New Zealand this month became the first country to sign a Mutual Recognition Arrangement for organic product certification with China. This means organic products with a certification via the MPI Official Organic Assurance Programme (OOAP) are now automatically certified in China - and vice versa. Once the agreement has been implemented - potentially by the middle of 2017 - the organic sector will no longer have to go through the expensive process of bringing Chinese certifiers to New Zealand every three months in order to be able to sell their food in China.
The deal, signed in Beijing on November 14, follows three years of low-key negotiations and a year of intense cooperation involving the Ministry for Primary Industries (MPI), organic producers, and certifiers in both countries. The arrangement covers the export and import of organic foods and ingredients, with the exception of apiculture (beekeeping), aquaculture (fish, seafood and aquatic plants), and textiles.
At least 95% of the ingredients in organic processed products exported under the deal need to have been grown and processed in New Zealand or China, and be certified in accordance with New Zealand’s OOAP or Chinese organic standards.
MPI Manager Food Production and Processing Jacqui Bird says the deal will support the growth of the New Zealand organics sector by providing increased export and import opportunities.
“Exports of certified organic produce to China are currently worth $27 million and are likely to grow due to reduced compliance costs and the increased certainty and facilitation that the arrangement provides New Zealand exporters. A wider range of organic ingredients will also be available for processed food and organic inputs for other producers.”
Rick Carmont, Executive Director of the Organic Exporters Association of NZ believes certification compliance costs for the Chinese market will fall from around $150,000 a year to less than $40,000, and that exports of NZ organic products to China could double within a year of the deal coming into force.
“This is another boost for the organic sector. China has one of the tightest markets in the world in terms of meeting organic standards. Chinese consumers care about organic production and are looking for it [see “Take note: Chinese consumers want more healthy food” below]. But at the moment there is lot of NZ produce going into China that is certified organic in New Zealand but moves to China as non-organic because producers can’t justify the cost of certification.
“I expect to see a big increase in organic dairy products going to China, as this deal will streamline a lot of dairy processes. Under the present regime every dairy farmer has to be visited by a Chinese certifier every year.
“We also export a lot of organic wine, meat and fruit, and this will take a lot of compliance costs out and boost exports.”
The organic industry in China has grown rapidly in recent years, according to one Chinese media report, despite the nation’s economic slowdown. Total sales of organic products reached 60 billion yuan ($12.3 billion) last year, twice as much as in 2013, with the most popular products being dairy, wine, rice and vegetables.
Chinese certifiers will still need to be involved in the organic export process, Rick says, as all Chinese organic products must carry a unique 17-digit barcode and these will need to come from China. But once systems are set up, this should be a relatively straightforward process.
Jacqui Bird says the Chinese deal takes the number of countries with mutual recognition of organic certification to 36, most of them in Europe. The next priority for MPI is to get a similar deal with South Korea and the US.
Some NZ organic producers have expressed concerns about the impact of increased imports on the local sector, and a Beijing news report suggested some Chinese companies’ “controversial practices” had damaged the sector’s credibility.
However, Jacqui says China significantly stepped up enforcement of organic standards in April 2014, and MPI officials reviewed the Chinese organic system in a series of visits over the last year. She says MPI is happy with the country’s technical and administrative standards.
“We’ve done the hard work for importers bringing organic ingredients into NZ, and we believe the Chinese systems stack up. Importers and consumers can be confident organic means organic. Consumers will benefit from a wider range of organic ingredients being available for processed foods, filling a gap for products we don’t produce here. Things like rice, legumes, tea, or rice flour.”
Rick Carmont Says being the first country to sign a mutual recognition agreement for organic product certification with China is “a big tick to the New Zealand food safety system”. He says that in the same way that China signed its first Free Trade Agreement with New Zealand, so we were a small, non-threatening country which could act as a trade model for future agreements.
“And we were hungry for it.”
Over the next few weeks, OANZ will be exploring the impact of the China mutual recognition agreement with our members and the entire sector. Let us know your thoughts and we’ll report back in the December issue of Organic DirectioNZ