aug12 rita VeenaJha

Slide1: 

Mapping the Challenges, Veena Jha Environmentally Preferable Products

Slide2: 

Increasing consumer demand Production and exports of environmentally preferable products (EPPs) may: Enhance competitiveness Result in “win-win” situations, i.e. trade, environmental, and developmental gains Provide options for diversification Result in price premiums However, investment required may be high and returns uncertain need for objective information and analysis TrainforTrade: Trade, Environment and Development Why important?

Slide3: 

Selected categories of EPPs Key issues Costs Standards and certification Information requirements Issues for discussion Opportunities and constraints in the case of Viet Nam Capacity building needs and follow up TrainforTrade: Trade, Environment and Development Structure of this presentation

 Criteria of environmental friendliness: 

Use of natural resources and energy Amount of waste generated along the life cycle Impact on human and animal health Preservation of the environment Source: UNCTAD/COMM/70 Criteria of environmental friendliness TrainforTrade 2000: Trade, Environment and Development

Slide5: 

Categories examined in this module: Organic food and agricultural products Certified timber products Non-wood forest products (NWFPs) Products based on traditional knowledge Fairtrade products TrainforTrade: Trade, Environment and Development Examples of EPPs

Slide6: 

Lack of awareness of benefits of organic agriculture by producers, consumers, governments, and other stakeholders Lack of know-how and extension services Limited research Risks involved in shifting to new farming methods Uncertain crop yields Lack of infrastructure, incl. ransport and storage TrainforTrade: Trade, Environment and Development Constraints (1)

Slide7: 

Inability to achieve economies of scale due to small holdings Limited market information Difficult market access High certification costs TrainforTrade: Trade, Environment and Development Constraints (2)

Slide8: 

Promising trading opportunities The size of certified organic agricultural sector is still small (generally not more than 1 to 2 per cent in developed countries) Products from developing countries need to compete in markets with stringent quality requirements, increasing pressure for subsidies and other support measures, uncertain price premiums and preferences for locally-produced food TrainforTrade: Trade, Environment and Development Still a niche market.............

Highlights of International Market of Organic Products: 

Highlights of International Market of Organic Products World market US market European market German market Annual growth rate in major markets Fastest growth rate US$17.5 billion US$ 8 billion US$ 7 billion US$ 2.2-2.4 billion 10-20 per cent United Kingdom (25-30 per cent)

Highlights of International Market of Organic Products: 

Highlights of International Market of Organic Products Highest percentage of food sales Major commodities Major exporters Major developing country exporters Switzerland and Denmark Grains, coffee, tea, cotton United States, Italy Mexico, Argentina, Chile

Slide11: 

TrainforTrade: Trade, Environment and Development Standards and certification Organic products sold in the markets of developed countries need to be certified Very large number of standards and labels by private bodies and government institutions Initially, most programmes were managed by the private sector Recently more Government involvement

Slide12: 

TrainforTrade: Trade, Environment and Development Standards and guidelines IFOAM (International Federation for Organic Agricultural Movements) Codex Alimentarius European Union United States For a datase on legislation concerning organic standards see: http://www.organic-research.com/Laws&Regs/legislation.htm

Slide13: 

TrainforTrade: Trade, Environment and Development General Principles set out the goals of organic production and processing Recommendations provide “standards” which IFOAM promotes, but does not require to be incorporated into certification standards Basic Standards are the minimum requirements that must be fully incorporated into certification standards

Slide14: 

TrainforTrade: Trade, Environment and Development IFOAM Basic Standards have been developed, for example, for Crop Production Animal Husbandry Aquaculture Production Processing and Handling Forest Management Processing of Textiles

Slide15: 

TrainforTrade: Trade, Environment and Development Codex Alimentarius Guidelines Guidelines for the Production, Processing, Labelling and Marketing of Organically Produced Foods. GL 32 – 1999 Coverage Unprocessed plants and plant products Processed product for human consumption, derived mainly from the above http://www.fao.org/es/esn/codex/STANDARD/standard.htm

Slide16: 

TrainforTrade: Trade, Environment and Development EU: Imports (1) Article 11 of Regulation 2092/91, paragraph 1 “third-country” list of countries with which equivalence is established Countries currently on the list: Argentina, Australia, the Czech Republic, Israel, Hungary and Switzerland

Slide17: 

TrainforTrade: Trade, Environment and Development EU: Imports (2) Article 11 of Regulation 2092/91, paragraph 6 By way of derogation from paragraph 1, organic products from other countries can be marketed in the EU provided the importer submits documentation to confirm that the products are produced and certified according to rules equivalent to those of EU Managed by EU Member States Used by over 70 countries, incl. Viet Nam

Slide18: 

TrainforTrade: Trade, Environment and Development United States (1) The Organic Foods Production Act (OFPA) of 1990 required the US Department pf Agriculture (USDA) to develop national standards for organically produced agricultural products and to establish an organic certification program The National Organic Program (NOP) is a marketing program housed within the USDA Agricultural Marketing Service (AMS), the agency that sets marketing standards

Slide19: 

TrainforTrade: Trade, Environment and Development United States (2) Certifying agents operating in foreign countries may apply for USDA accreditation Otherwise, a foreign certifying agent may: Receive recognition when USDA has determined, upon the request of a foreign government, that its authorities are able to assess and accredit certifying agents as meeting the requirements of the NOP; or Receive recognition as meeting requirements equivalent to the NOP under an equivalency agreement negotiated with the United States

Slide20: 

Organic food standards have been notified under TBT Agreement Potential trade policy issues include standards, harmonization, equivalence, subsidies, conformity assessment procedures and trade preferences TrainforTrade: Trade, Environment and Development Trade policy issues

Slide21: 

Over 150 countries are participating in a number of regional and international processes aimed at establishing criteria and indicators for SFM The International Tropical Timber Organization (ITTO) was the first organization to elaborate agreed guidelines for sustainable management of natural tropical forests TrainforTrade: Trade, Environment and Development Sustainable Forest Management

Slide22: 

Increasing number of producer countries, such as Malaysia, Indonesia, Finland, Sweden and Canada, with certification schemes international certification systems The International Standards Organisation (ISO) Forest Stewardship Council (FSC) Certified forests account for approximately two percent of the world's forests TrainforTrade: Trade, Environment and Development Timber certification

Slide23: 

A system for the certification of sustainable forest management is being developed under the ISO 14000 Series Objective: To develop a tool for forestry organisations to continually improve their management systems and thereby their environmental performance It is a process, not a performance, standard TrainforTrade: Trade, Environment and Development ISO system for certification of SFM

Slide24: 

Encourages global forest management which is sustainable from environmental, economic and social point of view Favours a performance-based approach. Criteria for sustainably managed forests and for plantations The FSC certificate guarantees the “chain of custody” of timber, considering its life cycle (including transport or processing) TrainforTrade: Trade, Environment and Development Forest Stewardship Council (FSC) (1)

Slide25: 

The FSC is an accreditation organisation (does not certify itself). Certification to be carried out by accredited organisations that must adhere to the FSC principles Accredited organisations include: Soil Association (UK), Rainforest Alliance (USA), Scientific Certification Systems (USA), SGS Qualifor (UK), SKAL (Netherlands) TrainforTrade: Trade, Environment and Development Forest Stewardship Council (FSC) (2)

Slide26: 

Extensive media campaigns by NGOs (e.g. Germany, the Netherlands and the UK) Europe: demand for sustainably produced timber presently exceeds supply Certification can be used as marketing tool Also concern that certification could act as trade barrier against those unable to become certified Need to avoid discrimination against tropical timber TrainforTrade: Trade, Environment and Development Timber certification and trade

Slide27: 

FAO: “Goods of biological origin other than wood, derived from forests, other wooded land and trees outside the forest” NWFPs include food items, such as honey, nuts, berries, mushrooms, essential oils, spices, and animal fodder, construction materials, medicinal plants, other health care and cosmetic products, and items of cultural and spiritual significance TrainforTrade: Trade, Environment and Development Category Non-wood forest products

Slide28: 

NWFPs are primarily consumed at the local or national level Particularly for the poor in developing countries, NWFPs can be of crucial importance, both for the material needs of the family and as a means to generate income Around 80 per cent of the population in developing countries use NWFP to meet nutrition and health needs TrainforTrade: Trade, Environment and Development Important at local level...

Slide29: 

Harvesting, processing and marketing NWFPs can be important for local employment and provide the basis for local small-scale industries External entrepreneurs often appropriate a large part of the revenues of NWFPs Efforts must be made to enhance the value-added accruing to local communities Environmental limits must be taken into account TrainforTrade: Trade, Environment and Development Local employment and industry...

Slide30: 

Exports of NWFPs are a significant source of foreign exchange earnings for several developing countries Some 150 NWFPs are traded internationally in significant quantities, including cork, essential oils, forest nuts, gum arabic, rattan and plant and animal components of pharmaceutical products World trade in NWFPs is roughly US$ 11 billion TrainforTrade: Trade, Environment and Development World trade: no reliable statistics...

World Trade in NWFPs (US$ millions): 

World Trade in NWFPs (US$ millions) Natural honey Mushrooms and truffles Nuts Spices Ginseng roots Gum arabic Plants used in pharmacy Essential oils Cork and cork products Rattan 268.2 210.7 593.1 175.7 389.3 101.3 689.9 312.5 328.8 19.0 TrainforTrade: Trade, Environment and Development Preliminary figures!!

Slide32: 

The most promising NWFPs for commercial development are those with a high-yielding resource base that can be exploited in a sustainable manner Many NWFPs can flourish on secondary forest land and farmland Promoting the domestication of these NWFPs is an option for generating local household income while at the same time reducing pressure on the wild resource. This, however, may deny benefits to local and indigenous communities TrainforTrade: Trade, Environment and Development Commercial development of NWFPs

Slide33: 

Alternative wood sources Bamboo: used in furniture production and a range of traditional uses, such as handicrafts Food products Medical substances TrainforTrade: Trade, Environment and Development Examples of market opportunities (1)

Slide34: 

Cosmetics and perfumery Biopesticides Biochemicals Lac, the resinous secretion obtained from the hemipterous insect and produced in Viet Nam finds a variety of uses in plastics, adhesives, wood finishing, polish and others TrainforTrade: Trade, Environment and Development Examples of market opportunities (2)

Slide35: 

TK may have cultural and spiritual values that preclude commercialization Problems with marketing, standardization, and scaling up production Risk of over-harvesting economically significant TK-based natural products TK is often accessed by companies through databases and literature, and in some cases through multiple intermediaries: access to TK and sharing of benefits have often been de-linked TrainforTrade: Trade, Environment and Development Constraints

Slide36: 

Raising awareness of the commercial potential among Government and local and indigenous communities Identifying aspects of TK that could be of wider interest and a basis for commercialization Developing capacities to meet stringent standards, for example in the case of herbal medicines Obtaining market information TrainforTrade: Trade, Environment and Development What is needed? [1] [

Slide37: 

Establishing certification procedures to guarantee that products are made by LICs and enhance their commercial value Develop and implement other instruments to enhance commercial value of TK-based products, including IPRs Explore ways in which benefit-sharing packages can be structured to benefit LICs and conservation Developing partnerships, including capacity building and technology transfer TrainforTrade: Trade, Environment and Development What is needed? [2]

Slide38: 

Fair production conditions and trading relations, including: A price that covers the cost of production Social premium for development purposes Partial payment in advance to small producer organizations Long term trade relations that allow proper planning and sustainable production practices Minimum environmental criteria TrainforTrade: Trade, Environment and Development The fair trade label guarantees:

Slide39: 

Producer organizations produce a range of handicraft and food products Consumers Fair trade importing organizations buy products at a fair price directly from producers and give them various forms of advice, support and training. They sell the products through channels such as specialized "world shops", local groups, and increasingly supermarkets TrainforTrade: Trade, Environment and Development Who is involed?

Slide40: 

World Shops sell fair trade products and raise awareness about fair trade issues Fair trade labelling initiatives seek to enlarge the market for fair trade products by bringing them into mainstream sales outlets like supermarkets while at the same time offering consumers an independent guarantee of fair trade standards TrainforTrade: Trade, Environment and Development Who is involved?

Slide41: 

Founded in 1997 to coordinate efforts and to ensure the audit of all fair trade labelled products from the producer to the supermarket shelf FLO has developed criteria for coffee, cocoa, tea, honey, sugar, bananas and orange juice It also aims at the introduction of a single international fair trade label TrainforTrade: Trade, Environment and Development Fairtrade Labelling Organisations (FLO) International

Slide42: 

Products including coffee, chocolate, tea, honey, sugar, bananas, and orange juice are now available in more than 43,000 supermarkets throughout Europe Market shares are expanding, in particular in Switzerland and the Netherlands Market share of fair trade bananas is 15% in Switzerland and 4.2% in the Netherlands The market share of fair trade tea is 4% in Switzerland and 2.5% in Germany. TrainforTrade: Trade, Environment and Development Markets for fairtrade products

Slide43: 

Producers Producers need information on environmentally sound technologies (ESTs) and production practices Marketing intelligence Consumers Consumers may not have enough information about the availability and benefits of particular EPPs Need for campaigns TrainforTrade: Trade, Environment and Development Information on EPPs

Slide44: 

Many EPPs, such as NWFPs, are new products, and introducing them to the market is important. It is easier to start with products that are already on the market Certain EPPs are still mostly sold in niche markets: low traded volumes are normally associated with higher unit transaction costs which make EPPs less price competitive and, hence, less attractive to traders and consumers. TrainforTrade: Trade, Environment and Development Commercial strategies (1)

Slide45: 

Shift to the mainstream is often hampered by lack of reliable supplies of adequate quantity and consistent quality. Supply of commercially viable quantities of EPPs can be achieved, for example, by associating small producers in cooperatives Direct channels may provide better chances of obtaining price premiums TrainforTrade: Trade, Environment and Development Commercial strategies (2)