In this section, we look closer into how production and exports have evolved in both countries over the last decade, and into the diversity of food safety and quality standards. This focus is important. While Thailand and India are renowned as strong producers of agricultural commodities in Asia and worldwide, both countries are still plagued with severe food safety and quality problems. Issues of food safety and quality remain a real threat, particularly for exporters who try to respond to heightened global demand while simultaneously adapting to strict global quality standards. With the objective of easing the adaptation process, local governments have assisted producer–exporters by creating domestic standards. However, as the following discussion will show, this has not always been a success.
Level 1 GAP standards are private, third-party standards applied by lead firms in the food chain to meet consumers’ concerns over food safety, to differentiate products based on quality attributes, to mitigate commercial risks and to ensure compliance with public regulations. Although voluntary, they are becoming increasingly mandatory to supply high-value markets worldwide. The most well-known Level 1 standard is the GlobalGAP standard, but there are also several chain-specific GAP standards with similar requirements (e.g. Tesco Nature’s Choice). Moreover, both Thailand and India have developed national Level 1 standards (ThaiGAP and IndGAP) with the aim of being recognized as GlobalGAP equivalents. These are more adapted to local circumstances than the GlobalGAP standards, and therefore expected to be easier and less costly to comply with.
Level 2 standards are basic voluntary GAP standards that are introduced either by governments or by private actors or by both collectively as a public–private partnership. They are easier to comply with for smallholders than international standards (Level 1) and aim to fulfil two objectives: to ensure food safety in the domestic market and to gradually upgrade food safety systems to facilitate exports and to allow adoption of Level 1 standards (Amekawa,
2013; eFresh Portal,
2016; Korpraditskul, Suwannamook, Adulyarattanapan & Damsiri,
2010). Basic GAP standards under Level 2 are diverse: some are not as stringent, whereas others are more challenging to comply with. In our case studies, both the public and private sectors in Thailand and India have introduced their own local Level 2 GAP standards for the high-value domestic markets and the export supply chain, resulting in two coexisting standards and confusion among producers and exporters.
2.1 Production, Exports and Food Safety
Thailand and India are among the largest producers and exporters of horticultural products in the world and among the developing countries most affected by increasing standards (Jaffee et al.,
2005; Jairath & Purohit,
2013; Manarungsan et al.,
2005). In 2014, India was the second largest producer of fruits (excluding melons) as well as of vegetables (including melons) (FAO,
2010). Thailand was the 14th largest producer of fruits (excluding melons) and the 41st largest producer of vegetables (including melons) (FAO,
2010). Despite high production volumes, Indian fruit and vegetable exports are relatively low. India is the 13th biggest exporter of vegetables (HS 07) and the 21st biggest exporter of fruits (HS 08) (ITC,
2017). One reason for low exports is that production is mainly targeted for domestic consumption. Another reason is producers’ failure to adhere to international food safety and quality standards. Thailand, being the 11th biggest exporter of vegetables (HS 07) and the 20th biggest exporter of fruits (HS 08) (ITC,
2017), performs comparably better.
Both Thailand and India suffer from food safety issues which have negatively impacted exports to high-value markets, such as the European Union (EU). Unsafe farming practices are prevalent, resulting in high risks for the consumer and negative health impacts for farmers. Microbial contamination of fruits and vegetables is a problem as a result of poor hygiene practices, the use of untreated manure and polluted irrigation water (Shepard,
2006; UNIDO, NORAD & IDS,
2015). Furthermore, pesticide overuse is common, especially among small-scale farmers, for whom pesticides provide an effective way to manage risks and are frequently applied as a preventive measure. Often, farmers follow a monthly or weekly spraying calendar and apply doses that are higher than what is recommended on the label (Plianbangchang, Jetiyanon & Wittaya-Areekul,
2009; Shepard,
2006). This practice is encouraged by the fact that the physical appearance is the major factor for the determination of the market price in traditional supply chains (Shepard,
2006). For the case of Thailand, a recent study by Wanwimolruk, Phopin, Boonpangrak and Prachayasittikul (
2016) showed that EU maximum residue limits (MRLs) were exceeded in 35–71% of the cases, depending on the type of vegetable and the marketing outlet (local market or supermarket).
Thailand’s fruit and vegetable exports to the EU fell steadily from 37,414 tons in 2007 to 23,187 tons in 2014 (ITC,
2017) (Table
2),
2 which can partly be attributed to difficulties in meeting the increasingly strict standards in the EU. Within the group of middle-income countries, Thailand has the highest unit and percent rejection rates for exports of agrifood products into the EU and Japan (UNIDO et al.,
2015). Thai imports account for 21% of all EU rejections due to pesticide residues (2002–2010), 21% of Japanese rejections due to bacterial contamination (2006–2010) and 22% of Australian rejections on the basis of non-compliance with hygienic conditions/controls (UNIDO et al.,
2015).
Table 2
Production and export of fruits and vegetables in Thailand and India
2007 | 2,74,7023 | 239,281 | 23,591 | 12,622,969 | 752,995 | 13,823 |
2008 | 2,759,375 | 250,795 | 22,437 | 10,993,626 | 765,847 | 12,282 |
2009 | 3,430,686 | 251,327 | 19,036 | 10,798,782 | 1,036,019 | 13,505 |
2010 | 3,623,646 | 220,733 | 16,333 | 10,436,562 | 913,390 | 11,800 |
2011 | 3,833,422 | 260,643 | 15,252 | 10,942,378 | 1,222,597 | 11,517 |
2012 | 3,817,113 | 238,359 | 13,001 | 11,081,410 | 1,428,942 | 15,056 |
2013 | 3,903,385 | 208,473 | 11,509 | 10,693,755 | 1,431,090 | 10,686 |
2014 | 4,112,977 | 201,548 | 12,593 | 11,341,667 | 1,457,446 | 10,594 |
2007 | 88,532,008 | 1,524,120 | 106,756 | 63,888,880 | 634,147 | 119,005 |
2008 | 92,214,635 | 2,262,600 | 102,825 | 69,797,425 | 827,372 | 153,539 |
2009 | 91,441,005 | 2,483,145 | 91,034 | 70,242,281 | 813,685 | 130,506 |
2010 | 100,652,944 | 1,716,045 | 72,823 | 76,411,205 | 386,012 | 121,800 |
2011 | 107,050,691 | 2,177,850 | 152,743 | 75,241,396 | 791,170 | 114,827 |
2012 | 114,332,800 | 2,347,190 | 108,255 | 76,877,434 | 837,762 | 121,132 |
2013 | 120,992,200 | 2,621,246 | 120,320 | 84,004,249 | 940,576 | 182,329 |
2014 | 126,578,659 | 2,533,913 | 132,597 | 89,920,608 | 805,033 | 144,994 |
Similarly, India has also experienced high rejection rates for most of the agricultural commodities it exports. Based on aggregated 2002–2010 data from UNIDO et al. (
2015), India ranked fourth among countries with the largest number of agrifood rejections from the EU, with a total of 1145 rejections or equivalent to 127 EU rejections per year. Indian fruits and vegetables rank second to Mexico in terms of largest rejection rates for the US market, with a total of 8770 rejections or equivalent to 974 rejections per year (ibid). India joins Turkey, China and Vietnam in having the highest rate of rejections per US$1 million of imports. UNIDO et al. (
2015), and Roy and Thorat (
2008) report that the most common grounds for rejection of Indian exports to EU are mycotoxins, food/feed additives and bacterial contamination. For produce directed to the American market, the most common reasons for rejection are wrong or inappropriate labelling, unhygienic conditions and bacterial contamination. Such high rates of rejection point to inadequate compliance, or lack thereof, to international standards (ibid). Indian fruit and vegetable exports to the EU, in contrast to Thailand, did not experience a decrease over the period from 2007 to 2014 but increased by 23%. However, the increase in exports is much lower than the increase in exports to world and production increases. Production increased by 42% and exports to the world by 55% over the same period (ITC,
2017).
2.2 Level 1 Standards: Private GAP Standards for the High-Value Export Market
There is considerable evidence that adopting Level 1 private food safety and quality standards such as GlobalGAP is especially challenging for small-scale farmers (Ashraf, Giné & Karlan,
2009; Graffham et al.,
2007; Roy & Thorat,
2008). Compliance with standards entails high upfront investments in farm facilities and equipment, which smallholders are often not able to incur, especially if they lack access to credit (Jaffee et al.,
2005). In addition, the costs of compliance with standards are, to a large extent, fixed costs, which disadvantage small-scale producers (Chemnitz,
2007; Jaffee et al.,
2005). Besides, the technical and information requirements of standards are high. Farmers have to adopt more sophisticated farming practices, and they require producers to be informed about changing requirements of standards. However, acquiring information is also subject to economies of scale (Narrod et al.,
2009; Roy & Thorat,
2008). Poor education levels and a lack of access to extension services and training programmes further hinder the implementation of food safety and quality standards by small-scale farmers (Markelova, Meinzen-Dick, Hellin & Dohrn,
2009).
In the light of the above-mentioned challenges, several donors, governments and NGOs in Thailand and India—as in other developing and emerging countries—have initiated development programmes to facilitate the adoption of private standards by small-scale farmers (McCullough, Pingali & Stamoulis,
2008). Most initiatives focused on the GlobalGAP standard, which became increasingly mandatory to supply the European market in the mid-2000s and therewith threatened to exclude small-scale farmers from high-value markets (Humphrey,
2008; Will,
2010). These programmes supported the creation of farmer groups and offered financial assistance, training and information to the groups to achieve certification (Humphrey,
2008; Kersting & Wollni,
2012; Roy & Thorat,
2008). Moreover, public–private partnerships were formed between donors and exporters to enable small-scale farmers to adopt the standard as part of exporter–outgrower schemes (Holzapfel & Wollni,
2014a; Humphrey,
2008; Narrod et al.,
2009; Roy & Thorat,
2008).
Notwithstanding these developments, the number of GlobalGAP-certified producers remains low. In 2016, 188 F&V producers in Thailand and 8006 F&V producers in India were GlobalGAP-certified according to the GlobalGAP database. These are low numbers given that there are almost six million farms in Thailand and more than 263 million farms in India. In Thailand, the number of certified producers has even declined. While in 2009, 809 producers in Thailand were certified with GlobalGAP, this number declined continuously until 2015 where only 55 producers were certified (Table
3). In 2016, the number of certified producers again slightly increased to 164 producers (GlobalGAP, 2016). According to Thai experts, the decline in the number of GlobalGAP-certified producers can be explained by a high number of Rapid Alert System for Food and Feed (RASFF) notifications. To avoid a ban by the EU on Thai exports of F&V, the Thai government started in September 2010 to inspect 50% of produce intended for the European market. Earlier, only 10% of produce was randomly sampled. In addition, the government introduced an establishment list for exporters to the EU to increase the level of control. These measures have led to Thai F&V exporters supplying the EU market to limit their production and activities.
Table 3
Number of GlobalGAP-certified producers in Thailand and India, 2008–2016
Thailand | Individual | 15 | 29 | 28 | 33 | 28 | 27 | 41 | 43 | 39 |
Group | 354 (4) | 780 (11) | 687 (11) | 219 (9) | 246 (8) | 107 (5) | 65 (5) | 12 (2) | 125 (4) |
Total | 369 | 809 | 715 | 252 | 274 | 134 | 106 | 55 | 164 |
India | Individual | 405 | 311 | 158 | 133 | 127 | 140 | 122 | 93 | 101 |
Group | 2125 (42) | 1528 (34) | 2103 (34) | 2961 (43) | 3191 (38) | 4007 (51) | 6666 (55) | 7701 (69) | 8006 (87) |
Total | 2530 | 1839 | 2261 | 3094 | 3318 | 4147 | 6788 | 7794 | 8107 |
A shift from group certification towards individual certification can be observed in the case of Thailand. Compared to individual certification, group certification can make compliance with GlobalGAP feasible for small-scale farmers by reducing the costs of compliance for the individual producers and by making it easier for external service providers to provide farmers with advice and training (Will,
2010). Two main group types exist under GlobalGAP option 2. The first is farmers’ association or cooperative where the group is managed by farmers, and the second is an outgrower scheme of a company, where the company organizes smallholders and manages the group (GTZ, 2010). In Thailand, in 2009, only 29 producers were certified under option 1 while 780 farmers were certified in eleven farmer groups. In 2015, only two small producer groups with a total of 12 farmers were certified while the number of producers certified under option 1 increased to 43. This indicates that GlobalGAP adoption by smallholders is extremely challenging and often not sustainable as has also been shown by Holzapfel and Wollni (
2014b). The case of India, however, shows that group certification can work. The number of farmers and groups certified in India has steadily increased from 2125 farmers (42 groups) in 2008 to 8006 farmers (87 groups) in 2016.
In addition to programmes supporting smallholders in adopting the GlobalGAP standard, both Thailand and India started developing their own national private standards, ThaiGAP, IndGAP and IndiaGAP, with the aim of achieving GlobalGAP benchmarking status, i.e. recognition as GlobalGAP equivalent. The standards are adapted to local circumstances and are thus expected to be easier and less costly to comply with than the GlobalGAP standard (Indian Agricultural and Processed Food Products Development Authority,
2011; Keeratipipatpong,
2010).
The ThaiGAP standard is a product of cooperation between the Thai Chamber of Commerce, Kasetsart University, the National Food Institute, the National Metrology Institute of Germany and the German Technical Cooperation Agency (Keeratipipatpong,
2010). The standard achieved benchmarking status in 2010, but benchmarking was not renewed for GlobalGAP version 5 due to a low demand for the standard, which is reflected in the decreasing number of GlobalGAP-certified producers. It is not clear to what extent the ThaiGAP standard was successful in lowering costs of compliance and in making compliance less challenging.
The Indian case is rather complicated as there are two national standards with two different owners, namely: IndiaGAP owned by the Bureau of Indian Standards (BIS) and IndGAP owned by Quality Council of India (QCI). Both IndiaGAP and IndGAP still seek benchmarking against GlobalGAP (Punjabi & Mukherjee,
2015; see
www.qcin.org). The IndiaGAP, owned by BIS, was drafted by the Agriculture and Processed Food Export Development Authority (APEDA) in 2007 but was first officially released in 2010. Though a public standard, APEDA designed the IndiaGAP closely around the GlobalGAP but fitted to Indian conditions. IndiaGAP aims to help in the adoption of good agricultural practices all over the country and is oriented for Indian producers (both big and small farmers) that are in the high-value export market for agricultural products. Similar to the GlobalGAP, under the IndiaGAP certification scheme, farmers have two options for certification: individual and group certifications. It is expected that if IndiaGAP is properly implemented through certification of model farms, exports will increase by 25–30% (Food Industry India,
2007; see also
www.bis.org.in).
The IndGAP was drafted and released by QCI in 2014. According to a 2016 interview with a QCI representative, APEDA, after creating the draft IndiaGAP, turned over the draft documents to QCI to use as the basis for developing IndGAP. So, while APEDA was occupied promoting IndiaGAP, QCI developed IndGAP (national standard for high-value exports) and basic IndGAP (local standard for domestic market). Meanwhile, IndGAP originates from an institution created through private–public partnership (PPP), with up to 50% funding from the government and the rest coming from industry bodies. QCI was set up as an accreditation body in India, and although its chairman is appointed by the Prime Minister, operationally, QCI is liberated from government control. QCI has a third-party verification system for the IndGAP in place.
IndiaGAP from APEDA and BIS is government-owned and government-led. Since its inception in 1980, BIS has been mandated by Parliament to prepare various Indian national standards and therefore had the legal authority to own and publish IndiaGAP. However, its implementation posed some problems. The structure of Indian government ministries is such that the Ministry of Agriculture is responsible for anything related to domestic agriculture whereas the Ministry of Commerce has the mandate for activities related to exports. Thus, since the original IndiaGAP refers to agricultural products that are destined to go outside of India, APEDA and BIS had to deal with two different Indian ministries whose jurisdictions overlap in the implementation of this certification scheme. A second issue is that unlike IndGAP, IndiaGAP does not allow for third-party verification. There is no third-party certification system that was built around IndiaGAP when the standard was drafted, creating problems of legitimacy and robustness of the standard. Thus, although efforts to have IndiaGAP benchmarked against GlobalGAP have been made, its lack of third-party verification needs to be resolved.