The Impact of Food Safety Standards
on an Export-Oriented Supply Chain:
Case of the Horticultural Sector
in Guatemala
Spencer Henson and Jose Blandon
Prepared for
The Economic Commission for Latin America and the Caribbean
(ECLAC)
International Food Economy Research Group (InFERG)
Outline





Introduction
Aim of the study
Framework
Guatemala’s horticultural sector
Two case studies
Snow Peas
Berries
 Conclusions
2
International Food Economy Research Group (InFERG)
Introduction
 Proliferation and enhance stringency of
food safety standards
 Standards can act as barriers to trade
 Conversely, standards can act as catalyst
for upgrading and innovation
 Developing countries face limitations to
respond strategically to standards
 Impacts on exports depend on the
capacity to comply with standards
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International Food Economy Research Group (InFERG)
Aim of the study
 The present case study analyses the
impact of food safety standards on the
horticultural sector of Guatemala
 Focuses on exports of snow peas and
berries to the United States, where
problems have been experienced with
pesticide residues and microbiological
contamination
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International Food Economy Research Group (InFERG)
Framework
Strategic response to food safety standards
Reactive
Proactive
Exit
Wait for standards and
give up
Anticipate standards, leave
particular markets or
market segments, and
make other commercial
shifts
Loyalty
Wait for standards and
then adopt measures to
comply
Anticipate standards and
comply ahead of time
Voice
Complain when existing
standards are applied or
new measures are adopted
Participate in standard
creation and/or negotiate
before standards are
applied
Source: Henson and Jaffee (2007)
International Food Economy Research Group (InFERG)
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Framework (Cont’d)
Actors in strategic response to evolving food safety standards
Individual
Collective
Public
Specific Ministry or agency
Inter-ministerial taskforces
Government to government
memoranda of understanding
Multi-country SPS counternotification
Public-private
Subsidies/Co-financing
Joint-ventures
Joint public-private sector
task-forces
Private
Firm/farm investments
Company ‘codes of practice’
Trade/industry associations
Grower associations
Partnerships in coordinated
supply chains
Source: Henson and Jaffee (2007)
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International Food Economy Research Group (InFERG)
Guatemala’s horticultural sector
 Non-traditional agricultural exports as an
economic development strategy since 1980s
 Fruit and vegetable exports have increased
considerably in the last two decades
 However, exports still face several food
safety problems
 United States is the main market for
Guatemala’s exports of fruits and vegetables
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International Food Economy Research Group (InFERG)
Guatemala’s hort. sector (Cont’d)
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
US$ '000
Guatemalan agricultural exports to the US, 1989-2006
Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics (2007)
International Food Economy Research Group (InFERG)
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Guatemala’s hort. sector (Cont’d)
US border detentions of agricultural and food
product imports from Guatemala, 2000-2006
Product
2002
2003
2004
2005
2006
Edible Seeds
3
1
4
0
0
Squash
8
1
6
3
5
Meats and Seafood
3
6
8
6
5
Sauces/Seasoning
9
6
5
12
7
Beverages
2
10
2
10
15
Cereals and Chips
5
3
5
1
12
Fresh/French Beans
4
16
23
10
3
Fresh Peas
35
33
23
18
27
Other Fruit and Vegetables
11
19
18
16
28
TOTAL
80
95
94
76
102
Source: FDA (2007a)
International Food Economy Research Group (InFERG)
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Snow peas
 Guatemala is the main exporter of snow peas to the
United States
 Guatemala has consistently had problems of
pesticide residues with snow peas in the US market
 Although exports have grown, border detentions
and price discounts have seriously diminished export
revenue
 Guatemala has responded by improving pesticide
management and raising ‘voice’ through the Integral
Program for Agricultural and Environmental
Protection (PIPAA)
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International Food Economy Research Group (InFERG)
Snow peas (Cont’d)
Volume of US fresh pea imports by source, 1989-2006
35,000
30,000
MT
25,000
20,000
15,000
10,000
5,000
Guatemala
Mexico
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
0
Other
Source: Department of Commerce, US Census Bureau, Foreign Trade Statistics (2007)
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International Food Economy Research Group (InFERG)
Snow peas (Cont’d)
Unit price of fresh pea imports to the US by destination
2.5
US$/Kg
2
1.5
1
0.5
0
2000
2001
2002
Guatemala
2003
Mexico
2004
2005
2006
Peru
Source: Department of Commerce, US Census Bureau, Foreign Trade Statistics (2007)
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International Food Economy Research Group (InFERG)
Fresh Berries
 Raspberry industry was very promising at the
beginning of 1990s, as another NTAE promotion
initiative
 Microbiological contamination due to
Cyclosporiasis caused the demise of the industry
 Guatemala responded with the Model Plan of
Excellence, which was a technical success, but
not economically-feasible
 Reputation affected not only raspberry industry,
but also other berries (e.g., blackberries)
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International Food Economy Research Group (InFERG)
Fresh Berries (Cont’d)
Volume of Guatemalan fresh berry exports, 1994-2006
3,500
3,000
Tonnes
2,500
2,000
1,500
1,000
500
0
1994
1995
1996
1997
1998
1999
USA
2000
2001
2002
2003
2004
2005
2006
Rest of world
Source: SIECA (2007)
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International Food Economy Research Group (InFERG)
Conclusions
 Snow pea and berry cases illustrate the challenges
associated with food safety standards
 Response of Guatemala can be broadly
characterized as ‘reactive’
 Raspberry case has been more dramatic, which
affected not only this product, but also other berries
 The positive outcome of these two cases has been
the multi-sector response to face both cases.
 Is generally considered that actions taken have
significantly contributed to enhance food safety
controls in the horticultural sector
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International Food Economy Research Group (InFERG)