Western Cape export fund could help cut food compliance costs

Western Cape export fund could help cut food compliance costs

By Kris van der Bijl

THE South African Fruit and Vegetable Canners Export Council (SAFVCEC) wants the Western Cape’s new export fund to help reduce the cost of overlapping domestic food regulations, proposing a shared compliance system for processors.

Jill Atwood-Palm, the council’s general manager, says food-related safety, quality, environmental and social requirements are administered across multiple government departments and regulatory authorities. That spread of oversight creates “duplication and unnecessary costs for exporters”, she said.

The Western Cape Government launched its Export Global Accelerator Programme (EGAP) Fund on 9 September. It provides grants of R500 000 to R2.5 million to export-enabling intermediary organisations, including export councils, industry associations and business chambers, rather than directly to individual companies.

A shared approach to compliance

Atwood-Palm proposed an integrated food-control framework supported by a digital compliance platform. The framework would address fragmentation in domestic food-control regulation, while the platform would help streamline processes and reduce administrative work.

Exporters must also navigate destination markets’ import regulations, certification requirements and standards. These differ between markets and add to the cost of pursuing overseas opportunities.

“For many processors, the cost of navigating these requirements can deter market entry before commercial opportunities are fully realised,” Atwood-Palm said.

Her proposal focuses on the domestic part of that burden. A shared platform could help processors manage requirements more efficiently, while a more consolidated framework would address how food-control requirements are administered across government authorities.

The EGAP programme lists export-compliance solutions and shared export-support platforms among its eligible activities. A digital compliance platform could fall within those categories, although funding would depend on the proposal meeting the programme’s evaluation criteria.

Why the fund works through industry bodies

EGAP focuses on helping established exporters expand in existing international markets, enter new ones or improve products for global growth. Food and beverages are among its eligible sub-sectors.

Unlike the separate Export Competitiveness Enhancement Programme (ECEP), which accepts applications from both individual businesses and intermediaries, EGAP accepts applications exclusively from export-enabling organisations.

Marthinus van Wyk of the Department of Economic Development and Tourism (DEDAT) said in response to questions from CBN that these organisations could coordinate market expansion for their members, achieve economies of scale and broaden the department’s reach.

For SAFVCEC, a shared compliance initiative would apply that collective approach to a cost that Atwood-Palm says affects processed-fruit exporters. Rather than each business navigating overlapping domestic requirements independently, a sector-wide system could provide common support.

Other barriers to export growth

Atwood-Palm identifies market access as the main challenge for processed-fruit exporters. High import duties relative to those paid by competing suppliers, tariff barriers and complex foreign-market requirements can constrain opportunities.

SAFVCEC also works on market intelligence, technical barriers to trade, participation in trade missions and international exhibitions, and advocacy for improved market access through trade agreements.

A shared domestic compliance system would address the administrative costs associated with food-control requirements. It would not remove import duties or change the regulations imposed by destination markets.

DEDAT plans to collect baseline information on participating companies at the start of each project and compare it with close-out reports over three years. Impact and outcome evaluations will assess the programme’s contribution to the Western Cape’s target of increasing exports from R136 billion in 2020 to R408 billion by 2035.