.0 10.6 68.5 5.3 Manufactured goods 436.9 13.7 12.4 1.0 Machinery and transport equipment 745.2 23.3 26.9 2.1 Miscellaneous manufactured goods 448.9 14.0 156.2 12.1 Other 87.6 2.7 0.0 0.0 Total commodity exports 3,200 100.0 1,293.2 100.0

Source: Planning Institute of Jamaica.

Alongside these changes in the composition of merchandise trade, there has been a dramatic increase in the role of services as an export and source of foreign exchange, notably tourism (World Bank 2003). Thus, services accounted for 33 percent of trade, of which 17 percent was tourism, in 1980. By 2001 this had increased to 57 percent, of which 37 percent was tourism. At the same time, remittances from Jamaican’s living and working abroad have become vital to the Jamaican economy. In 2002 such private transfers amounted to US$920 million, equal to 88 percent of the value of merchandise exports.

Agricultural and food products remain important to merchandise exports from Jamaica, accounting for approximately 26 percent by value in 2002. Their share of total exports has actually increased since the mid-1990s, having “achieved” only a modest decline compared with a more significant decline in Jamaica’s total merchandise trade. Jamaica’s food and agricultural exports peaked in 1997 at US$329 million and were just under US$302 million in 2003 (figure 2). Traditionally, Jamaica’s agricultural and food exports were dominated by sugar, although bananas emerged as a major export in the late 1980s and early 1990s, and the country has exported citrus products, coffee, cocoa, pimento, and rum for many years. Figures 3 and 4 show the varied patterns of Jamaica’s food, agricultural, and beverage exports over the past decade. The country’s sugar and banana exports have declined sharply, while trade gains have been made both for coffee and rum. Trade in a broad range of “nontraditional” exports accelerated in the first half of the 1990s and has remained at essentially the same level since. As a group, the nontraditional exports now exceed the value of Jamaica’s sugar exports.

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Figure 2. Value of Jamaican food, agricultural, and beverage exports

Source: FAOSTAT.

Jamaica’s nontraditional food exports consist of a broad range of products in the following categories:

• Fresh fruits and vegetables that are traditional to the Jamaican diet and are being shipped to service primarily the African, Asian, and Caribbean immigrant communities in selected cities of Canada, the United Kingdom, and the United States. Commodity examples include yam, sweet potato, other tubers, hot peppers, mango, papaya, and ackee.

• Fish and fishery products, including lobster, tilapia, and conch. These exports are directed primarily to Europe or to European territories within the Caribbean.

• Processed food products, especially pepper sauces, chutneys, soups, juices, and a broad range of condiments, syrups, and seasonings. These are exported throughout the Caribbean and to North America and the United Kingdom.

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Figure 3. Exports of major traditional commodities, 1985–2003 (US$ 000)

Source: FAOSTAT.

Figure 4. Varied trends in Jamaica's food, agriculture, and beverage exports (US $ 000)

Source: FAOSTAT.

As a group, Jamaica’s nontraditional agricultural and food exports increased in value from US$45 million in 1990 to nearly US$75 million in 1994. Over, the past decade, their aggregate value has leveled off, to within the range of US$70–85 million per annum, with divergent trends among individual products. As will be seen below, even the trade levels for individual products

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have exhibited wide interannual variability, in large part due to difficulties faced in meeting the food safety and/or plant health requirements of major trading partners. An important dimension of Jamaica’s nontraditional food trade is its fragmentation among a broad array of products and the small volumes of trade in most of these (table 2). For only one product, yam, does current trade exceed US$10 million per year. Trade levels in most of the other products are only a few million dollars each. These low levels bear significance as the country faces a broad range of SPS-related and broader competitiveness challenges. In many instances, it is difficult to mobilize a critical mass of resources or achieve any economies of scale when seeking to address these challenges.

Jamaica regularly exports approximately 35 varieties of nontraditional fresh fruits and vegetables, although approximately five products account for over 40 percent of the export volume. These products are exported to well-established markets in major urban areas of Canada, the United Kingdom, and the United States, often through family or other linkages to the Jamaican immigrant population. Production is done on small farms that also supply domestic markets, with procurement normally through intermediaries. Most producers rely on rainfall, producing erratic supply that is highly dependent on the weather. At any one time an exporter can be sourcing from upwards of 100 farmers, with the entire supply base consisting of between 3,500 and 4,000 producers.

Typically, there is very little integration of the export trade and production, with the major exception of papaya exports, which are dominated by 3 major producer-exporters. Thus, there is typically little or no traceability through the supply chain and little production that is dedicated for export. This lack of traceability not only raises challenges for compliance with SPS requirements but also inhibits the ability of exporters to take account of lucrative market opportunities. Typically, production is at its lowest in Jamaica at the very time of the year when market prices are highest, for example, in the United States. Again, with the exception of papaya, the structure of export trading is itself fragmented, with some 35 active companies, with perhaps 10 accounting for 60 percent of the trade. Hence, even the largest companies in this industry have a gross turnover of only a few million dollars, and most have businesses that are considerably smaller than that.

Table 2. Leading nontraditional fruit and vegetable exports, 2003

Product Volume (Kg) Value (US$) Callaloo 346,753 547,876 Coconut seed 330,984 555,216 Hot pepper 310,117 696,206 Pumpkin 1,230,282 697,409 Mango 453,890 838,150 Breadfruit 772,903 861,216 Dasheen 1,064,282 1,192,341 Uniq 800,344 1,225,944 Sweet potato 1,501,806 1,919,544 Tangelo Ugli 1,287,903 2,094,959 Papaya 2,123,981 3,455,441 Yam 11,183,821 14,991,698

Source: Jamaican Exporters Association.

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3. SANITARY AND PHYTOSANITARY CAPACITY IN JAMAICA

A number of evaluations have been undertaken of SPS capacity in Jamaica as a whole (Reid 2000, IICA 2000, Focal Point 2004, National Quality Infrastructure Project 2001) as well as particular sub-elements (see, for example, Canale 2002), so the authors have a relatively clear picture of the prevailing strengths and weaknesses in the context of emerging food safety and plant and animal health requirements in international trade. Broadly, the picture is of a SPS control system in which the core legislation and functional capacities are in place but are in need of significant updating and modification to reflect evolving international standards and the requirements of the WTO. At the same time, however, the system suffers from being highly fragmented, with a lack of clearly defined responsibilities and poor coordination.

Overall responsibility for SPS controls in Jamaica involves a number of government ministries and agencies and more than 20 different pieces of legislation and attendant regulations (Reid 2000). The key institutions are as follows:

Ministry of Health (in particular, the Health Promotion and Public Health Division, National Public Health Laboratory and Pesticides Control Authority)

Ministry of Agriculture (in particular, the Plant Quarantine/Produce Inspection Unit and Veterinary Services Division)

Ministry of Industry, Commerce and Technology (in particular, the Food Storage and Prevention of Infestation Division)

Jamaica Bureau of Standards (JBS).

In many cases, there is a direct overlap of responsibilities. Examples include the overlap of the Pesticides Control Authority and the Food Storage and Prevention of Infestation Division in relation to the licensing of pest control operators, and the inspection and approval of food processing operations by both the JBS and Ministry of Health. This duplication of functions leads both to a waste of resources and the lack of coverage of key areas of capacity. Likewise, it has fragmented the capacity that does exist, most notably with respect to laboratories. There are a number of laboratories in Jamaica, all of which have limited capacity themselves and could benefit from economies of scale and/or scope (table 3).

The Jamaican government has recognized the need for SPS controls to be better coordinated and for the consolidation of responsibilities. Thus, it has established a National Agricultural Health and Food Safety Coordinating Committee (NAHFSCC), which has been given the responsibility: “to establish and maintain a rational and integrated farm-to-table agricultural health and food safety system in Jamaica that harmonizes inter-agency efforts, minimizes inter-agency conflict and overlap, and ensures the protection of public health in a manner consistent with WTO and other international standards.” Some 23 agencies and departments are represented on the committee.

The NAHSFCC is expected to focus on all aspects of food safety and agricultural health, formulating a national policy and making recommendations for a food safety agency. A National Quality Policy for Jamaica was agreed in October 2001, including the establishment of a single food safety agency charged with all SPS issues. However, this policy has yet to be approved by Cabinet, and is not expected to be, in the foreseeable future. Memoranda of Understanding have been agreed among the Ministries of Health, Agriculture and Commerce, Science and

9

Technology, but these have not yet been officially signed. The Coordinating Committee itself has no authority and little coordinating capacity. These developments highlight the considerable inertia and resistance to change within the established administrative structure for SPS management in Jamaica and the political sensitivities associated with proposed reforms. Thus, the way forward looks likely to consist of the reallocation of existing responsibilities rather than a fundamental change in existing administrative structures, perhaps as part of a gradual and longer-term move to a single agency.

Table 3. Existing laboratories for chemical analyses in Jamaica

Agency Analysis Veterinary Services Division Residues National Public Health Laboratory Clinical analyses Government chemist Forensic testing Food Storage and Prevention of Infestation Division Pesticide residues Jamaican Bureau of Standards Chemical analysis of

processed foods Scientific Research Council Chemical analysis of

processed foods University of the West Indies: ICENS Heavy metals University of the West Indies: Chemistry Department Residues, contaminants, toxic

pollutants

Source: Focal Point (2004).

Next, this study reviews the prevailing levels of capacity with respect to food safety and plant health. Given that the study’s focus is agricultural and food exports, there is no explicit assessment of capacity relating to animal health, although veterinary public health is discussed:

FOOD SAFETY

Overall responsibility for food safety in Jamaica lies with the Ministry of Health (MoH) under the Public Health Act (1975) and Food and Drugs Act (1974). The Health Promotion and Protection Division (HPPD) is responsible for establishing policy and guidance with respect to food safety and veterinary public health. For the purposes of enforcement, the Ministry of Health is decentralized into four Regional Authorities that provide health services in their respective areas. The Environmental Health Unit (EHU) has 250 inspectors who regulate food handlers, inspect processing, and retail premises. A comparable Veterinary Public Health Program (VPHP) undertakes inspection of slaughtering facilities and meat and fish processing facilities. Inspectors must be present at all times that slaughtering/processing occurs. The MoH operates the National Public Health Laboratory (NPHL), which undertakes water monitoring; microbiological testing; and surveillance of meat, fish, and dairy products.

With respect to meat and fishery products for export, the Competent Authority charged with certification is the Veterinary Services Division (VSD) of the Ministry of Agriculture (MoA). As such, the VSD has no authority to inspect meat and/or fish processing facilities, which initially created problems with respect to fish exports to the European Union (see below). Thus, in February 1999 a Memorandum of Understanding (MOU) was signed between the MoA and MoH whereby the inspection activities of the MoH were recognized for the purposes of export certification, and much of this function is still undertaken by VPHP inspectors. The need for such an MOU and the way in which it has operated provide another example of the lack of

10

clarity in the allocation of administrative responsibilities within the food safety and agricultural health management system in Jamaica. The VSD also operates a residue monitoring program for meat, fish, and poultry.

The Food Storage and Prevention of Infestation Division (FSPID) of the Ministry of Commerce, Science and Technology is responsible for controlling the infestation of food entering commerce and has the power to condemn and destroy infested foods. Its activities include controls on rodents, residues (including mycotoxins and pesticide residues), microbiological contaminants, and pests in domestic production, as well as for imports and exports. It is also responsible for the licensing of private pest control operators and training of farmers on pest control operations with respect to storage.

The Jamaica Bureau of Standards (JBS) is responsible for inspecting and registering establishments that manufacture processed foods under the Processed Food Act 1959. The JBS was established in 1968 as a statutory body reporting to the Ministry of Commerce, Science and Industry. In the case of milk processing, however, responsibility for sanitation and quality lies with the MoH once the premises have been approved by the JBS. Furthermore, the Scientific Research Council (SRC) is responsible for approving the processing of low-acid canned foods such as ackees and callaloo (most notably, for export to the United States). This highlights the fragmentation and duplication of the inspection and approval of food processing operations in Jamaica.

The JBS is also responsible for the development of both mandatory and voluntary standards for agricultural and food products. In the case of food and food products, it establishes mandatory standards under the Processed Food Act 1973 and voluntary standards under the Standards Act 1973. However, Jamaica has experienced considerable problems getting its standards accepted abroad, particularly in cases in which these are not based on international standards (Reid 2000). In addition, the JBS has traditionally undertaken both certification and accreditation functions, in contrast with international “good practice,” which involves the separation of these administrative functions to minimize conflicts of interest.

Control of pesticides in Jamaica is undertaken by the Pesticides Control Authority (PCA), an autonomous agency of the Ministry of Health. The Authority is responsible for registering and approving pesticides, controls on imports and domestic production, registration and approval of pesticide retailers and pest control operators, and residue and quality analysis. Jamaica does not have national maximum residue limits (MRLs) for pesticides in foodstuffs, although it makes use of Codex Alimentarius MRLs to control imports and residues monitoring. The PCA has a very limited monitoring program that involves taking very low numbers of samples of local products on an annual basis.

Tables 4 and 5 provide an overview of the current status of food safety control capacity in Jamaica. While there is basic capacity in most areas, this is generally inadequate given the food safety requirements in international trade. Furthermore, there is little or no capacity within the private sector, with the notable exception of the fish processing and papaya sectors (see below) and a few major food processing operators. Certainly, the vast majority of exporters appear to have little or no food safety control capacity. Likewise, there is little collective private sector capacity. The Jamaica Exporters Association (JEA) has been established as part of efforts within the private sector to coordinate and promote the export of nontraditional agricultural and food products. The JEA has approximately 200 members and undertakes lobbying and trade show

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administration, and provides start-up and working capital through a revolving fund. However, it is not actively involved in the establishment of food safety capacity, for example, through the development of industry “codes of practice.”

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Table 4. Strengths and weaknesses of food safety controls in Jamaica

Sector

Collective

Element of capacity Public sector Private sector Exporters Internal surveillance

Some capacity but generally inadequate

Missing Some capacity but generally inadequate in most sectors

Import controls

Legislation and procedures in place but need to be enhanced


Emergency quarantine



Export controls and certification Some capacity in place (such as Fish) but generally inadequate

Missing Some capacity in place (such as Fish) but generally inadequate

Responsiveness to new/emerging issues

Limited monitoring and ability to respond to emerging issues

Missing Lack of coordination

Risk analysis

Relatively weak capacity Missing Some capacity but generally inadequate in most sectors

Analysis and diagnosis



Controls on inputs



Pest and disease control



Hygienic practices in production, processing, and distribution

Level of inspection and enforcement needs to be enhanced

Missing HACCP generally not implemented outside fish processing sector

Monitoring



Identification and traceability



Source: Authors.

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Table 5. Management capacity constraints relating to food safety in Jamaica

Sector

Collective

Element of capacity Public sector Private sector Exporters Administrative procedures

Overlap and lack of coordination of responsibilities among government agencies

Generally missing Generally a lack of cooperation/coordination between exporters and suppliers

Legislation

Largely outdated

Lack of private sector codes of practice or guidelines

Generally a lack of written protocols for suppliers

Enforcement/control

Inadequate inspectors and/or inspectors inadequately trained

Generally weak Generally a lack of quality assurance personnel

Physical infrastructure

Laboratory facilities in need of updating

Little or no capacity Most exporters lack laboratory facilities Some processing facilities in need of upgrading

Human capital

Need for training or retraining of policymakers, professionals, and operational staff

Generally weak Generally a need for quality assurance personnel and for hygiene training among workforce

Capacity building/updating Many procedures and facilities outdated

Attempts to upgrade capacity in some sectors (such as fish) but generally weak

Lack of cooperation/coordination among exporters Lack of training/professional updating

Communication

Lack of communication among government agencies Lack of communication among government and industry

Generally weak Lack of communication between government and industry and within the export sectors

Source:Authors

.

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Across the agencies responsible for food safety controls there are limitations in skills and experience in risk analysis and equivalency (Reid 2000). Furthermore, the implementation of hazard analysis and critical control point (HACCP) systems is in its infancy. However, there is clearly widespread recognition of the need to implement HACCP in food processing operations and throughout the supply chain. For example, the staff in VSD and FSPID have received training in this respect. In many cases, the need for HACCP reflects food safety requirements in Jamaica’s export markets. For instance, both the European Union and the United States require HACCP in the processing of fish. This is also one area in which there are signs of Jamaican private sector activity in the provision of consultancy, testing, and training services with respect to food safety. Two Jamaican private operators are involved in the implementation of HACCP and ISO 9000 and food safety training. One of these, Technological Solutions Ltd., is responsible for implementing the approved HACCP procedures for canned ackees as required by the US Food and Drug Administration (FDA).

It is acknowledged by the Jamaican government and international institutions such as FAO and IICA that food safety legislation needs to be updated to comply with international standards and/or the requirements of Jamaica’s major trading partners. Moreover, the existing body of legislation needs to be consolidated to enhance the effectiveness of enforcement and make regulatory requirements clearer to the private sector (Reid 2000, IICA 2000). Currently, there are 15 Acts with attendant regulations. Most have strong powers to ensure compliance, although the penalties are outdated. However, there is no legislative power in many crucial areas, such as the promulgation of maximum residue limits (MRLs) for pesticides in foods. Indeed, there have been efforts to update the legislation in certain areas, predominantly in response to the standards applied in major export markets. For example, the Aquaculture, Inland and Marine Products and By-products (Inspection, Licensing and Export) Act of 1999 aimed to implement the controls specifically necessary to satisfy EU requirements. Likewise, plans to implement equivalent legislation for meat and meat products are aimed at facilitating EU market access.

As discussed above, laboratory capacity in Jamaica is highly fragmented. The overall picture is of well-established capacity to undertake a range of analyses, although a need for the existing facilities to be upgraded to perform the range and sensitivity of analysis now required for compliance with food safety requirements in export markets. For example, facilities at the NPHL are relatively modern and capable of undertaking a wide range of the analyses required by major export nations. However, there is a need to upgrade facilities and retraining of staff and for international accreditation of testing facilities. Furthermore, current capacity is considered inadequate to undertake high-volume quick-turnaround analyses (IICA 2000, Reid 2000). The FSPID’s laboratory for residue chemistry is equipped to undertake most of the required tests; yet, it has limited equipment and backlogs occur when there are sudden surges in testing demand. Periodic shortages of solvents and other chemicals also inhibit performance. The laboratory of the VSD is able to undertake analyses for most microorganisms and some antibiotics and pesticide residues. These facilities were upgraded in 2000 at a cost of JMD10 million, although are in need of additional investment. However, the lack of staff with appropriate skills and high rates of staff turnover are recurrent problems.

PLANT HEALTH

Controls on plant pests and diseases under the Agricultural Produce Act 1926 and Plant Quarantine Act 1993 are the responsibility of the Plant Quarantine/Produce Inspection Unit

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(PQ/PI) of MoA. The PQ/PI Unit has 18 plant quarantine officers, two entomologists, and two fumigators based at the central headquarters and at export complexes at the international airports in Kingston and Montego Bay. These facilities provide a one-stop shop for customs, narcotics, and plant health controls for exporters of fresh produce. Both sites have fumigation facilities, although only the complex in Kingston has cold storage. Both facilities operate a pre-clearance program for exports to the United States (see below).

Tables 6 and 7 provide an overview of the current level of plant health controls in Jamaica, which draw in part on Canale (2002). Unlike the broad area of food safety, fragmentation is less of a problem in the case of plant health controls, although there is some overlapping of jurisdiction with the FSPID regarding stored crops. The broad picture is that, while the basic public institutional capacity is in place, the effectiveness of phytosanitary controls is compromised by outdated procedures and limitations in both physical and human capital. In addition, channels of communication need to be enhanced. This necessity reflects the fact that the resources provided to support this function have not kept pace with the growth in exports of nontraditional fruits and vegetables, for which plant health is a more significant issue, nor with the growth in Jamaica’s agricultural imports and port landings by cruise ships. In turn, this lack of communication and inspection capacity can cause delays in clearing produce for export, especially if insects are detected and have to be identified. The PQ/PI Unit does have a high level of experienced staff, and turnover has been low. However, within the private sector, there is little or no capacity, and, arguably, it is here that the most effort is required.

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Table 6. Strengths and weaknesses of plant health controls in Jamaica

Sector

Collective

Element of capacity Public sector Private sector Exporters Internal surveillance


Missing Weak except in integrated operations

Import controls

Legislation exists but needs to be updated. General lack of capacity


Emergency quarantine



Export controls and certification Well developed, although capacity needs to be enhanced


Responsiveness to new/emerging issues

Lack of monitoring and ability to respond to emerging issues


Risk analysis

Relatively weak capacity Missing Weak except in integrated operations

Analysis and diagnosis

Basic capacity developed but generally inadequate Need better diagnostic capacity


Controls on inputs



Pest and disease control



Hygienic practices in production, processing, and distribution

Advice and support systems in place but poorly resourced


Monitoring



Identification and traceability



Source: Authors.

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Table 7. Management capacity constraints relating to plant health controls in Jamaica

Sector

Collective

Element of capacity Public sector Private sector Exporters Administrative procedures

Need for documented procedures Need for computerization Need for better coordination of quarantine and extension services

Missing Lack of cooperation/coordination between exporters Lack of documented procedures

Legislation

Outdated Draft available but stalled

Missing Generally a lack of written procedures for suppliers

Enforcement/control

Export controls generally good Need for enhanced import controls Need enhanced operational manuals

Missing Lack of personnel with required training

Physical infrastructure

Need for upgrading of laboratory, inspection and incineration facilities

Missing Most exporter facilities in need of upgrading to ensure effective controls

Human capital

Need for training or retraining of inspection personnel

Missing Need for training of producers and exporters

Capacity building/updating Many procedures and facilities outdated with little or no attempt to build capacity and keep up to date

Missing Lack of cooperation/coordination among exporters Lack of training of farmers

Communication

Channels of communication established but need to work better Need for better coordination of quarantine and extension services Need for policymakers to be sensitized

Missing Lack of communication between government and industry and within the export and production sectors

Source:Authors.

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In general, legislation and documented procedures have not been updated in line with international standards, although there is awareness of the need to do so among senior administrators. The need for legislation to be updated is recognized within the PQ/PI Unit, and a new plant quarantine act has been drafted with the assistance of the FAO. This process has been delayed, however, by the ongoing debate regarding the establishment of a single authority to govern food safety and agricultural health controls, as discussed above. The draft legislation addresses the inherent weaknesses in the Plant Quarantine Act of 1993, which was considered outdated even at the time it was implemented, for example, in providing for the implementation of import permits, and the application of various penalties and fees.

Jamaica is free of the majority of plant pests and diseases that are of importance to international trade. However, certain species of fruit fly are present and prevent exports of some products, such as mangoes to the United States. Furthermore, some indigenous and/or imported pests are of significance to particular products, for example, the gall midge in the case of hot pepper (see below). However, capacity to undertake pest risk assessments is limited, and Jamaica’s status with respect to certain pests and diseases is not confirmed. This creates major problems in negotiating plant health controls with the phytosanitary authorities in major export markets, most notably with Animal and Plant Health Inspection Services (APHIS) in the United States.

Currently, there are no dedicated inspection facilities for imports, despite the fact that volumes increased significantly through the 1990s. Indeed, the PQ/PI has struggled to maintain an adequate level of inspection to prevent the importation of exotic pests, for example, from other parts of the Caribbean.

The PQ/PI Unit works closely with the Rural Agricultural Development Authority (RADA) to implement controls on plant pests and diseases in domestic production. RADA has extension officers stationed across the island. Each parish office has a computer terminal in which data can be stored and downloaded. Currently, surveillance programs are operational for fruit fly, scale insects, papaya ring spot virus, papaya mealy bug, pink mealy bug and the gall midge. RADA is informed when export consignments are rejected and is supposed to investigate, although it is evident that this system could be improved. Inspectors from the PQ/PI unit also undertake farm visits periodically, especially when a problem has been identified.

Jamaica has certain weaknesses in controls of plant pests and diseases. First, current legislation requires updating and is not compliant with international standards. Second, there are insufficient inspectors to provide adequate surveillance coverage, both for domestic production and at air and shipping terminals. Third, there is lack of expertise and diagnostic laboratory capacity in pathology and pest identification. As a result of these weaknesses, the Jamaican government has found it difficult to defend its position in disputes over phytosanitary controls on exports, in particular, to the United States.

AGRICULTURAL AND FOOD SUPPLY CHAIN

The foregoing discussion has highlighted the lack of food safety and plant health control capacity within the private sector in Jamaica. However, the notable exceptions are discussed in further detail in section 5. To maintain access to EU markets, the fish processing sector has been required to implement enhanced hygiene controls, including HACCP. Some fresh produce exporters have made efforts to implement enhanced hygiene controls, most notably within the papaya sector, which is dominated by three major exporters, two of which source a proportion of

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their produce through a system of out-growers (producers growing on their own land under contract). Some more sophisticated exporters of Jamaican vegetables have also made efforts to upgrade their standards, seeing the emergence of stricter standards on the horizon, although these exporters remain very much the exception rather than the rule. Major food processing companies, for example, Grace Kennedy, have also implemented HACCP and other hygiene controls. These more progressive companies are keeping in view the growing importance of exports, both within the region and to Canada, the United Kingdom, and the United States.

The broader picture, in contrast, is of a highly fragmented supply chain that supplies both the domestic and export markets and has rather rudimentary systems of food safety and/or plant health control. Furthermore, in many cases, there is little or no evidence that these systems have been upgraded as the volume and composition of agricultural and food exports from Jamaica have changed over time and the SPS requirements in major export markets have evolved. In this context, the SPS-related requirements discussed in section 5 below should be reviewed. It is evident, however, that the need to upgrade prevailing food safety and plant health controls has been recognized by the Jamaican government. The government is investing in these areas, for example, through the Agricultural Support Services Project (ASSP) (section 4), which is providing support to upgrade the facilities of the Agricultural Marketing Corporation (AMC) (box 1). In addition, the foregoing discussion indicates that some exporters are making efforts to upgrade their own controls. Do they perhaps represent the tip of the iceberg of more private sector investing in upgrades? Box 1. Upgrading the AMC fruit/vegetable packing center

Indicative of the need to upgrade sanitary and phytosanitary standards (SPS) controls through the supply chain and the recognition of this within the Jamaican government is the case of the Agricultural Marketing Corporation (AMC). This statutory body was established in 1963 to stimulate and promote local agriculture by providing a guaranteed market for farmers’ crops. The AMC operates from a facility in Kingston that was converted to an agro-export center in the mid-1980s. Historically, the AMC also operated a series of branches around the country through which produce was procured. Although these are no longer functional, they still form the basis of the supply chain to the center. Currently, the agro-export complex has 14 residents, although not all of these are involved in exports of agricultural and food products. Exporters operating at the complex assemble products and perform cleaning and basic processing operations prior to dispatch to the export complex at Kingston airport. In December 2002 a Good Agricultural Practice (GAP) audit was undertaken of the AMC facility that examined the modifications that would be required to implement GAP and HACCP. This audit identified a wide range of hygiene problems that prevented effective food safety and plant pest controls being implemented. These included the need for upgrades to flooring, walls, and ceilings to facilitate effective cleaning; rigorous cleaning regimes; effective pest control measures; enhanced maintenance; water treatment facility (including chlorination); removal of debris and obsolete equipment; enhanced bathroom and changing facilities; better drainage; and changes to layout and process flow. The cost of the overall upgrade of the facility was estimated to be US$1.35 million (table 8).

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Table 8. Cost of upgrading AMC facility to GAP and HACCP standards Building Suitability Cost (US$) 3 2-3 pack-houses/processing operations 124,271 4 Processing operation 55,576 2 Pack-houses 118,271 5 Pack-houses/processing operations 244,131 Main 12 pack-houses 804,766 Total 1,347,016

Source: Technological Solutions 2002.

The overall picture in Jamaica is of a system of food safety and plant health management that has not evolved in response to changes in international standards, the requirements of Jamaica’s major trading partners, and the shift in composition of agricultural and food exports toward nontraditional products for which SPS issues are a more important issue. While the basic elements of capacity are in place and existing institutions operate relatively well, enabled by generally high levels of human capital, these institutions are directed at outdated principles and procedures. Furthermore, the current level of resources is clearly inadequate to meet the needs of the export sector and to direct compliance efforts toward a proactive strategy. This proactive strategy must be to foresee emerging problems and offset their impacts before they arise and/or turn them to competitive advantage.3

The limited resources made available for SPS management is compounded by Jamaica’s lack of a clear and coherent administrative structure relating to food safety and agricultural health. In a number of cases, there is a clear overlap of responsibilities with little or no communication and coordination among the agencies involved. Moreover, the allocation of responsibilities to certain agencies does not conform to international norms, as in the case of the JBS. While the necessity to streamline existing administrative structures and, ideally, create a single body with responsibility for food safety and agricultural health has been recognized, efforts toward this end have been delayed through inertia and political debate.

4. CAPACITY BUILDING EFFORTS The Jamaican government has recognized the need to enhance SPS management capacity as part of more general efforts to improve national quality infrastructure. The government has pursued two programs of technical assistance and investment in recent years to address capacity weaknesses and facilitate more effective participation in international standards-setting processes. These are briefly discussed here.

The Agricultural Support Services Project (ASSP) is a four-year, US$31.5 million project, supported by the Inter-American Development Bank (IADB). The project aims to enhance the competitiveness of Jamaican agriculture in domestic and global markets, thereby advancing the goal of increasing the incomes of Jamaican agricultural producers. The project has three 3 For a discussion of strategy related to SPS issues in international trade, see Jaffee and Henson 2004.

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components: (1) strengthening the delivery of agricultural support services; (2) strengthening and consolidating agricultural health and food safety services; and (3) financing selected activities in high pay-off productive projects. The project started in February 2001 and ends in 2005; yet, it is expected to be extended for 2 additional years.

The second component of the project is most pertinent to the focus of this study.4 Up to US$10 million has been allocated to strengthen and consolidate food safety and agricultural health and services in Jamaica. This component aims to improve the effectiveness of SPS management capacity to protect domestic consumers from illness and domestic production from disease and contamination, while ensuring that Jamaica’s exports meet international standards. The main outputs are to be:

Developing an appropriate policy, updating and enacting legislation, and strengthening coordination mechanisms

Hiring/training personnel in food safety, animal health, and plant health

Acquiring relevant equipment and supplies

Strengthening and upgrading pertinent infrastructure

Implementing a public awareness campaign

Developing databases and strengthening record-keeping systems

Updating methodologies

Implementing surveillance programs.

The project is looking to restructure administrative controls for food safety and agricultural health. It has already funded a status report and assessment of the existing systems in Jamaica that focus on legislation and the distribution of administrative responsibilities (see Focal Point 2004). The aim is to create a single agency for all SPS matters that builds on the existing NAHFSCC, which meets monthly and has representatives from MoA, MoH, FSPID, JBS, and JEA. However, an intermediate step toward a single body is likely to be the better definition of administrative responsibilities and enhanced communication and coordination. This single body is likely to be based on the existing NAHFSCC, augmented with a secretariat and legislative powers.

An initial assessment was undertaken of the needs for infrastructural development related to food safety and agricultural health including upgrading buildings, purchasing computers, and training. More recently, an assessment has been completed that confirms whether these identified needs still exist. Two priorities are to upgrade the export complex at Kingston airport and to install fumigation facilities at the complex in Montego Bay. The former includes an expansion of the facility, including extended warehousing area. This expansion is expected to begin in the first half of 2005. Funding has also been provided to upgrade laboratory facilities, for example, at the VSD.

4 Some aspects of the other two components have also been pertinent. For example, under the first component, the

previously mentioned audit of the AMC facility was undertaken plus there are efforts to secure loans for HACCP implementation. Under the third component, various product competitiveness studies have been undertaken and specific investments financed within the private sector.

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Alongside the ASSP, the National Quality Infrastructure Project aims to support the development of national quality policy and infrastructure in Jamaica to enhance international competitiveness. This support takes the form of a technical cooperation project between the Ministry of Industry, Commerce and Technology and the Swedish Board for Accreditation and Conformity Assessment (SWEDAC) with funding from the Swedish International Development Agency (SIDA). The project started in October 2001 and initially was intended to last for 30 months. However, it was extended for two years, and a second extension is expected to be granted in 2005.

The aims of the National Quality Infrastructure Project are:

Developing an overall policy for the organization of national quality infrastructure in Jamaica

Adapting one important product sector to the new principles for technical regulation and conformity assessment

Establishing a national accreditation body

Preparing of selected laboratories for accreditation

Enhancing the activities of the Packaging Department in the JBS.

Specifically related to food and agricultural products, the project aims to develop new legislation consistent with international requirements by reviewing existing legislation and enhancing cooperation among relevant agencies. Furthermore, the project aims to develop proposals for the reorganization of administrative responsibilities for food safety. The scope of the project in this area clearly overlaps with the ASSP, as has been recognized by the Jamaican government. Efforts have been made to coordinate the activities funded by the two projects and prevent duplication of effort.5

The project has funded an assessment of national laboratory capacity to identify the need for assistance to upgrade to achieve international accreditation. In total, this assessment has covered 25 laboratories including those operated by the MoA, MoH, JBS, and FSPID. The project itself funds the establishment of laboratory procedures but not capital investments. In certain cases, funding has been provided by the ASSP, while, in others funding is still to be allocated. In many cases, the sums of money involved are considerable, especially for required major equipment upgrades. Likewise, the establishment of a national accreditation body has been delayed through lack of funding. The national accreditation body will likely not be fully operational until 2006.

The ongoing investments by the Jamaican government both within and outside of the context of the ASSP and National Quality Infrastructure Project clearly highlight the priority that it gives to the development of the country’s capacity to manage food safety and agricultural health, as well as national quality infrastructure more generally. However, the slow progress of many of these efforts reflects the enormity of the task. On the one hand, major administrative reforms are 5 Initially, the National Quality Infrastructure Project was based at the JBS but subsequently moved to the MoH. The

repositioning of the project was deemed necessary because of the standards-setting and certification activities of the JBS that were not conducive to the establishment of the JBS as the national accreditation body. The repositioning created some delays in the project, hence the need for the initial extension to the lifetime of the project. Furthermore, some of the initial activities defined in the work plan took longer than anticipated to complete. In particular, the definition of a national quality policy and associated legislation originally was scheduled to take six months; in practice, it alone took two years to complete.

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required to improve the efficiency and effectiveness of even existing capacity. On the other, considerable investments need to be made in public sector SPS capacity to prevent existing controls from falling further behind the standards-related requirements of international trade. The fact that the Jamaican government has recognized these needs is positive, although it clearly needs to find more effective ways in which to convert its intentions into action.

5. IMPACT OF SPS MEASURES ON AGRI-FOOD EXPORTS

This section examines in some depth the problems that food safety and/or agricultural health standards have imposed on Jamaica’s nontraditional food exports. It focuses on:

Plant pests and health controls on exports of fresh fruit and vegetables, most notably in relation to trade with the United States

Hygiene controls on exports of fish and fishery products, especially for trade to the European Union

Limits on pesticide residues and exports of fresh and processed fruits and vegetables

Food safety and labeling requirements for processed and packaged foods

Food safety controls and the tourism sector.

Like all countries, Jamaica faces routine problems exporting agricultural and food products. While some of these problems are sporadic and reflect the problems experienced by individual exporters, others are continuous and reflect constraints in SPS management capacity. Some indication of the magnitude and nature of the problems that Jamaica faces in regard to agricultural and food exports is provided by data on import detentions, which is available for the United States and European Union. Tables 9 and 10 provide a summary of import detentions in the United States from March 2001 to October 2004. These data were recorded by the US Food and Drug Administration. There were no detentions within the European Union from June 2002 to June 2004, for which data are available.

For Jamaica, problems occur most frequently for fresh and processed vegetables and a range of processed and packaged foods including pepper sauces, seasonings and drinks/juices. With respect to fresh and processed vegetables, these problems relate mainly to residues of pesticides, most notably for callaloo, for which there have been persistent detections of residues that exceed US MRLs. Processed and packaged foods are subject to a wide range of food-safety-related problems, including the failure to have products (and the processes by which they are manufactured) prior approved by the FDA, the use of approved colorants, and labeling infractions. Examining these data more closely, it is evident that even the largest exporters of processed foods are subject to these detentions.

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While these data provide a broad picture of the range of food safety problems faced by exporters of agricultural and food products, in themselves they do little to identify the specific nature of these problems and the extent to which they relate to weaknesses in SPS management capacity. Thus, the authors now turn to certain specific case studies, which represent the major SPS-related problems related to food exports in recent years.

PLANT PESTS AND PHYTOSANITARY CONTROLS ON EXPORTS OF FRESH FRUITS

AND VEGETABLES

As described in section 2, Jamaica has been successful at developing exports of a range of nontraditional fruits and vegetables to Canada, the European Union, and the United States, directed predominantly to markets that serve the African, Asian, and Caribbean immigrant communities in these countries. In the case of exports to the United States, however, there are a number of challenges associated with compliance with phytosanitary controls. Exports of some products is prohibited altogether. In other cases, products can be exported only to certain ports in the United States and/or must be fumigated.

One product that cannot be exported to the United States is mango because both the West Indian Fruit Fly and Caribbean Fruit Fly are present in Jamaica. Furthermore, currently, comprehensive surveillance has not been undertaken to identify the prevalence of these pests and the existence, or not, of any pest-free areas. Exports could be undertaken if mangoes were first subjected to hot water treatment. However, no such facility currently, exists in Jamaica. It is estimated that the cost of constructing such a facility in an existing building would be approximately US$175,000, rising to US$250,000 if a new building were to be constructed. Such a facility could handle 1,000 tons of products per month. It is doubtful whether there is sufficient export-quality Jamaican production and market demand in the United States to support even one such facility. Indeed, no private investor has made such a commitment.6

6 It has been argued that there has been little reason for such investment, given (1) that Jamaican exporters can still

supply to the Canadian and UK markets, (2) that Jamaica does not have any particular seasonal niche in the US market, and (3) competition from much stronger suppliers—including Brazil, Haiti, and Mexico—in which there has been widespread investment in hot water treatment systems and the realization of economies of scale. Jamaica

Table 9. US border detentions of Jamaican food products, March 2001–October 2004, by product

Commodity Frequency Vegetables 61 Callaloo 35 Ackees 13 Yam 6 Dasheen 4 Breadfruit 1 Aubergine 1 Beans 1 Drinks/juices 30 Sauces 29 Seasonings/flavorings 19 Confectionery 9 Fish 7 Dairy products 18 Tea/coffee 5 Baked goods 3

Source: USFDA.

Table 10. US border detentions of Jamaican food products, March 2001–October 2004, by reason for detention

Reason Frequency No process 85 Low-acid canned food 66 Labeling 27 Pesticide residues 24 Unsafe additives/colors 18 Filthy 11 Poisonous 9 Salmonella 4 Can leak/swell 2 Unapproved 1

Source: USFDA.

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As described in section 3, responsibility for the inspection, treatment, and certification of fresh fruit and vegetables with respect to plant pests lies with the PQ/PI Unit, which has an annual budget of US$1.4 million. This unit operates two one-stop facilities at the international airports in Kingston and Montego Bay. The Kingston facility was developed through a World Bank loan provided in 1989 and then extensively upgraded in the late 1990s with a government investment of over JMD30 million. The facility in Montego Bay was acquired from the Airports Authority by the MoA, which refurbished a section of the old charter terminal in 1996. This facility does not have cold storage. Both facilities are being further upgraded through the ASSP.

Table 11 details the interceptions of plant pests and diseases by the PQ/PI from 1999 to 2003. Certain products have persistent problems with particular pests or diseases, for example, callaloo, papaya, and jack fruit. Where problems are identified, the PQ/PI Unit undertakes inspections of farms and pack-houses to identify the sources of the problems and potential solutions. However, the unit is hampered by the lack of active surveillance for many pests, which weakens its position in negotiations with trading partners. Furthermore, the fragmented nature of the supply chain–with sourcing through middlemen and lack of effective controls in pack-houses–means it is difficult to implement effective control measures. Furthermore, although the trade is dominated by 35 regular exporters, there are many more that enter and leave the market from month to month. These sporadic exporters have little economic incentive to implement more effective plant pest controls. A notable exception, however, is papaya, exports of which are in the hands of three integrated producer-exporters (discussed below).

Table 11. Interceptions of fresh produce for export to all destinations, 1999–2003

Product 1999 2000 2001 2002 2003 Assorted roots 2 3 4 1 Avocado 2 1 2 2 Banana/plantain 1 1 1 1 Basil 1 1 Breadfruit 35 20 5 26 15 Callaloo 17 13 32 24 18 Cerasse 1 Coco 1 1 1 Coconut 1 Dasheen 12 6 12 8 9 Egg plant 1 Escallion 1 4 2 1 Flowers 9 15 9 10 1 Guinep 1 3 5 3 3 Ginger 1 Jack fruit 15 20 17 25 12 Gungo peas 11 Mango 1 1 2 1

thus faces something of a “chicken and egg” situation, in which investment in this phytosanitary treatment would be worthwhile only if parallel investments were being made in plantings/orchards of improved mango varieties.

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Table 11. Interceptions of fresh produce for export to all destinations, 1999–2003

Product 1999 2000 2001 2002 2003 Papaya 25 1 8 2 Pineapple 2 1 Pepper 10 2 16 9 Pumpkin 2 5 4 4 1 Sorrel 3 7 28 4 7 Sorrel leaf 1 Sugar cane 1 1 Sweet potato 1 1 1 1 Star apple 1 Tindora 1 Thyme 1 4 1 Tobacco 1 1 Tumeric 1 Yam 7 8 6 6 1

Source: Plant Quarantine and Product Inspection Division, Ministry of Agriculture.

To facilitate exports of nontraditional fruits and vegetables to the United States, a preclearance program was established in 1984 with support from USAID. The preclearance program operates at the one-stop export complexes in Kingston and Montego Bay. It is operated by an APHIS resident officer and three Foreign Service Nationals who provide oversight of the inspections by PQ/PI officials to preclear exports to the United States. Currently, 49 products and cut flowers are approved for preclearance in Jamaica. Exports to other destinations are inspected and certified separately from the preclearance program.

It is evident that the Jamaican government has guarded the preclearance program against problems that might jeopardize its integrity in the eyes of APHIS. For example, the government requires a 10 percent level of inspection of all produce, whereas the APHIS requirement is only 2 percent. Where problems occur, the government is quick to act, even going so far as to suspend products from the program. For example, there have been persistent interventions of plant pests during preclearance on callaloo, as a result of which the MoA voluntarily removed the option of preclearance so as not to devalue the program as a whole and to prevent the imposition of a fumigation requirement by the US authorities. In such cases, the APHIS officials in Jamaica also work closely with the MoA. In the callaloo case, for example, they suggested that farmers be certified following surveillance by RADA, with exporters demonstrating their sources of supply through some form of traceability system. Likewise, detections of mealy bugs in jack fruit have been recorded at the 20 percent–25 percent level. To prevent the suspension of this product from the program, both PQ/PI Unit and APHIS officials undertook inspections of pack-houses and demonstrated the checks needed to detect this insect. Since that time, detections have declined.

Since 1996, the preclearance program has been self-supporting.7 Initially, it was operated by the JEA, but in 2001 control of the program was assumed by the MoA with funding from a 20 percent cost recovery inspection fee. In principle, the cost of the scheme should be covered by

7 Before that, it was supported by USAID.

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this fee. However, since the late 1990s, the scheme has run into arrears. Indeed, the MoA considers the program to be rather costly to operate; the budget for 2003–04 was US$390,000 representing 25 percent of the total budget for the PQ/PI Unit. Much of this cost is associated with the resident APHIS official. The PQ/PI Unit would like to operate the preclearance program itself without a resident APHIS official, given that the unit already undertakes the vast majority of inspections and the official is present only to provide oversight. This change would allow a savings of some US$150,000 per annum. However, there is no example of this elsewhere, and it is highly unlikely that the US government would agree to such a proposal.8

The preclearance program confers a potentially significant competitive advantage on Jamaica over its regional competitors. Moreover, Jamaica is a rather special case in that it is the only country in which in-country fumigation is accepted by APHIS. Once a consignment has been precleared, exporters can be confident that it will be admitted at the US border. APHIS officials at the border generally undertake only periodic integrative checks unless persistent problems are identified. This program significantly reduces the risks associated with fresh produce exports to the United States. If a consignment is rejected at the border, the cost in terms of freight and the value of the rejected product is typically very high. Indeed, some exporters in the region do not export to the United States because of the risk of possible rejection at the border. At the same time, exporters can choose whether to preclear their consignments, and absorb the cost involved, or take the risk of US border inspection. Exporters of products that are not precleared lose the option to divert their consignments to other destinations if the products are rejected, because the latter are automatically destroyed at the point of entry. In the case of yam, for example, only 50 percent of exporters are fumigated and precleared in Jamaica. Conversely, almost all hot peppers and breadfruit are precleared.

To some extent, the use of the preclearance program along with other elements of phytosanitary controls can be regarded as a public good. If rates of detection of plant pests and diseases are low, all exporters will face reduced rates of inspection at the US border, diminishing their costs, reducing delays, and, in turn, enhancing product quality and shelf-life. Thus, some government officials and industry representatives have argued that there should be a regulatory requirement for all exporters to use the preclearance program. Indeed, it is evident that rates of interception of plant pests and diseases in Jamaican agricultural and food exports have declined since the early 1990s, although with a major surge during 1997 and 1998 related to the specific problem of hot peppers (see below) (figure 5). These data suggest that there may be a major pay-off from more effective phytosanitary controls.

8 During the past four years, the volume of produce going through the preclearance program has actually declined as

some exporters have opted to save money and take their chances with potential border detentions at US entry points. In other countries, including Chile and Haiti, export associations have made it mandatory to use such preclearance programs. While Jamaican exporters are concerned with the fees charged, they generally amount to only approximately 1 percent of the FOB value of produce.

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Figure 5. Total US interceptions relating to phytosanitary controls on exports from Jamaica, 1990–July 2003

Source: APHIS.

Jamaica’s experiences with the preclearance program illustrate the considerable benefits that can be achieved from being proactive in implementing and managing phytosanitary controls. It also highlights the potential advantages to be gained from establishing an active relationship built on trust and cooperation with the regulatory authorities in a major export market. At the same time, however, Jamaica is still experiencing considerable problems with exports of certain products to the United States, which reflect prevailing capacity problems through the supply chain and with respect to public phytosanitary controls. A case in point is hot pepper, discussed in detail below.

HOT PEPPERS

Hot peppers have been identified as a priority crop by the Jamaican government, aimed at both local markets and exports to Canada, the United Kingdom, and the United States. The government also promotes hot peppers as a suitable crop for small producers to enhance income. In 2000 a plot size of only 0.005 hectares (ha), which can support approximately 1,000 plants, was estimated to produce a weekly income of JMD10,000 at current market prices. An assessment in 1998 also identified hot peppers as having significant potential as an export crop for the Caribbean region as a whole (FAO/IICA 1998). Nevertheless, despite the efforts of the MoA and regional organizations such as the Inter-American Institute for Cooperation in Agriculture (IICA) and the Caribbean Agricultural Research and Development Institute (CARDI), the planted area of hot peppers since the mid-1990s has been in decline. Overall production has also fallen, despite some productivity gains (figure 6). Jamaica is recognized as

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an important producer of the Scotch Bonnet cultivar, a yellow hot pepper with a fruit shape that has traditionally been grown for local consumption.9 Figure 6. Hot pepper plantings and production, 1990–2003

Source: Ministry of Agriculture.

Jamaica has managed to sustain a certain level of exports of fresh hot peppers, although the current trade is below what it was a decade ago (figure 7). In the hot peppers trade, Scotch Bonnet is the most notable, even though it exhibited little or no growth through the 1990s (figures 10 and 11). In 2003, only 310 tons of hot peppers were exported, valued at US$696,000. Exports of hot peppers have suffered from a number of marketing and production problems (Dormer 2003, McDonald 2001, Stewart and Fletcher 2000). Most production is rain-fed and highly variable according to the weather, making it impossible to synchronize supply with market demand. Furthermore, productivity in Jamaica is significantly lower than in certain other parts of the Caribbean, most notably Trinidad and Tobago (McDonald 2001). This low productivity is exacerbated by ad hoc and weak procurement and distribution systems. Product quality is also highly variable, due in part to the insufficient availability of high quality seed.

Perhaps the greatest impediment to Jamaican fresh hot pepper exports is the domestic market. Jamaica is actually a net importer of hot peppers, and there is a healthy demand from both local 9 However, this cultivar is more prone to certain pests and diseases than the West Indian Red, which is widely grown

elsewhere in the Caribbean. CARDI, in collaboration with the Jamaican government, has worked on establishing sustainable hot pepper production in Jamaica through the introduction of a high-yielding cultivar of the West Indian Red pepper and adoption of improved technologies validated in the Eastern Caribbean, including efficient use of fertilizer and effective pest management practices. This cultivar has been demonstrated to be more resistance to the major pests and diseases found in the Caribbean. Moreover, using current production practices, its marketable yields are 34%–122% greater than those of the Scotch Bonnet cultivar. Simultaneously, the Jamaican government has worked on improving the Scotch Bonnet cultivar in terms of tolerance to the most prevalent pests and diseases.

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consumers and manufacturers of hot pepper sauces. In the late 1990s, exports typically accounted for only approximately 5 percent of total production. Indeed, the domestic market price frequently exceeds the export price. Combined with the additional risks and problems, this higher domestic price frequently makes exports an unattractive proposition. The phytosanitary problems experienced with exports to the United States that are described below have made matters worse, largely explaining the decline in exports since the high of the mid-1990s.

Figure 7. Exports of hot peppers, 1994–2003

Sources: Jamaican Exporters Association and FAOSTAT.

In 1997 the United States detected an infestation of gall midge on hot peppers from Jamaica, a pest that is not normally a problem with peppers. The gall midge is widely established in the region and is not a quarantine pest under international protocols. In fact, Jamaican research has shown the presence of the gall midge in Florida. However, as a result of this infestation, the United States implemented a mandatory requirement for fumigation with methyl bromide. This mandatory fumigation applied to all peppers exported from Jamaica, including bell and chili peppers, although gall midge had been detected only in hot peppers.

The Jamaican government was proactive in addressing this problem, quickly establishing a National Pepper Task Force to identify the source and potential corrective actions. For example, the PI/PQ Unit began inspections of shipments prior to fumigation at the two export complexes. These inspections confirmed that gall midge is found on hot peppers at very high rates, especially during rainy months, with over 70 percent of shipments being infected in certain months. However, at the same time, the MoA questioned the justification for the action taken by APHIS and requested documentary evidence. Repeated requests for such documentary evidence have been made since 1998, to no avail.

The fumigation requirement for hot peppers has had a significant impact on the competitiveness of Jamaican exports in terms of both price and quality. Most Jamaican peppers can be sold in the United States only for processing rather than the fresh market. Fumigation with methyl bromide

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increases the cost of exporting hot peppers in comparison with competitors in the Caribbean that do not face a similar requirement.10 Furthermore, it causes physical damage to the product, including loss of sheen, and reduces the shelf life. As a result, exports to the United States have virtually collapsed.11

Figure 8. Number of US interceptions of hot peppers from Jamaica, 1990–July 2003

Source: APHIS.

In response to the concerns raised by the Jamaican government (and also by the US ambassador to Jamaica), in 2002 APHIS and the National Hot Pepper Task Force developed a set of guidelines to facilitate the removal of the fumigation requirement. The result was a 10-point system based on sourcing product from areas identified to be free of gall midge and on rigorous controls through the supply chain to the point of export (box 2). This system concurred with the task force’s own perspective that the means to resolve the problem was to reduce the incidence of the pest in the field. The system also built on research on integrated pest management (IPM) in Jamaica done under a Collaborative Research Support Program (CRSP) funded by USAID (Norton 2003).

10 This fumigation cost is equal to approximately 8% of the FOB value of hot peppers (APHIS estimate). Jamaica

already operates at a cost disadvantage with other competitors. While unit costs of production average between $0.14 and 0.22/lb.in Belize, Dominica, Grenada, and Trinidad, Jamaica’s Hot Pepper Focus Group found the average production costs for Jamaican Scott Bonnet peppers to equal $0.32/lb.

11 Hot pepper exports to the United States fell from over 200 tons in 1997 to only 25 tons in 2002 and 2003.

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Box 2. APHIS conditions to remove the fumigation requirements for hot pepper exports to the United States

This 10-point system was arrived at collaboratively by the Jamaican National Hot Pepper Task Force and the US Animal and Plant Health Inspection Services (APHIS) in 2002. The system is based on sourcing hot peppers from areas identified to be free of gall midge and on rigorous controls through the supply chain to the point of export.

1. Only precleared peppers would be eligible for entry without fumigation.

2. Shipments would be pre-inspected by the Jamaican Ministry of Agriculture (JMOA) and be accompanied by a phytosanitary certificate stating, “Shipment free of cedidomyiid midge based on field controls and inspection.”

3. APHIS preclearance personnel must participate directly in each of these preclearance inspections.

4. Only growers participating in the field control program will be allowed to ship without fumigation. These growers need to be listed by JMOA or the Rural Agricultural Development Authority (RADA) and certified as participating in the “non-Treatment Program” and the “trace-Back Program”.

5. All growers and packing facilities will display colored posters indicating midge symptoms. Both growers and packers will be instructed to cull fruits with such symptoms.

6. Fruits found with the midge or eggs will be rejected or fumigated. Reconditioning will not be allowed. The stems of 29 fruits will be cut and inspected for the midge. The stem cutting should be aimed toward any fruit showing the symptoms. Cutting will not be required for “de-stemmed” shipments. Inspections for “stem-less” peppers should be conducted on double-bottomed tables.

7. If the rejection rate for all quarantine pests reaches 15 percent, all peppers will require fumigation.

8. Pepper shipments can also be precleared with treatment or shipped without preclearance for treatment in the United States. Shipments inspected in Jamaica and found infested cannot be shipped for treatment to the United States.

9. Growers with shipments rejected once for the midge will be removed from the program. These growers can apply for re-admittance by applying for a RADA/JMOA field inspection. If compliance with the program can be assured, the grower could be reinstated. Growers with a second rejected shipment will not be allowed in the “Non-treatment Program” for the remainder of the season. After a full review by RADA/MOA has been undertaken and corrective mitigations have been implemented, the grower may apply for reinstatement for the next year.

10. Each inspection site should have at least one inspection table that has slats or mesh bottoms, which allows hitchhikers or midges to be shaken through and captured on a solid secondary bottom. At a minimum, sorrel and stem-less peppers should be inspected on these tables.

To date, the 10-point protocol has not been implemented by the Jamaican government, and all shipments remain subject to compulsory fumigation. Surveillance by RADA has indicated that there are no areas of economic significance in Jamaica that would produce levels of infestation that could be controlled at pack-houses. The lack of implementation of the protocol reflects the fact that most exporters do not consider the required changes and efforts to be worth the inconvenience nor the requisite staff time to be cost-effective. Indeed, many have chosen to cease exports to the United States to avoid exposure to the risk of rejection at the point of entry. More generally, the supply chains remain highly fragmented, making it difficult to achieve effective traceability. Although some progressive exporters have made efforts to improve the coordination of their supply chain, they have faced resistance from producers, many of which are

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small and owned by older age groups, who see little reason to change when the domestic market remains lucrative. Finally, even the progressive exporters are concerned that their efforts will be in vain. The 15 percent detection level for all actionable pests specified in the 10-point protocol means that these farmers run a significant risk that a fumigation requirement will be re-imposed

This case illustrates the very considerable problems that phytosanitary controls in the United States can and have caused Jamaican exporters of fresh fruits and vegetables. While the Jamaican government was proactive in responding to the emergence of gall midge as an issue for hot pepper exports, the pay-offs from these efforts have been minimal. The requirements remain in place. Whether they are justified scientifically remains an open question. The nature of the hot pepper supply chain renders most system-based controls ineffective. Clearly, there is a need for enhanced integration and consolidation of production. Indeed, the 10-point plan defined by APHIS is a potential source of considerable competitive advantage to an integrated producer-exporter. However, at the same time, such an entrepreneur would be reliant on more general efforts to control the pest more widely, highlighting the public good nature of phytosanitary controls.

HYGIENE CONTROLS FOR FISH AND FISHERY PRODUCTS

Through the 1990s, Jamaica established a small but lucrative trade in fish and fishery products, valued at US$16–19 million in the late 1990s (figure 9). Exports consist predominantly of conch, tilapia (from aquaculture production), and lobster. Indeed, Jamaica has been a major player in the international market for conch, with most exports destined for the French Caribbean territories of Guadalupe and Martinique, and smaller quantities exported to the United States and other parts of the European Union. Overall, fish and fishery products accounted for 1.2 percent of total merchandise exports in 1999.

Figure 9. Jamaican exports of fish and fishery products, 1985–2003

Sources: FAOSTAT and COMTRADE.

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In mid-2004, the export supply chain consisted of 8 processing plants, of which 5 or 6 handle predominantly conch. Some processing plants operate their own boats that collect the landed conch from small vessels. Others purchase from boat owners who have quota (see below) and/or process for them under contract. One processor produces its own tilapia using aquaculture as well as contracting production from other aquaculture operators. Overall, the Jamaican fishery industry employs 20,000 fishers along 184 landing beaches and 3 off-shore keys. However, many of these fishers are not involved in the export supply chain, and indeed have been excluded from it due to stricter hygiene requirements (see below).

Through the late 1990s, exports of fish and fishery products, and conch in particular, were compromised by two major issues. First were the hygiene requirements imposed by the European Union on fish and fishery products. Although promulgated in 1991, these requirements were not fully implemented until the end of the 1990s.12 The second issue was the controls on landed volumes of conch due to the CITES convention on endangered species. Each issue is described below.

Historically, the fish processing sector in Jamaica was largely unregulated with respect to the approval and certification of products for export. While the Veterinary Public Health division of the MoH was responsible for inspecting processing facilities, there was no effective mechanism through which compliance with food safety requirements in export markets could be assessed. This latter function fell under the responsibility of the VSD, which lacked the inspection capacity and arguably had no legislative power to undertake such inspections and certify products. As a result, the controls in place fell far short of the hygiene standards required to be in place for exports to the EU.

The European Union had established a deadline of June 31, 1998 for countries to have implemented hygiene controls that were at least equivalent to its own requirements for bivalve mollusks, echinoderms, tunicates, and marine gastropods.13 Countries that had not achieved this were prohibited from exporting to the European Union. The latter included Jamaica, which overnight lost its main markets for conch. Jamaica was, however, permitted to export other fish and fishery products on a provisional basis and was included in Part II of the list of approved countries.

Table 12. Major fish and fishery product exports, 1999–2003 (kg)

Year Conch Tilapia Lobster Other 1999 43,636 306,975 1,796 2000 0 250,193 56,280 1,457 2001 1,065,024 358,747 25,645 0 2002 265,670 282,182 28,482 45 2003 363,038 183,827 116,100 53,933

Source: Ministry of Agriculture, Kingston.

In response to these restrictions, the Jamaican government implemented the necessary legislative reforms and promulgated the Aquaculture, Inland, Marine Products and By-products (Inspection, 12 For a discussion of the nature of the EU’s hygiene requirements for fish and fishery products, see Henson and

Mitullah 2004. 13 These are shellfish that filter feed off of plankton and other small creatures. In circumstances in which their living

environment includes contaminated water, it is ingested into these creatures. Other common examples of such species include oysters and clams.

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Licensing and Export) Act in 1999. This Act was broadly based on the respective EU legislation, namely, Directives 91/492/EC and 91/493/EC. The Act identified the VSD as the Competent Authority. However, when the European Commission undertook inspections in April 1999, it found a number of remaining violations:14

Although the relevant national legislation was broadly equivalent to EU legislation, it had not been entirely implemented. Furthermore, monitoring of production conditions were not considered adequate and were not fully documented.

The majority of processing establishments did not comply with EU requirements, for example, regarding water control, pest and vermin control, and general conditions of maintenance and production.

Although the implementation of HACCP had commenced in many processing plants, in most cases, Critical Control Points had only been identified and were not being implemented, monitored, or verified.

Laboratory facilities for certain microbiological analyses and residue testing were considered inadequate.

The EC made a second inspection visit in April 2000, which identified limited continued discrepancies.15 The Jamaican government subsequently provided written assurances that these discrepancies had been rectified. Consequently, in December 2000 the EC established special import conditions for Jamaica, and it was added to List I of the list of approved countries. These conditions included the defined area from which conch exported to the EU could be derived, namely, Pedro Bank. Thus, as of February 2001, Jamaica was able to recommence its conch exports. Initially, 3 plants were approved to export to the European Union, although this number now stands at 6, with an additional 6 freezer vessels also approved.

The Jamaican government’s response to the EU’s hygiene requirements was delayed, and the reforms took a considerable period to implement. These delays in part reflect the fact that exports of other fishery products were permitted to continue during this period, while there was no capture of conch during 2000 (see below). However, the delays also resulted from the considerable investments that had to be made, estimated at US$1.25 million. For example, coherent mechanisms to approve processing plants, issue export health certificates, and monitor water and fish for environmental contaminants had to be put in place. The VSD did not have the number of inspectors required to undertake these tasks and signed a memorandum of understanding (MOU) with the MoH to gain access to its inspectors who were already present in fish processing plants. Laboratories needed to be upgraded to perform the required analyses, including investment in HPLC equipment. Most of these expenses were directly funded by the Jamaican government.

The government is facing considerable ongoing costs associated with further upgrades in capacity and operational expenditures. It is acknowledged that current capacity represents the “bare bones” of what is required and that further investments will be needed, especially in laboratory testing capacity. For example, the VSD laboratory is not accredited by an approved accreditation agency, although certification is scheduled to be rectified under the National Quality Infrastructure Project and is planned for early in 2005. Furthermore, the VSD laboratory 14 Report XXIV/1985/99-ME Final. 15 Report DG (SANCO)/1166/2000-MR Final.

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does not have the equipment to tests for dioxins or steroids and cannot perform quantitative analyses of antibiotics. There is also concern at the magnitude of the costs to maintain this capacity. Although fees are levied for laboratory analysis equal to 50 percent of the total cost, the government makes no equivalent charge to inspect processing facilities. Although the government acknowledges that some form of cost recovery is required, currently, doing so is considered politically unacceptable.

Considerable investments and changes in procedures were also required by fish processing facilities (boxes 3 and 4). It is acknowledged that most plants started from a situation in which hygiene controls were largely absent. Thus, the estimated average cost per plant is US$750,000, suggesting an industry-wide cost of US$4.5 million. Although all of the plants that have been approved have made very significant improvements, they still remain reliant on external capacity. For example, none of these facilities has laboratory capacity and utilize the VSD to undertake the required tests. As described above, 50 percent of the cost of these tests is subsidized by the Jamaican government.

The Jamaican government has expressed concern, although not formally to the European Commission, that the European Union’s requirements are inappropriate for a deep water fishery such as Pedro Bank. Specifically, Jamaica claims that the maximum levels and monitoring requirements for coliforms and biotoxins are more applicable to the in-shore and shallower waters in which bivalve mollusks, echinoderms, tunicates, and marine gastropods are typically produced in Europe. However, there are also claims from the fish processing sector that the Jamaican government has interpreted some aspects of the European Union’s requirements too strictly, in particular, the requirement for fishing boats to have toilets, which effectively excludes small artisanal boats.

Because conch is a recognized endangered species, harvesting it is restricted under the CITES Convention. Conch was added to CITES in 1992. Subsequently, a survey was undertaken by the Jamaican government and the conch population monitored to assess the maximum sustainable harvest in any one year from Jamaican waters. The controls take the form of an export quota set under the CITES Convention. Currently, the sustainable harvest from Jamaican waters is estimated at approximately 900 tons. However, there is significant poaching by neighboring countries, especially in Central America, so the actual quota is generally significantly below this level. The United States banned imports of conch from some of these countries, notably the Dominican Republic, Haiti, and Honduras for 6 months in 2003 because they did not have an established quota system. In 2003 the total allowable harvest in Jamaica was 500 tons, although this increased to 550 tons in 2004.

Within Jamaica, an annually renewable quota is distributed by the Jamaican government to named individuals to harvest conch in fulfillment of the export quota set by CITES. Historically, the quota to harvest conch was distributed by the Jamaican Government under a conch management plan based on a “gentleman’s agreement.” Currently, however, the quota is based on a formula that takes account of historical involvement in conch harvesting, ownership of a motorized vessel, and use of artisanal fishers. These revised criteria led to a significant redistribution of quota, which in 1999 motivated one quota-holder to legally dispute the authority of the MoA to allocate quota. Although the dispute was eventually settled out of court, it prevented any quota being distributed, and therefore any harvesting, in 1999 and 2000. Thus,

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there were no exports in these years irrespective of the restrictions on exports to the European Union.16

Box 3. Reform of fish hygiene controls by Firm A

This company started as a small exporter of fresh fish to New York in 1983. It started harvesting and processing conch in 1984–85. Its major export market for conch is the European Union, although it has exported to the United States when the EU market has been closed. Their current quota is 81.8 tons per annum, which is harvested with their own vessel. Currently, all exports of conch are to the EU, namely, Guadalupe and Martinique. The company also exports lobster, although supply problems have limited their ability to fully develop this trade.

The company saw the need to upgrade its facilities and started construction of a new processing plant in 1996. Operations started in the new facility in 1998. However, when the processing plant was inspected by the European Commission in 1999, a number of major violations were identified, and significant additional investment was required. The company was visited again as part of the second round of inspections by the European Commission in 2000. It achieved approval to export to the EU as part of the first cohort of companies in 2001.

The upgrades required to comply with the EU’s hygiene standards included record-keeping, pest control, water monitoring, sanitation, microbiological and chemical contaminant analyses, and enhanced plant maintenance. Freezer capacity had to be increased to enable product to be stored until the results of laboratory analyses were available. On-site ice-making facilities were also installed; previously, ice had been purchased. Although HACCP was nominally in place as a response to US requirements, major changes were needed to ensure effective monitoring of CCPs and verification. The vessel also needs to be upgraded, including installation of stainless steel storage containers, toilet facilities based on the number of crew, and a freezing system. Most of the resources used to make these improvements were borrowed, and the company is still repaying this debt.

The combined impact of the various restrictions and dislocations are apparent in the recent pattern of Jamaica’s fishery product exports. Nevertheless, the country should now be in a position to better compete, particularly for conch. Most other countries that hold CITES quotas to harvest conch, including the Bahamas, Belize, Colombia, Dominican Republic, Haiti, Honduras, and Puerto Rico, are not approved to export to the European Union. Thus, Jamaica should be virtually a monopoly supplier of conch, a position entirely created by the EU’s hygiene standards for fish and fishery products with which only Jamaica has achieved compliance.

16 Currently, 9 individuals hold quotas to harvest conch in Jamaica, of whom 6 operate processing plants and 3 have

a fishing boat but no plant. Of these processing plants, five are approved to export to the EU. However, one of these plants accounts for a significant proportion of the total volume of conch being processed. Two plants have ceased operating due to the costs of complying with stricter hygiene requirements.

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Box 4. Reform of hygiene controls by Firm B

This Jamaican company started as a shrimp farm in 1983 but switched to farming fin fish in 1987–88. Its emphasis is now almost entirely on red tilapia. Historically, the company has supplied both domestic and export markets, although the latter have declined in the face of new and intense competition from Ecuador. Ecuador started exporting tilapia after the collapse of its own shrimp aquaculture due to disease. That country is now the world’s largest exporter of tilapia and dominates the US market. Currently, exports of Firm B account for approximately 15 percent of sales, most of which are directed at the European Union. Frozen prepared products are sold to local and regional markets, including major fast food chains and hotels.

The company has its own production covering 205 acres and also contracts 11 farmers. It supplies fingerlings and feed to these contractors under credit. VSD inspects these farms on a regular basis, at considerable cost to itself. In all cases, the company stocks and harvests the fish itself. Fish are brought live from the production sites to the factory for slaughter and processing.

The processing facility has been upgraded extensively to comply with EU hygiene requirements at a total cost of approximately US$2 million. HACCP and ISO 9000 were implemented in 1998, in part to comply with US requirements. However, additional upgrades were required including documentation, pest control, monitoring of water, and microbiological and chemical analyses. The facility was inspected as part of the two European Commission inspections. Production costs have increased as a result of these enhanced hygiene controls, although the company considers that the benefits outweigh the costs. It also claims to have gained a competitive edge over other Jamaican and Caribbean companies, in that the enhanced controls exclude companies with lower standards and erect barriers to entry. Indeed, the company has been visited by all its European customers, which include some major UK retailers, and uses this fact to emphasize the efficacy of the hygiene standards with which it now complies. Other issues loom, however. Economical feed supplies come from the US, but the company cannot certify that this feed is GMO-free, as some of its buyers require.

Jamaica’s effort to address stricter hygiene requirements for fish and fishery products in the European Union can be categorized as reactive compliance. Initially, investments were made to comply with US food safety regulations, including the implementation of HACCP, although standards generally remained lax. However, it was not until the loss of access to EU markets, mainly the French Caribbean territories, that concerted efforts were made across the industry by both the public and private sectors to upgrade hygiene controls. Broadly, these efforts were predominantly driven by the public sector. Indeed, the continued compliance by most fish processing plants remains dependent on the laboratory testing services provided by the MoA, given that it is not considered economically viable for individual processors to make investments in such facilities. Some processing plants have exited from the sector altogether, while others have not achieved approval to export to the EU and focus instead on the United States and regional markets. An additional irony is that, while Jamaica lost access to the EU for 17 months, the fact that its major competitors in the market for conch have not yet achieved compliance is a major competitive advantage.

PESTICIDE RESIDUES IN FRESH FRUIT AND VEGETABLES

An ongoing issue in the export of nontraditional fruits and vegetables to Canada, the European Union, and the United States is Maximum Residue Limits (MRLs) for pesticides. On the one hand, the specter of seemingly ever stricter limits hangs over the industry and is seen as a potentially major threat to the future development of trade in these products. On the other hand,

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specific problems have been experienced with residues of agrochemicals, most notably with yams (see below) and callaloo.

In Jamaica, responsibility for control of pesticides lies with the Pesticides Control Authority (PCA), a semi-autonomous agency of the MoH. The PCA is responsible for registering pesticides, licensing imports, and registering/licensing pesticide retailers and pest controls operators. In the case of pest control operators, the responsibility for licensing is shared with the FSPID regarding stored commodities. Broadly, these controls provide a comprehensive framework for the regulation of pesticides. It also is evident that controls have been enhanced in recent years, at least in relation to retailer distributors (figure 10).

The major weakness in the use and control of pesticides lie in agricultural production.17 As described above, Jamaican agriculture is characterized by small holdings operated predominantly by farmers from older age groups. Overall, there is a lack of awareness and training in the appropriate use of pesticides including GAP, application procedures, and preharvest intervals. Efforts have been made by RADA to train farmers in the appropriate use of pesticides, although these efforts have not been extensive due to resource limitations. In many cases, such training has been sponsored by the agrochemical companies and essentially has addressed how to address particular pests using their products rather than limiting the use of pesticides overall. There is also a lack of crop-specific approval of pesticides in Jamaica with many chemicals being approved for agricultural use in general. More generally, there is chronic misuse of pesticides in Jamaica, with application of chemicals that are available, often at the wrong concentration, frequency, and/or interval before harvest (Reid 2000).18

17 As an example, one crop that has been subject to repeated detentions and rejection at the US border is callaloo,

including both the fresh and canned product. The MoA has acknowledged that there are problems with pesticide use in the production of this crop, and efforts have been made to introduce alternative agronomic practices. For example, callaloo is one of the focus crops of the CRSP (IPM) Program in Jamaica being coordinated by CARDI. In practice, however, efforts to introduce IPM methods have met with resistance from farmers. Indeed, there is little incentive to change established practices when the domestic market predominates. At the same time, pesticides are generally packaged in quantities that are inappropriate for small-scale production and have dilution instructions that are for inordinately large volumes. These instructions confuse farmers and can lead to excessive concentrations being applied. To address these issues, action is required on the part of the PCA.

18 To a certain extent, and ironically, pesticide misuse may have been exacerbated by the preclearance program for exports of fresh produce to the United States, because producers have responded by increasing pesticide use to prevent detection of pests.

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Figure 10. Number of inspections by Pesticides Control Authority, 1999–2003

Source: PCA 2003.

A great concern for Jamaica is that MRLs have not been established, either internationally through the Codex Alimentarius or by its major trading partners, for many of its nontraditional fruit and vegetable exports. As discussed above, Jamaica’s trade in this area consists of a large number of local varieties, all of which are minor in world trade. For this reason, there is little or no motivation for agrochemical companies to furnish the data on which an MRL might be established. The result is that a limit at the level of determination (LOD) is applied during border inspections in the European Union and the United States. Combined with the lack of effective controls on pesticide use, this lack of established MRLs is perceived to present a serious threat to the trade in such products.

Since 1993, the European Union has been implementing a program to establish harmonized MRLs for foodstuffs (Jaffee 2003). This program aims to overcome inconsistencies in the national limits of Member States.19 Alongside the establishment of MRLs, there has been an ongoing review of pesticides approved for use in the EU. Under this program, all active ingredients approved before July 1993 are being reviewed. It is anticipated that a significant proportion of currently approved active ingredients will be withdrawn. In the case of importers,

19 MRLs have been established where sufficient data are available for specific crop/active ingredient combinations.

Where data is unavailable or insufficient, the MRL position has been left in an “open position” for a limited period of time, during which data (collected in accordance with strict procedures defined by the EU) can be submitted. Once this period has expired, the MRL is set at the Limit of Determination (LOD). While data can be submitted to defend the establishment of an MRL after this period, in practice it can take a considerable period, extending into years, to gather the required data.

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however, tolerances may be granted subject to the submission of approved data on the hazards to consumers.

The Committee for Liaison among Europe, Africa, the Caribbean and the Pacific (COLEACP), has recognized the problems faced by exporters of fruit and vegetables from the ACP States and has implemented a Pesticides Initiative Programme (PIP). As part of this program, information has been gathered on pesticides used in ACP countries and an action plan launched for the collection and collation of data to support the establishment of MRLs for crops of interest to ACP countries. Furthermore, advice has been provided on immediate measures that should be adopted by producers and exporters, including harvest intervals, choice of pesticides, and use of post-harvest pesticides. In the case of Jamaica, relations with the PIP started in 2000. One of the areas being addressed is the possibility of the established MRL for sweet potatoes being recognized for yams. However, to date, Jamaica had not seen results from these efforts.

YAMS

The one crop that has suffered from persistent problems due to pesticide residues is yams. Jamaica grows a combination of both yellow and other yams that are supplied to both domestic and export markets. Major export markets are Canada, the United Kingdom and the United States, predominantly directed at the African and Caribbean immigrant communities. More than 5 percent of the agricultural area in Jamaica is dedicated to yam production, although both the planted area and production declined through the 1990s. In recent years, national yam production has been approximately 150,000 tons, of which approximately 10,000–12,000 tons are exported. Jamaica accounts for approximately 50 percent of world exports of yams, the other important suppliers including Brazil, Costa Rica, and Ghana.

Yams are grown predominantly by small farmers in Jamaica and are an important source of income.20 Producers sell their yams to middlemen who supply both domestic markets and exporters. Yams are selected in the field with the aim of minimizing rejects at the exporter’s pack-house. The key quality characteristics examined by exporters include cleanliness; similar varietal characteristics; shape; maturity; and the absence of nematodes, physical damage, and disease. A typical exporter may routinely source from 200 producers, with whom s/he has no direct relation, and there is little or no traceability through the supply chain. During recent years, there has been considerable consolidation of the export trade due to the increase in the market price of yams. A number of exporters have been unable to assemble a complete order of product due to the subsequent increase in their procurement costs and have shifted to other products or ceased exporting altogether.

20 Upwards of 50,000 farmers are thought to produce yams for consumption and sale.

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Figure 11. Production of yams, 1994–2003

Source: Ministry of Agriculture.

Exports of yam are now dominated by a relatively small number of traders. Several of them have made efforts to improve hygiene and pest controls, especially within the pack-house but also through better coordination of their supply chains. For example, some exporters provide field crates and require a record to be kept of the lots supplied by each farmer. They have also improved the washing of the product, for example, installing stainless steel basins, and have attempted to ensure proper drying to prevent growth of mold. Broadly, however, traditional practices throughout the supply chain have not changed, and there is little distinction between the products sold on domestic and export markets. In recent years, exports of yam have shown a sustained increase, rising from approximately US$8 million in 1990 to nearly US$15 million in 2003.21 (figure 12).

21 The 2000 dip in the volume of trade was due to drought-induced reductions in production.

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Figure 12. Exports of yams, 1990–2003

Sources: Jamaican Exporters Association and FAOSTAT.

Exports of yam to the United States have been subject to mandatory fumigation since the 1940s to eradicate the yam weevil. This requirement is applied to most other importers to the United States. However, a survey of yam production in Jamaica by the MoA identified pest-free areas. Subsequently, the Jamaican government requested that a pest risk assessment be undertaken by APHIS with the aim of lifting the requirement for fumigation of exports from these areas. To date, this issue has not been resolved.

However, the most serious problem with exports to the United States relates to limits on fungicide residues. Fungicide is routinely applied to the cut ends of yams to prevent the growth of blue mold, in particular, during sea shipments. Jamaica is almost unique in exporting large yams that are cut into sections; thus, blue mold is not an issue for its competitors. The fungicide most widely used (Imazilil) is not registered for such use by the FDA and, as a consequence, the MRL is at the analytical LOD. In 2000 border inspection by the FDA detected residues of Imazilil; as a result, several large exporters lost consignments. The FDA required subsequent consignments to be certified as residue-free by an approved laboratory.

In response, the Jamaican government established a Yam Task Force. It requested permission from the FDA to use two fungicides, Deccosol and Botran, which Jamaica was using on sweet potato and for which MRLs have been established. In the interim, the task force recommended that calcium hypochlorite be used instead of Imazilil, although the former provided less protection against mold growth. The Yam Task Force also recommended that farmers switch to production of the smaller Miniset yam, which does not need to be cut prior to export. It also recommended that more careful drying procedures be used at pack-houses, because a properly dried yam can create its own natural protection against mold.

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The FDA approved the use of calcium hypochlorite, Botran, and Deccosol to treat the cut ends of yams. Currently, however, Deccosol is not approved for use in Jamaica, and the PCA has had problems getting the manufacturer to furnish the required data. This chemical’s primary use is to fumigate greenhouses rather than as a post-harvest treatment. Subsequently, the MoA approved the use of calcium hypochlorite and Botran for the treatment of yams for export. Both of these approved treatments are acknowledged to be less effective at abating mold growth, and a number of exporters have reported problems, especially with sea shipments. At the same time, the MoA has worked with exporters to improve handling practices, for example, proper and timely disposal of waste materials and appropriate washing procedures. The MoA suspects that Imazilil is still being widely used.22

As with many of the issues highlighted above, the problems that Jamaica has experienced with yams and other vegetables due to residues of agrochemicals reflect weaknesses in prevailing control measures alongside highly fragmented supply chains that do not differentiate between production for local and export markets and have remained largely unchanged despite the enhancement of food safety controls in major markets. Together with the problems experienced with hot peppers, however, the yam problem does illustrate the ability and willingness of the Jamaican government to pursue SPS-related problems that impede agricultural and food exports, especially where these requirements are considered questionable. The MoA sought to influence the measures adopted by a trading partner and to negotiate alternative remedies. Furthermore, although the government took action only when a problem arose in a major export market––that is, reactively rather than proactively––the response was quick and decisive. These experiences suggest that the SPS management system is able to act when it needs to. At the same time, it is not evident that the government and private sector are interpreting such product-specific events, individually and/or collectively, as indicators that broader reforms are required urgently.

PAPAYA

Jamaica was one of the pioneering countries in the development of trade in papayas. The country accounted for a large share of European imports of this tropical fruit when the market there began to take off in the early 1990s. Since then, the Jamaican industry encountered major plant disease problems (in the mid-1990s there was an outbreak of Mosaic, a disease related to ring spot virus) and was overtaken by several competing countries.23 Recently, though, several companies have made investments to upgrade the quality of Jamaican-grown papaya, to address pesticide-residue and other concerns, and to modernize their pack-houses, including through the application of HACCP principles. Three exporters have emerged to dominate this trade. They have integrated production and/or contract satellite producers while maintaining effective control of the supply chain.

22 Jamaica has not experienced any rejections of yams by the European Union, although surveillance has been

undertaken (for example, in the United Kingdom) and a warning has been issued. Regardless, it is expected that Imazilil will soon be delisted for approved use, not only in the European Union but also in the United States, necessitating the shift to an alternative treatment anyway.

23 For example, Mexico and Brazil have emerged as the market leaders. In 1990 Mexico’s papaya exports were similar to those of Jamaica at just under $1 million. By 2003, Mexico’s grew to $44 million. Over that same period, Brazil’s papaya exports increased from $2 to $29 million. Belize, which had no papaya trade in the early 1990s, had exports of approximately $10 million by 2003.

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Figure 13. Exports of papaya, 1991–2003

Note: The 2001 figure is questionable. FAOSTAT places trade in that year at US$3.3 million. Source: Planning Institute of Jamaica and FAOSTAT.

For example, Advanced Farm Technology (AFT), a subsidiary of a US-owned firm, was established in 1982. The firm purchased a bankrupt winter vegetable project and, after some time, converted it to papaya production. The initial five acres for papaya has expanded to 300 acres, of which 150 is being used at any one time. New management was introduced in the last 24 months, after which significant improvements have been made to food safety and agricultural health controls and quality management. AFT is now a dedicated papaya exporter that focuses on the United Kingdom and the United States, mainly aimed at wholesalers that supply African, Asian and Caribbean immigrant markets.

Alongside its own production, AFT contracts two farmers to produce papaya, each of which has his own satellite producers. These two farmers operate their own pack-houses from which produce is delivered to the central pack-house of AFT. However, their pack-houses are inspected on a regular basis and must operate to specified standards to ensure food safety and plant health controls and compliance with quality standards. All crates have a code for each farmer, facilitating traceability back to the place of production. AFT has been sourcing in this way for four years and has established a reliable supply chain that provides the required level of control and accountability. The aim is for fruit to be at the final market 48 hours after harvesting.

Currently, Advanced Farm Technology has almost fully implemented HACCP, which builds on already established GAP procedures. Its pack-house has been upgraded gradually over a six-year period, for example, with the repair of floors; installation of light covers, screens, fans and water chlorination; and reorganization of production to ensure correct product flow. All staff are provided with uniforms and must have food handler permits. Record-keeping has also been extensively upgraded. Although some buyers have asked about HACCP certification, none has required it. However, the firm has seen how requirements are changing and wants to be ahead of the game to maintain market access and enhance competitiveness.

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Exports of papaya are aided by the fact that MRLs have been established for many of the major pesticides used in production. However, residues are still an issue, with respect to both regulatory requirements and the standards laid down by private buyers. For example, AFT has had a number of consignments detained by the FDA in the United States, although all eventually passed and were released. However, it can sometimes take up to three days for samples to be taken, reducing shelf-life and thus the value of the consignment. The company has made efforts to address some of these problems, for example, through application of biopesticides, although these are typically more expensive.

There are also quite regular detentions related to phytosanitary controls. One of the frustrations that exporters face here is that the US authorities do not provide feedback on the code in boxes in which problems are identified, making it difficult to trace back the source and take corrective action. To overcome this problem, Advanced Farm Technology has employed pack-house workers who are dedicated to the inspection of individual fruit for pests. AFT does not use the preclearance program prior to export because of high rates of re-inspection in the United States. To reduce the risk of detentions for whatever reason, AFT has reduced the size of each consignment to a maximum of 500 boxes.

SANITARY, PHYTOSANITARY, AND TECHNICAL STANDARDS FOR PROCESSED FOOD PRODUCTS

Alongside exports of fruits and vegetables and fish, which are subject to only limited levels of processing, Jamaica has established a trade in a wide range of processed and packaged foods, including pepper sauces, soups, seasonings, and juices. Historically, these processed foods served Caribbean immigrant markets in Canada, the United Kingdom, and the United States. However, the exporters of these foods have progressively shifted to a wider consumer base, reflecting increased demand for spicier and “ethnic” foods. Such products are subject to a far wider range of food safety, quality, and labeling requirements that require more sophisticated systems of SPS controls, especially on the part of the manufacturer/exporter. In the case of Jamaica, it is evident that levels of such capacity vary widely, and even well-established and sophisticated manufacturers, for example, Grace Kennedy, face regular problems, as illustrated by the rates of border detention in the United States.

One product that has had very particular problems is ackee. Ackee are a traditional fruit widely consumed by Jamaicans and for which there is a lucrative market among the diaspora. Exports of canned ackee were valued at US$5.6 million in 2001 and increased to US$7.2 million in 2002. The ackee processing and canning sector is estimated to employ approximately 3,700 people, of whom over 65 percent are women (Reid 2000). An additional approximately 50,000 people are estimated to derive their livelihood through ackee production.

In 1973, because of concerns about hypoglycin, a toxin present in unripe ackee, the United States imposed an import alert on canned ackee. The alert resulted in an effective US market ban on the product, although there apparently emerged a vibrant smuggling trade through the Canadian border. Jamaica’s trade in this product continued with Canada and the United Kingdom. In the mid-to-late 1990s a series of discussions took place between Jamaican and US authorities on how the import alert might be lifted. To regain access to US markets, the Jamaican authorities were required to implement a HACCP-based system of prior approval and regulation of ackee processors. The country prepared a Jamaican Standard for Canned Ackee in Brine. Exports to the United States of canned ackee restarted in 2001, although trade in fresh ackee is prohibited.

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Export earnings expanded considerably due to the comparatively higher prices for this product in the US market (Gordon 2002).

More generally, exporters of packaged food products to the United States are required to file details of their production process with the FDA before they are permitted access. Producers of low-acid and acidified canned food also are required to obtain prior approval of their products and production processes. The Scientific Research Council provides a service to companies wishing to export processed food products to the United States. For a fee, the council will gather the required information and complete the required registration and/or prior approval documentation. However, a significant number of product consignments have been rejected by the FDA because they have not complied with these requirements and/or the importer has failed to submit the required documentation.

Exporters of processed foods have also encountered problems related to labeling requirements, especially nutrition labeling, and the use of additives, especially colorants, that are not permitted in the United States. The JBS provides advice on label design and content and undertakes nutrient analysis for nutritional labeling. However, exporters have complained about the amount of extra time required to obtain approval for a label and the costs associated with border rejections because a label is judged to be noncompliant.

FOOD SAFETY CONTROLS FOR THE TOURISM SECTOR

Although not related to agricultural and food exports per se, a major SPS issue affecting trade in services and earnings of foreign exchange is the impact of food safety on tourism. In 2003 Jamaica had approximately 1.3 million foreign tourists and a similar number of stopover cruise ship passengers, with these numbers increasing over time (figure 14). Figure 14. Number of foreign tourist arrivals, 1997–2003

Source: Planning Institute of Jamaica.

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Since 1993, when a major outbreak of food-borne disease occurred in the tourist population, a program of hotel surveillance has been in place covering the popular destination sites of Montego Bay, Negril, and Ocho Rios. In 1999 the Kingston and St Andrews region were added to this program. While this system provides valuable monitoring data, it has been recognized that there are weaknesses in recording at the parish level, and some caution should be used in interpretation. In 1996 one study indicated that approximately 25 percent of tourists suffered from diarrhea during their stay in Jamaica (Ashley 2002). By December 1998, however, there had been a significant reduction in the recorded incidences of traveler diarrhea, and low rates are being sustained (table 13). At the same time, rates vary significantly among hotels, with some having persistently high levels of traveler diarrhea. Major outbreaks, however, are a relatively rare occurrence. Table 13. Rates of traveler diarrhea per 10,000 guest nights, 2000–02

Region 2000 2001 2002 Ocho Rios 12.74 7.75 4.84 Montego Bay 4.72 5.12 3.78 Negril 6.3 5.6 5.7 Kingston & St Andrews - <1.0 <1.0

Source: Ministry of Health.

The MoH has instituted a range of control measures to reduce and control food safety in hotels. In 2000 public health regulations were promulgated for tourist establishments and swimming pools that laid down certain operating procedures and standards. An annual audit and health-based assessment linked to a licensing program is undertaken at each hotel. The implementation of the audit findings is supported by training and certification of premises and employees. Hotel nurses are trained through their association to identify food-borne illness and to learn the procedures for the notification of medical authorities. Detailed manuals have been prepared based on HACCP principles. Furthermore, surveillance has been undertaken of some inputs, for example, eggs. Some hotels also have developed systems of supply controls including contract production of fruits and vegetables.24

6. CONCLUSIONS

This case study has assessed the current level of food safety and phytosanitary control capacities in Jamaica and the implications of SPS-related problems for the country’s nontraditional food exports. Traditionally, Jamaica’s agricultural exports were dominated by bulk commodity products, notably bananas and sugar, for which SPS standards were not a major issue. However,

24 The MoH is implementing a system of identification badges for all employees in tourist establishments. However,

an estimated 800,000 people are employed in the food service sector in Jamaica, underlining the enormity of this task. Furthermore, the MoH has been hampered by inconsistency in issuing standards among parishes and poor record-keeping in some cases. Under a pilot scheme, computer-generated badges have been issued to workers. The total cost of implementing this system nationwide is estimated at US$88,000, although the system could generate net revenue in the medium term from the fees charged to workers and/or their employers.

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as exports of nontraditional products have grown alongside the evolution of stricter international food safety and plant health controls, SPS issues have come to play a prominent role in determining market access and Jamaica’s competitiveness in its major export markets. A number of specific problems have emerged that have compromised a potentially lucrative trade in niche products. In this sense, Jamaica is probably indicative of many smaller developing countries.

Currently, it is evident that the core SPS management framework is in place, and in particular, there is well-developed human capital, although it has not developed and evolved in line with the food safety and plant health control needs of its exports. A number of assessments have highlighted the need for administrative reform to avoid wasting limited resources and better coordination of SPS controls to ensure that emerging issues are addressed in an effective and timely manner. While the need for reform of SPS controls is widely recognized and two broad programs of capacity development have been implemented in Jamaica, progress has been slow due to political inertia. There is clearly a need for renewed urgency in this respect. Recent efforts to enhance coordination across agencies provide some positive signs, and these efforts need to be extended, building on progress step by step.

Jamaica has addressed SPS challenges primarily in a reactive mode, developing plans of action and modified regulations after market access has been cut off or restricted due to SPS problems or trade partner concerns. In some cases, technical and administrative solutions have been found, albeit with some delay. In other cases, either technical solutions remain elusive or the administrative or financial implications of identified solutions have resulted in their limited adoption. These patterns have contributed to a very uneven development of Jamaica’s NTE trade, with still-frequent product interceptions, by either Jamaican or trade partner authorities, and much uncertainty within the private sector. What is recommended is that Jamaica take a proactive attitude and steps toward meeting international standards for the products that the country can profitably export.

Much of the existing SPS management capacity in Jamaica remains embedded in the public sector, with the exception of certain subsectors (for example, fish and fishery products) or among some larger-scale operators (for example, a few food processors and those involved in papaya exports). While some progressive exporters of nontraditional fruits and vegetables are beginning to make some changes, overall private investment in improved food safety and plant health systems has been very limited. This slowness to change in part reflects overall uncertainties about export growth potential and a perception that overseas standards are either unfair or too complex. It also reflects the highly fragmented nature of the pertinent export trades and supply chains, aging agrarian population, lack of pressures for change from overseas buyers, and still-predominant domestic market outlets for the featured commodities (for which few standards are enforced). These conditions result in inabilities to realize economies of scale and to induce changes in farmer agronomic and record-keeping practices. Clearly, efforts need to be made to enhance the coordination and integration of supply chains for products for which there is real long-term potential for export competitiveness, building on the experiences of, for example, the papaya sector.

Many of Jamaica’s nontraditional agrofood exports face a broad range of competitiveness constraints, related to inconsistent raw material production, high post-harvest losses,

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relatively high-cost and limited-availability labor, macroeconomic factors, and intensified regional and other competition. Market access problems related to SPS materials have exacerbated and reinforced these constraints, reducing the profitability and raising the risks associated with the conduct of these trades. The resolution of such SPS constraints is necessary, although not sufficient, for restoring and improving the competitiveness of Jamaica’s nontraditional agrofood exports. In addition, efforts must be made to enhance overall export competitiveness, for example, through enhanced productivity and/or product quality.

Capacity weaknesses remain significant in the private sector, and there are questions as to whether exports can be maintained, let alone increased, on the basis of the current fragmented system of production among an aging farming population. Selected interventions to develop more coordinated supply chains and traceability systems for particular commodities could be pursued, perhaps through a joint public/donor-private initiative. Nevertheless, it is likely that future export development will require private investment in (medium-scale) export-dedicated production for which rising quality, food safety, and plant health standards are factored into production, post-harvest, and overall management systems. It is not certain that this activity is sufficiently profitable to induce such investment, whether by Jamaicans or others with prior experience and market linkages. Furthermore, Jamaica has a number of notable disadvantages compared with competing supply sites in Africa, Central America, and elsewhere, including the availability and cost of freight, low and fluctuating yields, and fragmented supply chains. These disadvantages raise questions about the likely economic benefits of enhanced trade-related SPS controls unless broader efforts to enhance export competitiveness are undertaken. Thus, it seems clear that the development of SPS capacity needs to be undertaken within the context of broader developments in the supply chain for high-value agricultural and food exports.

Future export development can also involve efforts to expand sales in sauces, seasonings, and other value-added processed food products, both increasing market shares among immigrant communities and extending sales to penetrate the more mainstream market, for which demand for many such products continues to grow rapidly. These efforts may require some modification of product composition and recipes to meet consumer preferences and increased attention to compliance with regulations related to labeling, additives, and packaging. Rather than a fragmented, company-specific approach to these challenges, there is scope for a more coordinated approach involving joint investment in product R&D, food hygiene training, and market development.

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REFERENCES Ashley, D. 2002a. “Epidemiological Surveillance of Travelers’ Health in Jamaica.” Ministry of Health, Kingston.

Canale, F. 2002. “Strengthening the Phytosanitary Capabilities of CARICOM Countries.” FAO, Rome.

Dormer, D. 2003. “Competitiveness in Jamaican (Fresh) Hot Pepper Industry.” ASSP, Ministry of Agriculture, Kingston.

Gordon, A. 2002. National Contribution: Jamaica. Workshop on Technical Barriers to Trade. Rio de Janeiro. October 22–24.

Henson, S., and W. Mitullah. 2004. Kenyan Exports of Nile Perch: Impact of Food Safety Standards on an Export-Oriented Supply Chain. Policy Research Working Paper # 3349. World Bank.

IICA (Inter-American Institute for Cooperation in Agriculture). 2000. “Country Reports Arising from Needs Assessment of Food Safety Status and Infrastructure in CARICOM Member States.” Trinidad and Tobago.

Jaffee, S. 2003. From Challenge to Opportunity: Transforming Kenya’s Fresh Vegetable Trade in the Context of Emerging Food Safety and Other Standards in Europe. Agriculture and Rural Development Discussion Paper 2. ARD, World Bank.

McDonald, F.D. 2001. Marketing Issues Affecting the Hot Pepper Industry in Jamaica and the Caribbean. CARDI, Kingston.

Ministry of Health. 2002. Program for the Prevention and Control of Food-Borne Diseases: Audit of the Hotel-Based Surveillance System and of the Health Status Assessment of Hotels in Health Regions across Jamaica. Annual Report 2001. Kingston.

National Quality Infrastructure Project. 2001. “National Quality Infrastructure in Jamaica: Situational Analysis.” Ministry of Health, Kingston.

Norton, G.W., G.E. Sanchez, D. Clarke-Harris, and H.K. Traore. 2003. “Food Safety in Food Security and Food Trade: Reducing Pesticide Residues on Horticultural Crops.” In L. Unnevehr, ed., Food Safety in Food Security and Trade. Washington, DC: IFPRI.

PCA (Pesticides Control Authority). 2003. Annual Report of the Pesticide Control Authority 2002–2003. Kingston.

Reid, J. 2000. Needs Analysis of the Readiness of Jamaican Institutions for WTO-SPS. Kingston: IICA.

Russell, S. 2000a. “Hot Peppers.” In R. Hertford, ed., Measuring the Competitiveness of Jamaica’s Agricultural Commodities. Costa Rica: IICA.

_____. 2000b. “Yams.” In R. Hertford, ed., Measuring the Competitiveness of Jamaica’s Agricultural Commodities. Costa Rica: IICA.

Stewart, V., and D. Fletcher. 2000. “Hot Pepper Industry Study.” CARDI, Kingston.

TSL (Technological Solutions Ltd.). 2002. “Final Report on the GAP Audit of the Agricultural Marketing Corporation.” Kingston.

_____. 2003. “Estimated Costs for the Implementation of the Improvements Required for HACCP Implementation at the AMC Complex.” Kingston.

World Bank. 2002. “Country Assistance Strategy Progress Report of the World Bank Group for Jamaica.”

_____. 2003. Jamaica: The Road to Sustained Growth.

Documents

Public Disclosure Authorized Jamaica’s Trade in Ethnic Foods and Other Niche Products · 2016. 7. 14. · representative importers, brokers, retailers, and distributors in the European