Transcript Armenia: Managing Food Safety and Agricultural Health

Moldova: Managing Food
Safety and Agricultural Health
An Action Plan
Kees van der Meer (SPS specialist; consultant)
Agriculture and Rural Development Department
The World Bank
Presented by video conference on January 31, 2008
Background of this study
• Food safety and agricultural health are challenge
for participation in international trade
• Sanitary and Phytosanitary measures (SPS) part
of WTO agreement
• World Bank SPS Action Plans: Vietnam, Laos,
Armenia, Moldova
• Peculiarities of transition economies (CIS):
shared institutional legacy
Part 1
Food Safety and Agricultural Health
Management in CIS Countries
Part 2
Specifics for Moldova
Common issues in CIS countries
• Recovery from post-independence shock
• Further growth depends increasingly on product quality and
diversification
• Present GOST-based system constrains competitiveness
– Incompatible with international standards (WTO SPS/TBT), not
recognized by OECD countries
– Costly for enterprises and consumers
– Sometimes stifles innovation
• Food safety, animal and plant health outcomes
unsatisfactory
Diversity: Country groups
Group I
Belarus, Kazakhstan,
Russia, Ukraine
Group II
Armenia, Azerbaijan,
Georgia, Moldova
Group III
Kyrgyz Rep., Tajikistan,
Turkmenistan,
Uzbekistan
Economic
development level
Moderate – high
Low – moderate
Low
Food safety
situation*
Good–Moderate
DALY rate: 33-101
Good–Moderate
DALY rate: 31-440
Moderate–Poor
DALY rate: 147-1103
Animal health
situation
Perceived increase in zoonotic diseases from
smallholder farms although official databases give
strong decline in tuberculosis and brucellosis in
Moldova, Russia and Ukraine. Emergence of HPAI.
Plant health
situation
Threat of introduction of pests due to weakened border control
Good or moderate capacity
to detect mycotoxin and
pesticide residues, to deal
with disease and pest
outbreaks; moderate plant
quarantine
* DALY = Disability adjusted life year
Weak capacity to detect
mycotoxin and pesticide
residues, to deal with
disease and pest
outbreaks; weak plant
quarantine
Rise in Echinococcosis and
other zoonotic diseases
Very weak capacity to
detect mycotoxin and
pesticide residues, to deal
with disease and pest
outbreaks. Very weak plant
quarantine
GOST vs. international standards
GOST
International
standards
Responsibility of
food safety
Public sector
Private sector
Focus of control
Product
‘End-of-pipe’
Process
‘Chain’
Nature of
requirements
Highly prescriptive Safety is mandatory
and mandatory
Quality is voluntary
• Inconsistent procedures, methodologies, criteria
• Incompatible laboratory facilities, equipment and tests
• GOST has many deficiencies for a market economy
Why not simply replace GOST by
international standards?
Difficulties
• High budgetary cost
• Limited technical capacity, including language
– especially in area of risk-based management
• Need for double system (Russia and other CIS
still require GOST)
• Vested interest in maintaining old system
• Potential impact on large informal sector
Reforming food safety and agricultural health management:
Central and Eastern Europe (CEE) and CIS
• Similarity:
– Common heritage of GOST standards and institutions
• Difference in reform objective:
– CIS:
•
•
•
•
compliance with WTO principles;
compatibility with market economy;
improved food safety and agricultural health;
improved competitiveness of agro-food industry
– CEE:
• full adoption of EU Acquis Communautaire
Reform cost
• Reform in food safety and ag health in EU accession
programs
– SAPARD investment agro-processing and marketing (2000-6) for CEE
• Equivalent to 2.5% of agricultural GDP annually for 7 years
– EU funds under PHARE for SPS-related activities (2000-2006)
• Poland: € 115million (0.4% of ag GDP/year)
• Lithuania: € 24million (0.8% of ag GDP/year)
• Action plans for SPS capacity building in Armenia and
Moldova - estimated external funding (6 years)
– Armenia: US$ 7.7million (0.20% of ag GDP/year)
– Moldova: US$ 9.7 million (0.45% of ag GDP/year)
Institutional challenges
•
•
•
In CIS: too many institutions, too many
inspections; institutions (and staff) depend on
income from inspections
Many “GOST” skills no longer needed
Experience of consolidation of services and labs
– Poland
• Ministry of Health labs fell from 248 to 66
– Lithuania:
• 3 former agencies for food control merged into the State Food
and Veterinary Service (SFVS) reporting directly to the Prime
Minister
• consolidation of SFVS labs: from 50 in 1994 to only 10 in 2001,
and further consolidation anticipated (1 central and 4 regional)
EU accession experience:
economic impact of compliance
•
Consolidation of food industry
Bulgaria
–
Of 237 slaughterhouses in 1999, 144 were closed down by the middle
of 2006. Only 22 of those remaining were fully in line with the EU
requirements, 71 have been extended a transition period
–
Out of the 312 meat processing operations in 1999, 146 were closed
down by the end of 2006
–
Out of 512 units in the milk industry in 1999, 341 were closed down by
the middle of 2006
Poland
–
Meat industry declined from about 7,000 companies in 2001 to 3,000 in
2006
–
Slaughterhouses from 2,600 to 1,200
•
Cost for consumers may rise if informal markets are wiped out
Country groups: different options
Group I
Belarus,
Kazakhstan,
Russia, Ukraine
Group II
Armenia, Azerbaijan,
Georgia, Moldova
Group III
Kyrgyz Republic,
Tajikistan, Turkmenistan,
Uzbekistan
SPS capacities
Relatively strong
Weak
Very weak
Available financial
resources
Relatively rich
Scarce
Scarce
Main market
Internal market,
EU
Russia, EU
Southern Siberia, China
and South Asia
SPS requirement
High-medium
High-medium
Relatively low
Reform options
Adopt international
standards; allaround capacity in
testing, risk
assessment
Selectively adopt
international
standards; adopt EU
standards only for
products with good
export potential
Reform standard system
to be WTO-compliant;
give priority to reducing
public health risks
Improving international
assistance
Weaknesses in donor projects
• Due to absence of strategy and political leadership on
demand side
– Low cost-effectiveness
– Poor sustainability
Recommendation for future activities
• Assistance in formulating comprehensive food safety and
agricultural health strategy
• Better donor coordination based on strategy
• Early support for analysis of risks, costs, benefits
• “Twinning” proven effective for capacity building
Concluding remarks on CIS
• Present system and capacities form constraints on
– human and agricultural health outcomes
– agricultural growth, market access and competitiveness
• Replacement of GOST is part of
– transition to market economy
– integration into the international trade system
• Russia’s WTO accession poses challenge to small CIS
countries
• Careful selection of reform goals and prioritization is needed
• Different options for each country, based on geographic,
economic, commercial, technical, and political conditions
• More effective donor support is needed
Part 1
Food Safety and Agricultural Health Management in CIS
Countries
Part 2
Specifics for Moldova
Moldova’s Agricultural Potential
• Agricultural growth potential not fully realized
• Exports main driver for growth
• However, export performance is relatively
weak in the region
Export value 2004 in percent of 1997
EU15
CEEC
CIS
Total
Export
Azerbaijan
150
100
293
285
Georgia
560
250
232
264
Moldova
115
83
155
138
Ukraine
155
240
148
196
Estonia
227
179
22
86
Hungary
186
149
56
138
Lithuania
359
435
69
174
Latvia
462
378
65
173
Poland
299
388
61
195
Slovakia
316
301
43
240
Reasons for Weak Export Performance
• Late start with reforms
• Many changes in policies
Poor investment climate
• Moldova is member of WTO, but not yet fully
benefited from international trade
Market Access Challenges
• Growth of domestic supermarkets and their
requirements
• Increased competition from imports
• Rapid increase of international requirements
 Difficulty in penetrating EU market
 WTO accession of Russia and Ukraine and harmonization
with EU standards
 EU enlargement: reduced access to CEEC markets
(example: Romania)
• Market with GOST standards will decline in volume
and price
Main Issues and
Recommendations for Future
Actions
Institutional Framework
• Overlap of responsibilities
• Too many inspections
(Example: Vet and food safety inspection at marketplaces)
Future direction: choice from two alternatives
– Delineation of responsibilities and better alignment
of functions among agencies
– Single food agency (as in Lithuania)
Regulatory Framework
• Laws are WTO compliant, but no implementation
• GOST regulations still used in practice despite official
abolition -- few regulations and standards have been developed
Recommended Actions
• Train staff in risk analysis as a base for policy making and
design of implementation programs
• Prepare a work program for the development of new
regulations and standards consistent with international
standards and suitable for market economy
• Prioritization based on risk assessment and cost-benefit
analysis (first: main health risks and products with good export
potential)
Certification and Accreditation
• Current system adds unnecessary cost of doing
business
Recommended actions
• Repudiate mandatory conformity assessment for food
products
• Ban conformity assessment at borders
• Allow accredited private certification bodies to play a
greater role
• Seek mutual recognition between the Moldova
Accreditation Center and EU
Inspection, Monitoring, Surveillance
•
System still largely based on GOST not on risk
assessment, cost benefit analysis
•
Should be better targeted on human and agricultural
health and market access
Recommended actions
•
Redesign inspection, monitoring and surveillance
programs based on priority setting and cost
effectiveness
•
Make one agency responsible for food safety in
domestic marketplace and sales points for food and
beverages
Laboratory system
• Each SPS agency has a system of central and regional labs
• Same testing repeated by different labs for same product –
waste of public resources and extra costs to private sector
• Laboratories are under-funded and use outdated
technologies and equipments
Recommended actions
• Design a program for consolidation of lab system
• Veterinary labs need to be reorganized
• Provide training in lab management and testing method
• Upgrade equipment
Border Control
• Border control procedures WTO-compliant or not?
• Veterinary and phytosanitary services unable to keep up
with the Customs’ upgrading of technology and efficiency
• Government monopoly in fumigation
Recommended actions:
• Assess border procedures and bring them into compliance
with international requirements of nondiscrimination
• Improve computers and ICT of veterinary and plant
inspection and quarantine services at border posts
• Privatize fumigation services for plant quarantine
Plant health
• Contents testing needed for pesticides in market
Recommended actions:
• Assign testing of contents of pesticides to lab with best
capacities
• Registration policy for pesticides should accept
information and registration from neighboring
countries
• Modernize the Central Plant Inspection and Quarantine
Laboratory and district lab equipment
Animal health
• Present system of stamping out needs improvement
• Restocking support should be added
• Overstaffing of veterinary services
Recommended actions:
• Design a better system to support the stamping out of
livestock diseases; and initially focus on a limited
number of diseases
• Separate public and private functions in veterinary
services
Information and Education
• Awareness raising and education in improving food
safety and agricultural health appears to be neglected
• Hygiene, botulism, mushroom poisoning are issues
for education
Recommended actions:
• Develop and disseminate public programs for
awareness raising and education
• Expand anti-parasitic disease campaigns carried out
by CPM and include preventive actions with domestic
animals (especially dogs) and livestock
Private Sector
• Outdated structures, technologies, practices
• Small-scale, under-capitalized
Recommended actions
• Develop a comprehensive plan for the convergence
toward EU principles of hygiene in food processing
• Provide processors with training in good
manufacturing practices (GMP), HACCP, etc.
• Improve water treatment for overall hygiene and food
safety of processing plants
Summary of Action Plan
• A total of 32 recommended actions over 3-5 years
• Estimated cost:
– Public sector
about US$ 9.7 million *
– Private sector
> US$ 3 million
– Pesticides, water
> US$ 5 million
• Initial investment push needed with support from
donors
* Tentative estimated ERR for public sector is 11-14%
Concluding remarks
• Present capacities form constraints on
– market access and competitiveness
– human and agricultural health
• Standards reform is part of transition to market economy
• Given scarce resources, careful sequencing and prioritization
is needed
• Regular consultation with all stakeholders required
• Effective support from donors is needed
• Basic principle for reform: the SPS system should be used to
facilitate business and trade while protecting human and
agricultural health, not to tax producers and exporters