The widening circle

How a shrinking world is driving evolution in the regulatory environment. By Anna Mouton.

The South African fruit industry has been regulated for as long as there’s been a South Africa: our parliament passed a bill regulating fruit exports in the same year (1910) as the Union of the South African Colonies was established.

This act was the first in the world to ensure the consistent quality of exported fruit. At the time, the United Kingdom was our biggest market, but South African fruit was also being sent all over Europe. The Fruit Export Act of 1914 made the inspection of fruit for export compulsory.

As our industry grew, so did regulations around fruit quality. The Perishable Products Export Control Board was established in 1925, the Deciduous Fruit Board was founded in 1939, and all pome- and stone-fruit were exported under the Cape brand from 1966.

The primary rationale for these early regulations was to ensure that only top-quality produce was exported, thereby protecting the reputation of South African fruit.

Today, no one doubts the value of maintaining minimum product standards. It’s obvious that consumers will only keep consuming if they have a positive eating experience. Additionally, retailers set their own standards, raising the bar on, for example, the intensity and extent of red colour in bicoloured apples.

Consistently hitting high Class 1 pack-outs is hard yet absolutely necessary for our growers to remain in business. Necessary — but not sufficient.

“If you only comply with basic quality requirements, your marketing opportunities are extremely limited,” says Mariette Kotzé, General Manager of Industry Support Services at Hortgro. “You can’t supply South African or overseas supermarkets.”

Mitigating direct risks

From the initial focus on quality, the next regulatory step was mitigating two risks directly associated with the fruit: chemical residues and phytosanitary pests. As invasive pests and diseases have spread globally, so has awareness of biosecurity threats associated with international trade.

“Almost all our markets are now special markets,” says Kotzé. “That means that the system to qualify for that market imposes additional requirements. The grower has to register for PhytClean, undergo orchard inspections, apply practices such as traps and mating disruption, and keep records.”

The systems-based approach to mitigating phytosanitary risks puts an administrative and cost burden on the grower, but the alternative is postharvest treatment. Traditional fumigants, such as methyl bromide, are no longer acceptable to many markets, leaving us with the option of cold sterilisation.

As Kotzé points out, not all fruit can withstand cold sterilisation, and we also lack sufficient cold storage to apply cold sterilisation to all the fruit currently exported under the systems-based approach.

“Our risk-based approach is effective, but not perfect,” she says. “We need to be extremely vigilant.”

Unfortunately, importing countries want no pests while retailers want no pesticides. While governments determine safe maximum residue levels on fruit, retailers set their own standards, often in an attempt to differentiate themselves from competitors. These private standards may blacklist particular active ingredients, insist on residue levels below the legal requirements, and limit the number of residues on fruit.

In the short term, private standards hinder pest and disease control, resistance management, and postharvest quality maintenance. In the long term, they influence governments, leading to increasingly stringent regulations.

Beyond the product

Moving beyond the fruit itself, we get to regulations aimed at mitigating risks associated with fruit production. South African pome- and stone-fruit orchards cover more than 50 000 hectares, and the industry directly creates the equivalent of nearly 65 000 permanent jobs (Hortgro 2024 Key Deciduous Fruit Statistics).

Given the size of the fruit industry and its intimate connection to the land, there are numerous social and environmental regulations that apply to growers. “There are at least 12 laws contained in our environmental standard,” says Retha Louw, CEO of the Sustainability Initiative of South Africa (SIZA). Their social standard references another eight acts, as well as the South African Constitution.

SIZA was born out of international scrutiny of South African labour practices on farms and in pack houses. Initially managed by Fruit SA, SIZA is now an independent organisation, with its third-party audits accepted by more than 400 overseas buyers.

“SIZA third-party audits are based on national legislation,” says Werner van Dyk, COO of SIZA. “But because of our reputation, and statistics on the improvements made by suppliers in South Africa over the last decade, many importers and retailers accept the SIZA programme, as it demonstrates that growers are implementing that legislation.”

Wages, benefits, and terms of employment form one of eight principles of the SIZA social standard. According to a recent SIZA monitoring and evaluation report, wages in South Africa’s agricultural sector have increased substantially over the past 16 years, with many businesses paying more than the minimum wage.

These increases have contributed to greater economic stability and social development in South Africa. In this way, the whole country benefits from good social and environmental practices on farms.

Louw believes that market demands for independent standards contribute to regulatory compliance, which in turn promotes long-term sustainability and market access. “The problem is that it costs money,” she says.

The global community

The rise of standards such as SIZA, LEAF, and GlobalG.A.P. attests to increasing consumer awareness of the potential social and environmental problems associated with their purchases. In response to constant media coverage of labour exploitation, deforestation, pollution, and other harms, retailers have turned to independent certification to protect and differentiate their brands.

Meanwhile, in 2015, United Nations members adopted the Sustainable Development Goals, which the organisation describes as a shared blueprint for present and future peace and prosperity for people and the planet.

The 17 goals address aspects such as poverty, food security, human health, education, employment, inequalities, water and sanitation, energy, economic activity, sustainability, biodiversity, and climate change.

The plan is for member countries to deliver on these goals by 2030. Some of this is up to governments, but policies and legislation aren’t nearly enough — buy-in from businesses is indispensable.

While the concept of environmental, social, and governance (ESG) emerged from a 2004 corporate social responsibility initiative of the United Nations, it has become a framework for aligning investors and organisations with the Sustainable Development Goals.

“ESG has emerged as the leading standard for non-financial reporting among large international companies,” says Nitasha Baijnath-Pillay, manager of the Resource Management and Sustainability Programme at Hortgro. “It’s not just about ethics. ESG also demonstrates a company’s resilience and its ability to ensure long-term financial growth.”

Additionally, for consumers, ESG implementation shows a company’s commitment to social and environmental values, while for governments, ESG reporting indicates whether businesses are helping to achieve the Sustainable Development Goals.

Climate regulation ramps up

If you mention 1997, many South African fruit growers immediately think of deregulation. In the context of climate change, we were already in the early stages of what could more accurately be called upregulation.

The United Nations Framework Convention on Climate Change was signed by 154 countries in 1992. This treaty’s primary goal was to prevent climate change through stabilising atmospheric greenhouse gas concentrations. It was extended by the Kyoto Protocol in 1997.

As a signatory to these treaties, South Africa began developing climate-related legislation and regulations. Even before the publication of the National Climate Change Response Policy in 2011, climate change started featuring in other documents, such as the Drought Management Plan (2005) and the National Energy Act (Act 34 of 2008).

Of particular relevance to the pome- and stone-fruit industries are the Carbon Tax Act (Act 15 of 2019) and the Climate Change Act (Act 22 of 2024).

Concurrently, other countries were writing their own regulations, many of which are now being rolled out. The European Union’s Carbon Border Adjustment Mechanism is one example. For a discussion of this and other climate-related legislation, click here.

The full implications of national and international regulations for agriculture remain to be seen, but it’s clear that growers and pack houses will have to track, report, and reduce emissions.

Your problem is my problem

Perhaps more than any previous environmental threat, climate change has made humankind aware of our shared destiny on a small planet. The reality is that a business decision in one part of the world can impact people thousands of kilometres away.

Take packaging. There are several advantages to using plastic packaging: plastic is lightweight, inexpensive, versatile, and convenient. In the case of fruit, it helps to prevent moisture loss and maintain quality. All these benefits have made plastic packaging ubiquitous. Hence, we are now drowning in it.

Global plastic production doubled in the past 20 years, reaching 460 million tonnes in 2019. Of this, about half ends up in landfill, and a fifth is incinerated. Less than 10% is recycled, and the rest is burned in open pits, dumped into water bodies, or lands in the terrestrial environment. Additionally, plastic production is responsible for roughly 3% of global greenhouse gas emissions.

Packaging accounts for about a third of global plastic use. Much of this plastic is shipped around the world through international trade, making disposal a problem for the importing country.

Our deciduous-fruit industry has already made some headway in reducing plastics, for example, by shifting to thinner liners and cardboard trays and corner pieces. However, we will likely be asked to do even more once the European Union’s new Packaging and Plastic Waste Regulations are generally applied on 12 August 2026.

The regulations aim to limit single-use plastics, reduce packaging, minimise specific types of components, and increase recycled content in packaging. By 2030, all packaging in the European Union must be recyclable.

“We’re ready,” says Baijnath-Pillay. “Besides using less plastic, we’re researching alternatives and looking at whether we can formulate plastics to be recyclable abroad. This depends on the timely submission of the importing countries’ specifications, of course.”

Costs and benefits

For the deciduous-fruit industry, the proliferation of local and international standards and regulations packs a double whammy. There is the direct cost of compliance, and then there is the added cost of audits and certification.

“The regulatory environment has changed unbelievably, with more requirements and higher costs of compliance every year,” says Kotzé, reflecting on the past two decades. “I don’t see this stopping, and ESG is adding a whole new dimension.”

She points to a study of the cost of compliance that Hortgro did a few years ago. On average, a small grower could expect to spend R300 000 a year, and a large grower with multiple sites up to R3 million a year on systems, administration, and audit fees.

Similarly, work by Source Consulting for Fruit SA assessed direct and indirect costs, as well as capital expenditure, associated with compliance in the citrus industry. They calculated annual costs of approximately R200 000 for a small farm (up to 40 hectares), R570 000 for a medium farm (40–100 hectares), and R1.9 million for a large farm (more than 100 hectares).

An unintended consequence is that smaller farms are disappearing. A recent SIZA monitoring and evaluation report mentions a trend where smaller farms are being bought up by larger groups, as reflected in fewer SIZA subscribers, but the same number of hectares under cultivation.

“Smaller growers are under tremendous pressure,” confirms Kotzé. “You can only improve your efficiency and productivity so much, and larger growers are better able to absorb compliance costs and manage their production costs per hectare.”

On the plus side, she believes South African growers have an edge over their international competitors in terms of implementing systems, documenting results, and meeting standards.

Van Dyk agrees. “South African growers don’t need to fear audits. As SIZA, we’ve seen a near-perfect resolution of non-compliances over the past 10 years. Every correction demonstrates the continuous improvement on farms and better conditions for those working and living there.”

As our planet becomes hotter, our populations become more crowded, and we all become more connected, increased regulations and standards are inevitable. But enforced compliance can only achieve so much. Ultimately, the sustainability of the deciduous-fruit industry hinges on the commitment of its people.

“The vast majority of our growers want to do the right thing,” says Van Dyk. “South Africans have a different mentality. They do more than they need to do.”