Costs and benefits of compliance with globalgap standards: the case of vegetable exports from Tanzania
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Date
2013
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Sokoine University of Agriculture
Abstract
The objective of this study was to carry out an economic analysis of the costs and benefits
of compliance with GlobalGAP- certified vegetable production in Tanzania. GlobalGAP is a private standard which has been developed by the "‘Euro-Retailer Produce Working
Group” (EUREP) and farmer representatives for the certification of Good Agricultural
Practices worldwide. The standard focuses on risk analysis and risk prevention for the
purpose of food safety, traceability, workers health and welfare, energy management,
environmental pollution and conservation management. Data for the study were collected
from a sample of one vegetable exporter, five large scale vegetable farmers; six medium
scale farmers; and 146 smallholder farmers in Arusha and Kilmanjaro Regions. Purposive
and systematic sampling procedures were used to select exporters, large and smallholder
farmers whereas stratified random sampling techniques were used to select smallholder
farmers. Data were analyzed both qualitatively and quantitatively. Costs and benefits for
exporters and farmers were quantified and compared using accounting methods. It has
been shown that vegetable value chains in Tanzania are ill resourced and inadequately
organised. The value chains are characterised by dominance of smallholder farmers who
produce 60% of the vegetables, narrow base of market outlets and inadequate institutional
services. Approximately 90% of the vegetables produced in the study areas are exported
mainly to the EU. The remaining 10% are channelled through the emerging local
supermarkets and the traditional markets. GlobalGAP requirements create numerous
challenges and opportunities to vegetable value chain participants in Tanzania. Indeed, the
implementation of GlobalGAP certification schemes is both costly and beneficial for
exporters and farmers. Certified exporters and farmers benefit from the overall improved
management and efficiency; corporate image, vegetables quality, market access (assured
market, stable prices, higher prices, etc), environment, community relations, support
services (access to market information) as a result of GlobalGAP compliance. The study recommends better organisation of the value chain players and facilitation of access to
various resources and services; strengthening the country's capacity to implement
standards developed in the importing countries; building the capacity in testing services
and quality management; and improving technical, information and legal framework for
promotion of vegetable exports; promoting collective activities for compliance; promoting
the use of low cost inputs and irrfproved technologies so as to reduce compliance costs.
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Thesis
Keywords
Globalgap standards, ‘‘Euro-Retailer Produce Working s Group” (EUREP), Food safety, Smallholder farmers