"EU Green Deal presents new opportunities, threats and risks for South African growers"

The European Union is seeking to compel other countries, including South Africa, to adhere to new regulations if they want to continue to access its lucrative market. This raises questions about the capacity and potential for South Africa to adapt, as well as the risks and opportunities that the regulations present for future access to the European market. In its 2030 climate target plan, the EU aims to reduce greenhouse gas emissions by 55% from 1990 levels.

To that end, the EU has crafted the “Farm to Fork strategy”. Launched in 2020, it is a new approach that ensures that agriculture, fisheries, and the entire food system effectively contributes to achieving the target. The strategy is at the core of a broader initiative, the European Green Deal. Its aim is to reduce the environmental and carbon footprint in the way food is produced and consumed.

South African producers – as well as those in Mozambique and the rest of the Southern African Customs Union – may face several challenges. These include:

  • Regulatory and policy uncertainty: It might take some time for regulators and food-system actors to align their policy, regulations, and business decisions to the emerging requirements of the food system. Policy cycles and political processes can impose a lag-time of anywhere between three and five years. This is likely to lead to a transition phase of regulatory and policy uncertainty.
  • High costs of compliance: Over the years, South African agribusinesses have had to conform to stringent EU regulatory standards. There has also been an ever-increasing set of private standards. These range from traceability to exposure to allergens to good farming practices and child labour, to name just a few. It also includes various kinds of certification.
  • Resource-poor farming households can seldom afford such high costs of adopting new regulations and certifications. Without financial support, most smallholder farmers will inevitably be excluded from participating in export markets.

Potential growth points
One area in which there may be room for South Africa to grow market share is in genetically modified (GM) foods. South Africa produces some GM crops, but the EU currently has very tight restrictions on GM imports. However, it is currently reviewing its GM regulations, as it has released a study confirming that products developed from new genomic techniques have the potential to contribute to sustainable agri-food systems in line with the objectives of the European Green Deal and Farm to Fork Strategy.

A change in its policy could open up new export avenues for South Africa. Another area of growth is in high value organically produced food. South Africa has existing commercially driven export value chains that already conform to emerging rules in this sector. However, these foods are still targeted at niche markets in the EU, but the Farm to Fork Strategy seeks to make them mainstream. This can be an opportunity for South Africa if farmers begin to produce higher volumes at relatively competitive prices.

Read the complete article at www.dailymaverick.co.za.

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