
Fruit industry must raise its voice
The South African fruit industry needs a stronger voice to influence relevant, practical, and standardised sustainability requirements. By Engela Duvenage.
More than 300 different sustainability standards, industry initiatives, frameworks, and guidelines set out by governments and retailers around the world apply to the agricultural sector, according to a recent KPMG report. These include Farming for the Future, LEAF, SIZA, Sedex, and GLOBALG.A.P.
While complying with sustainability requirements provides entry to important markets, the administration involved increasingly leaves many in the agricultural sector frustrated, confused, and out of pocket.
“The requirements often overlap because they are not standardised. A lot of time and money is spent to prepare for each,” said Albert Coetzee, Industry Affairs Manager at the Citrus Growers’ Association of Southern Africa.
He noticed a 25% duplication in requirements when he recently compared standards.
According to calculations by Source Consulting for Fruit SA, the cost of compliance can amount to R8 000 per hectare. This includes membership fees, audit costs, personnel hours, capital expenditure, and consultant costs.
This can amount to around R200 000 annually for a small farm (less than 40 hectares), R570 000 for a medium-sized farm (40–100 hectares), and R1.87 million for a large farm (more than 100 hectares).
“R200 000 is a lot for a small business just to access the UK and the EU,” noted Coetzee.
Straying from true sustainability
“The fruit industry is fully committed to true sustainability,” asserted Coetzee, “where the measures implemented will lead to material differences in our ability to be sustainable producers.”
However, he worries that compliance is increasingly abandoning its original purpose of ensuring human rights and a sustainable environment that will support future generations’ prosperity.
Retailers are increasingly setting their own sustainability standards to gain a competitive edge. These standards are often above and beyond the legal requirements of the importing country.
According to an Accenture study on corporate sustainability, 99% of chief executives of the world’s leading organisations see sustainability as critical to their future success. Coetzee believes the South African fruit industry should proactively influence the conversation about certification costs and requirements.
“We have the negotiating power. We are the world’s second-biggest citrus exporter, 4th with table grapes, 6th with pears and 8th with apples,” he said. “Europe is quite reliant on citrus from Southern Hemisphere countries. Citrus imports to the EU from South Africa total 35%. This puts us in a position for dialogue and discussion.”
The EU context
Since World War II, Europe has depended on agricultural subsidies to boost food production. Today, 32% of an average farmer’s income comes from subsidies.
Although the Common Agricultural Policy, which subsidises farmers, receives 24% of the overall EU budget, agriculture in the EU only contributes 1.4% to its GDP, while using nearly a third of its land and water, and producing 10% of its emissions.
Contributions by the European Parliament towards the Common Agricultural Policy have dropped significantly since the 1980s, especially since the 2020s because of geopolitical movements post-Covid.
Strategies such as Farm to Fork call for the European agricultural sector to reduce the use of chemicals and other hazardous pesticides by 50% and fertilisers by 20% by 2030. In addition, 25% of agricultural land must be organically farmed by 2030.
Enterprises must also embrace energy-efficient solutions and rehabilitate farmland. Farm to Fork will recommend to each member state how to better include the nine objectives of the Common Agricultural Policy into their strategic plans.
“There is a tension towards the Farm to Fork strategy. People are worried about a future of unjust requirements,” said Coetzee. He considers it important to calculate the impact of these regulations and whether they will indeed enhance sustainability.
Agricultural economist Johan Bremmer of Wageningen University in the Netherlands calculated a potential EUR12 billion drop in production if Farm to Fork regulations about biodiversity restoration and reduced pesticide and fertiliser use are fully implemented.
“This will affect price and the agricultural sector in Europe as a whole,” said Coetzee.
Farmers in Poland, the Netherlands, and France have protested about the Green Deal and Farm to Fork Strategy. “European farmers are frustrated by all the new rules,” said Coetzee. “They are not making it financially.”
From reactive to proactive
Companies should become familiar with the contents of the EU’s Corporate Sustainability Reporting Directive and the proposed Corporate Sustainability Due Diligence Directive. As these are still only EU directives, there is a chance that member states could each implement different versions.
“We need to push for conformity and ensure that there is only one standard to comply with. We must influence these requirements,” warned Coetzee.
He said the industry should continually engage with Carbon Calculator platforms to prepare for the possible introduction of the Carbon Border Adjustment Mechanism — read more in our article about André de Ruyter’s presentation — and strive to provide accurate information.
Trade bodies such as the Southern Hemisphere Association of Fresh Fruit Exporters and Fruit SA should, along with other organisations, growers and government, challenge the status quo and influence consumers more strongly.
“We cannot do this without government,” noted Coetzee. “We should, therefore, work on strengthening this relationship.”
He pointed out that the South African agricultural sector should consider the effect of recent farmer-led protests across Europe. European farmers have influenced the European Union to bring together different voices in the agricultural sector, including farmers and representatives of the logistics chain, to rethink the impact of the new sustainability regulations.
“If we are reactive, we are only going to extinguish fires,” said Coetzee. “If we are prepared and challenging, we will be at the forefront and influence the dialogue that influences requirements.”
Watch Coetzee’s presentation on the Hortgro YouTube channel.