Economics of compliance with international food standards in tanzania: the case of organic spice

The fall in the agricultural sector’s contribution to Tanzanian export earnings since the early 1990s has increased attention toward new crops with the potential of supplementing the country’s traditional export crops. Particular attention has been focused upon identifying crops enjoying price stability, high demand elasticity and low substitutability. Spices fall into this category. However, access to high value export markets raises issues of supply chain dynamics and conformity with international standards. This study focuses upon the recent history of the spice industry in Tanzania with reference to these issues. It also explores existing standards conformity assessment capacity and quantifies the costs and benefits of complying with the certified organic standard for members of black pepper and chilli contract farming schemes in two districts in Tanzania. The latter is based on survey data from 2006-07 based on samples of scheme members and control groups. High value markets like the EU are concerned with food safety. In addition. organically-traded exports must be certified as such. For food safety the main tests demanded are for hazards like aflatoxins, pesticide residues, prohibited chemical dyes, heavy metals, as well as for Salmonella. Conformity assessment for these parameters entails investments in high performance liquid chromatograph, gas chromatograph, and atomic absorption spectrophotometer equipment, as well as other state-of -the-art laboratory facilities. Local conformity assessment in relation to these standards has been found to be deficient in many ways. The benefits of certified organic farming include guaranteed produce market, premium prices, higher net revenues and increased yield. Expected benefis were not realized by certified organic farmers. This is the result of absent price premiums, low level of adoption of recommended organic practices, and wider contract failure. The main conclusions are that Certified Organic standards are the only international standards complied with, and that a very loosely coordinated chain exists alongside a more coordinated one. Macro- and micro-institutional weaknesses need iii attention for tapping the full potential of the industry. Meeting challenges of international national food safety policy are recommended for improving local conformity assessment better organized exporters and design of more effective contracts are recommended for realizing organic farming benefits.