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Planned amendments to the EU eco-regulation multiply the cost of certification for co-operatives – joint letter signed by fair trade members

Kakao Qualitaetskontrolle SaoTome 350Gräfelfing, 15.09.2020 – Whatever the product, be it coffee, cocoa, bananas or cane sugar: a good number of the organic products we consume on a daily basis are grown by smallholders in the global south. For them, reliable and affordable certification is just as important as being paid a fair price. It is this former aspect which the amendments the EU plans to make to its inspection system that will make the hardest financial impact on these very smallholders.

“The EU Commission’s actual intention is to make the certification of producer groups more reliable”, comments Steffen Reese, who is the general manager of Naturland, organic agricultural association, and a board member of Forum Fairer Handel, the German fair trade association. “However, the proposals presented so far will in all probability have the converse effect”, he warns. In a joint letter signed by Naturland, Forum Fairer Handel, GEPA – The Fair Trade Company and Fairtrade Deutschland, addressed to Julia Klöckner, Germany’s minister of agriculture, they called for her to make a case for Brussels to come up with more viable solutions.

Smallholders lose earnings opportunities in the field of organic fair trade

“The proposals made by the EU mean that the co-operatives will have to spend their meagre financial resources on unnecessary new administrative structures and higher certification expenditure instead of concentrating on training their members and developing their internal control systems. Consequently the system as a whole will not be strengthened but on the contrary weakened, if not actually destroyed”, said Reese on Tuesday in Gräfelfing.

In fact, Brussels not only intends to make a significant increase in the number of spot checks required but also to limit the size of individual co-operatives to 2,000 members, a figure which fails totally to take into account the actual situation in many countries of the global south with their thousands of micro-farms. Besides this, the co-operatives will also be expected to organise the certification process themselves in future, which imposes an additional burden on them. To date it was usually the exporters and processing entities which took care of these arrangements.

Taking Uganda as an example: certification expenses quadrupled

GEPA – The Fair Trade Company has extrapolated the effect of the amendments planned by taking Ankole Coffee Producers’ Cooperative Union (ACPCU) in Uganda, which is certified to the Naturland Fair standards, as a concrete example. So far, the cost of inspection of the some 8,200 smallholders amounts to about 12,000 euros, including analysis expenses. The proposals made by the EU Commission mean that these costs would more than quadruple, to almost 50,000 euros. It is almost impossible for the co-operative to absorb this additional expense.

“These proposals mean that many smallholders‘ families will lose important opportunities to generate income, just because Brussels is imposing a burden of unnecessary expenses to attain market access, expenses which they cannot meet“, warns Reese, general manager of Naturland. If these measures force co-operatives to give up on organic agriculture, this would also endanger many organic projects in the global south pursued by Germany and its individual states. Even though the Commission has made some partial improvements to its original plans, which were even more radical to start with, such as the size of the groups, it is crucial that further corrections be made. “Our minister for agriculture, Klöckner, must therefore first and foremost make a case in Brussels for the certification of the co-operatives to continue to be arranged by the exporters and processing entities”, demands Reese.

Explanatory notes

Co-operatives and producers‘ associations play a leading role in organic agriculture in non-European countries. In many countries in Africa, Asia and Latin America, one single co-operative will often act as the co-ordinating entity for several thousand smallholders who individually often farm little more than one hectare. In order to perform effective but also affordable organic tours of inspection in accordance with European standards, the co-operatives adopt an internal control system (ICS).

The ICS stipulates how the members of the co-operative monitor each other to determine their conformity with the organic standards. The EU inspection body then does not need to visit each of the micro-farms but concentrates primarily on checking that the ICS is performed correctly. To guarantee the reliability of the system, risk-based spot-checks and analyses of the raw goods are also performed.

The EU Commission now proposes, among other things, setting the minimum rate of individual inspection visits and analyses of raw goods at 5% resp. 2%, regardless of the degree of risk. Furthermore, a co-operative would now have no more than 2,000 members. Depending on the current size of a co-operative, this new regulation would mean increasing the number of inspection tours three- to fourfold in many cases. In addition, the division of the co-operatives into smaller groups would cause considerable administrative expense and disruption.

About Naturland

Naturland is one of the largest organic associations both in Germany and world-wide. The fact that there are over 70,000 Naturland farmers in just under 60 countries throughout the world goes to prove that mutually beneficial economic activity based on organic, social and fair-trade concepts is a recipe for success. In Germany alone, the association has some 4,000 members. Most of Naturland’s farmers outside Germany are members of smallholder co-operatives and producer organisations. Its global presence makes Naturland unique as an organic association representing a coherent two-pronged approach by combining regionalism with international activity in a globalised world.

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