Title page for ETD etd-12172009-162950

Document Type Master's Dissertation
Author Breedt, Vicky-Lohanzi
URN etd-12172009-162950
Document Title A farm-level economic impact analysis of food safety and quality systems in the South African mango and litchi industry
Degree MCom
Department Agricultural Economics, Extension and Rural Development
Advisor Name Title
Prof J F Kirsten Supervisor
  • South African mango
  • fresh produce industry
  • litchi producers
Date 2009-09-01
Availability restricted

Food safety is an important aspect of the food industry and has only recently become a major issue within the fresh produce industry. Within highly competitive markets, food safety becomes the critical minimum insurance the consumer requires besides quality. South African mango and litchi producers are also affected by food safety and quality standards. At farm level, South African mango and litchi producers must adhere to food safety and quality standards such as GlobalGAP (formerly EurepGAP) and Nature’s Choice. Food safety and quality systems will not be the only changing factors for South African mango and litchi producers, but market access, supply chain relationships, as well as implementation costs and benefits will also play a critical role through the whole compliance process. South African mango and litchi producers comply with these measures without considering the compliance costs and how compliance will benefit them, or whether it will benefit them at all.

The first objective of this study was to identify the number of producers in the mango and litchi industry that are at least GlobalGAP accredited. The second objective was to evaluate the systems most commonly used in European markets, as well as the food safety systems generally complied with at farm level. It was also necessary to establish what each of the different food safety systems holds for the mango and litchi producer and what markets they will be able to access, both locally and internationally, when they have these systems in place.

The third objective was to quantify the compliance costs for the different producers in both the mango and litchi industries, through the establishment of a cost framework and a related questionnaire in order to compile a summarised cost-grid. Ultimately, the study identified the net additional costs of food safety systems at farm level for mango and litchi producers in South Africa. In this regard, it can be stated that not one scenario is the same. Producers all experience different entry levels from where they start their accreditation process. The one most important fixed cost item is structural upgrading or the development of new structures, and the most significant benefit is continuous market access. All possible benefits experienced at farm level were also identified and the interpersonal relationships of export market agents analysed.

In applying the methodology to estimate the economic impact of a food safety system like GlobalGAP at farm level, it was determined that the larger producers do experience economies of scale and smaller producers do experience more significant cost implications as a result of complying with food safety systems. The initial structural costs not only are the perceived highest costs but they are also the actual highest costs in getting sites and facilities upgraded. Producers do also experience benefits as a result of their compliance. According to producers, their most important perceived benefits are continuous market access and non-exclusion from international markets

The interpersonal relationships between producers and their export agents were also analysed, and it was determined that, trust leads to recurring trade in commodities and builds sustainable long-term relationships. Opportunistic behaviour from export agents will lead producers to terminate exports with that specific exporter or export organisation.

© 2009, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.

Please cite as follows:

Breedt, V 2009, A farm-level economic impact analysis of food safety and quality systems in the South African mango and litchi industry, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-12172009-162950/ >

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