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The European Union, USA, Canada, and Japan are promising markets for exporters of agricultural commodities from developing countries. These regions have trade preference agreements that allow duty-free or low-duty imports from certain developing countries. However, the requirements for the quality and traceability of agricultural commodities are high. This document provides recommendations for agribusiness firms in developing countries to successfully export their agricultural commodities to these markets.

Recommendations

1. Quality Assurance

Implement stringent quality control measures to ensure that the commodities meet the high-quality standards required by these markets. This could involve investing in modern farming techniques and technologies.

Below are some detailed case studies and experiences learned on quality assurance for some agricultural commodities:

Soybean

A study on the soybean supply chain in the state of Pará, Brazil, used Life Cycle Assessment to evaluate the environmental impacts associated with soybean production. The study highlighted the importance of efficient business transactions and soybean tracking for quality assurance. Another resource, the “Manual of Soy Quality Analyses for Soybean Products in the Feed Industry”, provides up-to-date, reliable, and easy-to-search information to quality control laboratories, universities, research centers, animal and human nutritionists, soybean traders, and organizations and individuals with an interest in the quality analysis of soybean products.

Sorghum

A study on global sorghum production analyzed the current status of sorghum production, trends, and factors controlling sorghum yield using empirical approaches. The study highlighted the importance of adequate use of fertilizers and technology adoption, efficient management, and better agronomic practices for boosting sorghum yield and ensuring its sustainability in a warmer climate. Another study on India’s rainfed sorghum improvement over three decades assessed the efficiency of past achievements in genetic yield potential to facilitate future genetic improvement. The study revealed that sorghum varieties bred with diverse genetic backgrounds, such as landraces, and with tolerance to pests and diseases had stable yield performance.

Cassava

A case study on small-scale flash-dryer reengineering for cassava processing in Costa Rica discussed the importance of traceability in the cassava supply chain. The study emphasized that accurate identification of the varieties of cassava grown by farmers will improve its management and production and facilitate tracking and replacing specific varieties. Another case study involving two food industries in Ghana developed an appropriate quality assurance system for two popular cassava-based convenience foods, fufu and kokonte flour. The study established critical control points with accompanying critical limits, monitoring procedures, corrective actions, verification procedures, record keeping, and documentation procedures based on the HACCP principle.

These case studies highlight the importance of quality assurance in agricultural supply chains and the innovative solutions being used to enhance it. They also underscore the challenges that need to be addressed to ensure effective quality assurance.

2. Traceability

Establish robust systems for tracking the journey of the commodities from the farm to the market. This will enhance transparency and trust with the importers.

Below are some case studies and experiences learned on traceability for some agricultural commodities:

Soybean

Blockchain technology has been used to enhance traceability in the soybean supply chain. A study proposed an approach that leverages the Ethereum blockchain and smart contracts to efficiently perform business transactions for soybean tracking and traceability across the agricultural supply chain. This solution eliminates the need for trusted centralized authorities and intermediaries and provides transaction records, enhancing efficiency and safety with high integrity, reliability, and security.

Sorghum

A study on global sorghum production analyzed the current status of sorghum production, trends, and factors controlling sorghum yield using empirical approaches. Especially in sub-Saharan Africa, this crop is cultivated widely under unfavorable climate conditions and sub-optimal input levels. The study highlighted the importance of adequate use of fertilizers and technology adoption, efficient management, and better agronomic practices for boosting sorghum yield and ensuring its sustainability under a warmer climate.

Cassava

A study on cassava exporters from Costa Rica discussed the importance of traceability in the cassava supply chain. As growing emphasis is placed on quality at all levels and on traceability and the preservation of the identity of varieties, accurate identification of the varieties of cassava grown by farmers will improve its management and production and facilitate tracking and replacing specific varieties.

Cocoa

A series of case studies co-developed by IDH, The Sustainable Trade Initiative, the Belgian Initiative Beyond Chocolate Partnership, the Swiss Platform for Sustainable Cocoa (SWISSCO), the Dutch Initiative on Sustainable Cocoa (DISCO) and the German Initiative on Sustainable Cocoa (GISCO) explored in more detail how companies and standard setting organizations are implementing traceability in their operations. These studies provide valuable insights into the role of specific cocoa supply chain actors in the context of traceability.

These case studies highlight the importance of traceability in agricultural supply chains and the innovative solutions being used to enhance it. They also underscore the challenges that need to be addressed to ensure effective traceability.

3. Leverage Trade Agreements

Understand the specifics of the trade agreements that your country has with the European Union, USA, Canada, and Japan to take full advantage of them. This may require seeking advice from trade experts or legal advisors.

Below is information on the trade agreements between the European Union, USA, Canada, and Japan with some developing countries:

European Union and Cambodia

The EU works closely with Cambodia under the framework of the EU-ASEAN Cooperation Agreement. Cambodia benefits from the European Union's Everything But Arms scheme, which grants unilateral duty-free, quota-free access for all exports except arms and ammunition. In 2022, total trade in goods between the EU and Cambodia equaled €6.3 billion.

USA and Cambodia

The United States and Cambodia concluded a Bilateral Trade Agreement (BTA) in 2000. The BTA provides a forum to address bilateral trade issues and allows Cambodia and the United States to coordinate on regional and multilateral issues.

Canada and Cambodia

Canada is one of Cambodia’s top export destinations, and bilateral merchandise trade has grown from $1.8 billion in 2021 to $2.4 billion in 2022. Cambodia benefits from Canada’s Market Access Initiative for least developed countries, which allows qualifying states quota-free and duty-free access to the Canadian market.

Japan and Cambodia

Japan and Cambodia have an Economic Partnership Agreement (EPA) which strengthens the mutually beneficial economic collaboration between the two countries by facilitating freer flows of goods, services, and investments.

European Union and Vietnam

The EU-Vietnam Free Trade Agreement (EVFTA) eliminates or reduces tariffs on many key goods like electronics, food products, and pharmaceuticals. Between 2020 and 2021, EU-Vietnam agri-food trade grew by 9%, reaching €3.5 billion in total.

Canada and Vietnam

Vietnam is Canada’s largest trading partner in ASEAN. In 2022, two-way merchandise trade between Canada and Vietnam totaled $13.8 billion. Vietnam benefits from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which provides a rules-based trading environment and enhances market access for Canadian exporters.

Japan and Vietnam

Japan and Vietnam have an Economic Partnership Agreement (EPA) which strengthens the mutually beneficial economic collaboration between the two countries by facilitating freer flows of goods, services, and investments.

USA and Nigeria

In 2021, the two-way trade in goods between the United States and Nigeria totaled over $7 billion. U.S. exports to Nigeria include wheat, vehicles, machinery, kerosene, lubricating oils, jet fuel, civilian aircraft, and plastics.

European Union and Nigeria

The Economic Partnership Agreements (EPAs) between the EU and African, Caribbean and Pacific countries (ACP) aim to support West Africa's investment, industrialization, and diversification objectives. However, Nigeria has not signed an EPA due to concerns about its impact on local farmers and manufacturers.

Canada and Nigeria

In 2022, two-way merchandise trade between Canada and Nigeria totaled $13.8 billion.

European Union (EU) and Senegal

Senegal is part of several trade agreements, including the Economic Community of West African States (ECOWAS) and the World Trade Organization. It's also eligible for U.S. market access benefits under the African Growth and Opportunity Act (AGOA). Negotiations are ongoing for an Economic Partnership Agreement between the EU and several West African countries, including Senegal.

USA and Senegal

Senegal is eligible for U.S. market access benefits under AGOA. The main imports from the USA are feed grains (corn) and consumer-oriented products.

Canada and Senegal

In 2022, two-way merchandise trade between Canada and Senegal reached over $197 million. The main Canadian exports included cereals, vehicles and parts, machinery, textiles, and beverages.

EU and Ghana

Ghana has a bilateral Economic Partnership Agreement (EPA) with the EU.

USA and Ghana

Ghana has a Trade and Investment Framework Agreement (TIFA) with the USA. Many Ghanaian exports to the USA benefit from duty-free tariff preferences under AGOA and the Generalized System of Preferences (GSP) program.

Canada and Ghana

In 2021, two-way merchandise trade between Canada and Ghana reached over $475 million. The main Canadian exports included cereals, vehicles and parts, machinery, textiles, and beverages.

EU and Congo RDC

The EU’s contribution to consolidation in the Democratic Republic of the Congo (DRC) is based on strong support for political, economic, and commercial development in the country under the Cotonou Agreement.

USA and Congo RDC

The DRC has a Bilateral Investment Treaty (BIT) with the USA. It's also a member of the Common Market for Eastern and Southern Africa (COMESA), with which the USA has a TIFA.

Please note that the specifics of these agreements can change over time and it's always a good idea to check the most recent sources for the most accurate information.

4. Market Research

Conduct thorough market research to understand the preferences and needs of consumers in these markets. This will help in tailoring your products to meet their specific demands.

5. Partnerships

Consider forming partnerships with local businesses in these markets. They can provide valuable insights into the market dynamics and consumer behavior.

6. Certifications

Obtain international certifications for your commodities. Certifications like Organic, Fairtrade, and Rainforest Alliance can make your products more appealing to consumers in these markets.

Conclusion

While the European Union, USA, Canada, and Japan present significant opportunities for agribusiness firms in developing countries, it is crucial to meet their high standards for quality and traceability. By implementing these recommendations, agribusiness firms can enhance their competitiveness and successfully penetrate these markets. Remember, the key to success in international trade lies in understanding the market dynamics, meeting the required standards, and continuously striving for excellence.

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