Producers and Exporters of Fresh Fruits and Vegetables from Developing Countries Like Brazil

The compliance process of food quality standards on small farmers of citrus in Brazil

Andrea Cristina Dorr, Marcos Alves dos Reys, Maykell Leite da Costa

Introduction

Producers and exporters of fresh fruits and vegetables from developing countries like Brazil are increasingly required to demonstrate the safety and traceability of their produce up to the consumption stage. Fruit and vegetable sectors are seen as sectors where small producers are able to participate due to their low demand on land and their high labor requirements. However, the concern is that small producers’ participation in the international fruit and vegetable trade could be diminishing as a result of the increasing prevalence of food quality standards in the sector. Implementing certification and entering certified markets have complex impacts on the economic performance of a farm. In developed countries, particularly in the European Union and the United States, demand for higher levels of food safety has led to the implementation of certification programs that address more types of safety-related attributes and impose stricter standards. Certification systems play an important role in any market that is burdened with a high degree of information asymmetry and quality uncertainty. The producers also have to show that they have taken all possible precautions in terms of food and environmental safety along the chain, assured via a certification scheme.

Objectives

General objectives of this research consist of the economic analysis of traceability system and safety measures control in the productive chain of citrus. It also focuses on contracts arrangements’ and how they helped small farmers to participate and meet requirements.

Framework

The theoretical framework used in this paper is the Global Value Chain (GVC) theory. The value chain literature focuses on the role of global buyers and chain governance in defining upgrading opportunities. Upgrading occurs as a result of learning by exporting, the buyer promotion of the capabilities of developing countries producers or by entering value chains with more demanding customers. The knowledge required for upgrading flows downstream through the chain supplied by customers. Value chain analysis is one of the most prominent approaches to analyze changing market structures and to develop suitable strategies for private sector development in developing countries. Several studies based on Global Value Chain theory have been developed.

Expected results

This research aims to contribute for the analysis and inquiry of the occurred institutional changes in the citrus chain of the ECOCITRUS cooperative, located in the Valley of Caí, RS, Brazil (between producers, cooperatives, international buyers) derived of the adoption of the certification in terms of contractual relations, transaction costs, structures of governance, value added and upgrading. The contractual relationships between certified farmers and the international buyer are all based on written contracts. According to the concepts of governance, transactions done directly with international buyers are characterized as a captive type of governance where quasi-hierarchical relationships dominate [buyer defines the product and controls over the suppliers]. The results confirm that the sector is well-coordinated along the chain up to the international buyer. In this study, the evidence on marginalization of small farmers is not found.