Evaluating the cost of compliance to mandatory and voluntary standards in the South African citrus industry
As the world’s second largest citrus exporter, South Africa faced mounting compliance costs in terms of mandatory and voluntary standards. South Africa exported to more than 100 countries, and each country had its own set of standards South Africa must comply with for these citrus exports. Despite being the most stringent when implementing these standards, the EU remained the main export market for South African citrus. Based on this, this research had the following research objectives: One, identify the mandatory and voluntary standards implemented by different regulatory schemes. Two, examine how changes in the EU regulations affected South African citrus exports. Three, determine the costs of the mandatory and voluntary standards. Four, determine the benefits of complying with the mandatory and voluntary standards. Five, determine if there was an overlap between mandatory and voluntary standards. Six, evaluate alternative export markets to which South Africa could export their citrus. The main export markets for South Africa were mainly located in the Northern Hemisphere and ranged from the USA to Russia, with all main markets regulating the following mandatory standards: CBS, FCM, Fruit Flies and cold storage regulations with different implementation stringencies. The EU had the most stringent regulations, with the cold storage regulations being the most stringent. When comparing other export markets' standards to the EU standards, the Eastern regions, such as the Middle East, Asia and Russia, CBS was the standard that the participants found the least difficult to comply with. Global GAP and SIZA, both social and environmental, were the most implemented voluntary standards in the citrus industry. Global GAP became mandatory for exports, where even exporters needed a Global GAP CoC certificate to export. Furthermore, PPECB requires that producers have a valid Global GAP certificate before clearing fruit for exports. Greenhouse Gas Reduction control chapters were the most difficult for participants to comply with for both Global GAP and SIZA. Therefore, industry bodies can investigate how they can help participants make compliance easier. This recommendation can be implemented with working groups between the industry bodies, the standards bodies and participants in the citrus industry. In terms of cost of compliance, as the compliance costs increased by R1 000, the annual income increased by R6 823. Therefore, even if compliance is difficult and a lot of work for producers, it is still in their best financial interest to comply with mandatory and voluntary standards. This will help producers to continue their exports and grow their business.
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