Changes in European dietary habits and increased demand for convenience foods have led to a growing consumption of fresh fruit and vegetables in the EU. Sub-Saharan Africa has capitalised on this trend and horticultural exports soared by 150 percent in value terms between 1989 and 1997. An examination of the value chain linking African growers and exporters with UK importers and supermarkets shows clearly that UK supermarket requirements have transformed the industry in Africa.

Where are vegetables grown? Own/leased land Large Farms Smallholders

An abundance of fresh fruit and vegetables is key to attracting and keeping customers: consumers now demand year-round supplies from around the world. Up to 90 percent of fresh imports from Africa are now sold through the major supermarkets. Supermarket trade has provided African growers and exporters with a new and growing market. But the nature of the business has changed beyond recognition: 20 years ago, the export trade in Kenya consisted of many small exporters who bought produce from many different smallholders. Today, the trade is dominated by large firms growing produce on large-scale farms. The retailers define precisely who should produce what and to what standards.

To stay in business, African firms have to meet exacting standards imposed by supermarkets through ever-tighter monitoring and control procedures within the value chain:

• Frequent and efficient delivery of high-quality produce to supermarkets is essential, requiring sophisticated systems to ensure quality, efficient storage and transport. Nationally, good infrastructure such as roads, airfreight and exporting procedures are equally vital.
• Processing - washing, chopping or peeling - has increased considerably and packaging is far more sophisticated. Both activities have required major investment.
• Suppliers have to meet ever-rising UK environmental and food safety standards and increasingly, ILO labour standards too. Consumer concern and the increased sophistication of processing has led to higher standards.

African producers and exporters to some extent have benefited from the UK supermarket trade. Yet, there is a down side: small producers and exporters are largely excluded from the value chain. The supermarkets and importers rely on a small number of large African exporters who have the capital and management expertise to produce and process high quality and environmentally-sound goods. Supermarkets worry, moreover, that smallholders are unable to meet the high quality and safety standards. In turn, African exporters are wary of using smallholders without assurances from retailers that the produce will be bought.

Successful entry into the market pivots on meeting or exceeding UK standards that are non-negotiable. The policy implications are clear:

• Given that the fresh fruit and vegetable chain is so exclusionary, help for small exporters might focus on entering markets not dominated by large and sophisticated retailers - perhaps in regional markets, such as the Middle East, or the catering industry.
• Excluding smallholder production can only be reversed if quality, consistency and safety standards are met. Donor support for improved crop management, pesticide application and quality control would help small-scale producers reach UK supermarket requirements. Larger exporters could help ensure that effective monitoring and control systems are developed in Africa.

The barriers to gaining access to the UK market have been accentuated by government policies on social and environmental standards. In response to being held to account for the failings of their suppliers, retailers narrow their supply chains down to a few, large select suppliers, a scenario that is unlikely to change in the foreseeable future.

Contributor(s): Catherine Dolan and John Humphrey