 
  WORLD TRADE  
ORGANIZATION  G/SPS/GEN/470 
8 March 2004 
 (04-1009) 
Committee on Sanitary a nd Phytosanitary Measures Original:   English 
  
 
SPS AND DEVELOPING COUNTRIES 
 
COMMENTS ON GERMAN PROPOSAL TO LIMIT OCHRATOXIN A (OTA) IN COFFEE 
PRODUCTS  
 
Submission by Papua New Guinea
 
   The following communication, dated 3 March 2004, is being circulated at the request of the 
Delegation of Papua New Guinea. 
 
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 A. I
NTRODUCTION  
1. Papua New Guinea faces two major problems w ith respect to sanitary and phytosanitary 
measures.  On the one hand, it is difficult to comp ly with existing SPS requirements imposed by trade 
partners because of scarcity of adequate testing a nd certification facilities, as well as lack of expertise 
and financial resources to devote to  quarantine matters.  On the other hand, the limited administrative 
capacity together with current development prio rities of the Government focusing on health, 
development and infrastructure make it impossible to cope with the flood of  notifications submitted 
by trade partners on proposals of new SPS measures .  As a result, Papua New Guinea often loses the 
opportunity to comment on proposed notifi cations within the allowed timeframe. 
2. Despite resources constraints and lack of pe rmanent representation in Geneva, Papua New 
Guinea is committed to improve its use of the SPS Ag reement in order to gain better market access 
conditions abroad.  Therefore, Pa pua New Guinea intends to be mo re proactive at the SPS Committee, 
by raising any specific trade problem related to implementation of the Agreement by other Members 
and by submitting proposals on current negotiations.  
3. With this communication, Papua New Guinea wishes to provide comments to the proposed 
"Ordinance amending the ordinance laying down maxi mum levels for mycotoxins in foodstuffs and 
the ordinance of dietetic foodstuffs" presented by Germany on 17 June 2003 (G/SPS/N/DEU/9), 
which was scheduled to be adopted in December  2003.  The delay in submitting comments, despite 
the coffee industry being one of the most develope d in the country, exemplifies Papua New Guinea's 
difficulties in terms of SPS measures imposed by trade partners. 
B. THE COFFEE INDUSTRY IN PAPUA NEW GUINEA  
4. The coffee industry is very important for the Papua New Guinea economy, accounting for 
about 25 per cent of all agricultural exports.  Involve d stakeholders include:  15 exporters;  about a 
hundred small enterprises providing dry processing;  a similar number of enterprises providing grind 
processing;  approximately 245,000 small holde r coffee growing households.  The industry 
contributes five per cent of GDP and is the source of paid employment for more than 30,000 people G/SPS/GEN/470 
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 and cash income for two million considering farmer s' families.  The importance of coffee for the 
employment and livelihood in the rural areas of  Papua New Guinea is confirmed by production 
figures:  only ten per cent of coffee is produced in plantations, and 90 per cent is the output of small 
farmers operating at the village level. 
5. Given its importance for the whole economy and its relative competitiveness in international 
markets, the coffee industry is one of the more de veloped and advanced in Papua New Guinea, and as 
such is one of the few examples in the country where Government regulating agencies and business 
associations can provide health certification fac ilities as well as research and development activities 
up to world level standard. 
6. Papua New Guinea's coffee industry regulator, th e Coffee Industry Corporation, maintains a 
comprehensive system of quality assessment and control over green coffee for export, and has been 
conscious for some years of the increasing level of concern in Europe regarding the possible presence 
of toxic levels of OTA within the average European's daily diet. 
7. Since 1996, the Coffee Industry Corporation has been working towards the elimination of 
mouldy beans in export coffee and has developed si gnificantly improved controls, including chemical 
analysis capability and pre-shipment inspection.  As a result, there have not been any reported 
instances of OTA being found in shipments of coff ee from Papua New Guinea, and it is expected that 
also in the future the level of OTA contaminati on will fall well below the new limits set out in the 
German proposal. 
C. T
HE NEED TO SAFEGUARD SMALL FARMERS  
8. Despite the low levels of OTA in national production of coffee, Papua New Guinea would 
like to express concern over the proposed new regul ation and, without entering the debate with 
technical details, to support the views emphasized by Colombia and other WTO Members from Latin America on two main grounds:  suggested OTA lim its appear discriminatory against coffee if 
compared to limits being proposed for other products  like wine and beer (which are produced within 
the European Communities);  there seems to be  no consensus among the international scientific 
community on the actual degree of serious health risk  posed by OTA, and this contradictory evidence 
should not be enough to justify trade restrictive measures at this stage. 
9. Alongside possible discrimination and insuffici ent evidence, Papua New Guinea wishes to 
emphasize a more genera l problem arising from SPS measures of the kind proposed by Germany 
which applies to coffee as well as other commoditi es from developing countries.  Any additional SPS 
requirement imposed on the international coffee indus try is going to create additional costs, and the 
history of the coffee market shows that any cost w ill eventually impact on the price received by small 
farmers at the initial stage of the production chain.  This is going to be the same for the new OTA 
limits:  they will increase certification costs for the buyers and importers in Germany, which will pass 
it on to exporters from producing countries, which in turn will share the new burden with small farmers.  The negative impact on farmers would be multiplied if the entire European Communities 
adopted the German proposal on further restrictive measures. 
10. Small producers from developing countries already receive a derisory share of the value of 
wholesale packaged coffee in developed markets (from 40 per cent in the late seventies to ten per cent 
in the nineties).  Moreover, international prices are at historical low levels, whereas inputs, finance, 
shipping and insurance costs continually increase.  In  this crisis scenario, those who suffer the most 
are the small producers, facing also the economic and bargaining power of five trans-national 
corporations dominating world coffee markets.  G/SPS/GEN/470 
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 11. This disgraceful state of affairs needs no aggr avation.  But health authorities from countries 
like Germany, while imposing new regulations , are imposing new testing and certification 
requirements, ultimately affecting the earning capacity  of small farmers in the developing world.  All 
WTO Members, and especially developed countries, s hould consider that the small producers' interest 
and their equity within the totality of the transf er from a remote, third-wo rld coffee garden to the 
breakfast-table of wealthy first-world consumers must be safeguarded with as much energy as is 
applied to the well-being of the consumer of co ffee at the other end of the transaction chain. 
12. The above observations show that even for count ries so far considered nearly "OTA-free" the 
imposition of new limits are likely to increase costs of production through new testing and certification requirements.  In countries like Papua New Guinea, where up to 90 per cent of harvested 
coffee comes from subsistence farmers, the negative im pact is going to be larger.  Therefore Papua 
New Guinea is requesting German and European aut horities to take into account the special needs of 
coffee-producing developing countries, and especially  of the small and vulnerable among them.  
Possible options would include providing to such count ries in need free-of-cost technical assistance in 
order to comply with the new regulations, and gr anting longer implementation periods for meeting the 
new requirements. 
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