Despite increasing interest in organic products in the Netherlands, the growth of this market is hampered due to the difficulty in guaranteeing a constant supply of fresh products. Due to its location in the southern hemisphere, South Africa can supply some of these products in the European winter season and is therefore an attractive trading partner, concludes LEI Wageningen UR in a study into South African market flows of organic fruit, vegetables and wine.
South Africa has good logistics and trade with the Netherlands has great potential. A good working relationship between the trade partners in the longer term is also an essential aspect. Importers can contribute to this by informing the producer about the condition of the product on arrival or the price at which it is marketed here. Local producers are very motivated to change to organic production methods. Transport is usually not by air but by ship.
Volumes are still too small
Fruit (processed and unprocessed) and wine are already traded in large quantities between both countries. The biggest problem for organic products is that small farms in particular cannot produce enough volume for export. Combining volumes in one shipment could be a solution, besides acquiring knowledge about organic production and attention for the development of exporting skills. Regarding organic fruit and vegetables, there is no packing company which is focused on exports to Europe at the moment.
Moreover, an effective platform for organic products in South Africa could do much to improve the chain organisation.
There is a great global demand for organic fruit juice, for example, but capacity for pressing the fruit must be hired in through companies with standard presses. This is expensive because these presses have to be completely cleaned after use in order to fulfil the demands of the organic certificate. More pressing capacity for organic juice would be a great improvement because pressing reduces the volume and extends shelf life, reducing the cost of transport to Europe.
‘Black economic empowerment’
The researchers at LEI Wageningen UR see market opportunities in Europe for products which have both organic and Fair Trade certification. In South Africa, companies have to comply with legislation introduced in 2003 concerning ‘black economic empowerment’. This legislation, the BEE Act, lays down requirements which must be met by labour conditions and ownership of the previously disadvantaged population in South Africa. On some points, this legislation is stricter than the Fair Trade legislation; the Fair Trade certificate is thus relatively easy to obtain. Combined with an organic production method, added value is thus created for the product. However, it is essential that legislation is also introduced in South Africa in order to guarantee the ‘organic’ label. Such legislation is expected to be in place in one to two years. Supported by this legislation, and in combination with Fair Trade, the organic trade in South Africa can develop further.
Report 2009-046 Organic produce from the Republic of South Africa; Exploring the conditions for enhancing trade in organic vegetables, fruit and wine