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New EU Regulation, Impact on Indian Exporters & Mitigating Measures

The third edition of #OrganicWebinars series 'New EU Regulation, Impact on Indian Exporters & Mitigating Measures' gives you very important information how to deal with the New EU Organic Regulation. This time our international experts were Marian Blom, BioNext and Vice President of IFOAM Organics Europe (Netherlands) and Marco Schlüter, Development Manager of Naturland International (Germany). Our Indian experts came from Control Bodies: Sandeep Bhargava, CEO of One Cert India and Narayana Upadhyaya, Founder of Aditi Certifications.

Panel of the third #organicwebinars episode: Marian Blom, Karin Heinze, Sundeep Kamath (moderators), Marco Schlüter, ShivaKumar Venugopal, Director NürnbergMesse India, Sandeep Bhargava, Narayana Upadhyaya, Kamal Bhardwaj, Board NMI.

Importance of the EU Regulation for India (min 12.58 - 28.31)

Marian Blom explained the high relevance of the EU Regulation for the Indian organic industry. There are many export connections between India and the EU, e.g. India ranks second in the export of rice to the EU with an increase of of almost 41% in 2019) - and in general, over all products like oilcakes, tea, spices etc, India ranks seventh. „It is relevant for Indian exporters to know what is going on in the EU organic law“, Marian said.

Chart by IFOAM Organics Europe, Exports from India to the EU

Good news first. There are many rules of the EU Regulation similar to the Indian Regulation NPOP and India has gain equivalence with the EU in the past. But, although the new law is "not a revolution", some important things are changing. For example, there will be a new import system to the EU: instead of the current Regulation in the New Regulation the acceptance of 3rd countries will be part of a trade agreement that has to be negotiated. Priority for the trade agreements will have the US, but there are preliminary talks with India, too, confirms Marian Blom.

Also for group certification new standards has been coming up. A hot topic is that exporter led farmer groups now have to become to farmer led groups. That probably will lead to new costs, also as the sampling rules has become strikter and more detailed. Marian said that potential mitigating measures could be to get an equivalent trade agreement.

Global strategic aspects (min 29.32 - 46)

Marco Schlüter, who is regularly traveling in Asia for his organic mission, explained the strong connection of Naturland with more than 12,000 Indian farmers.

From his view the economic impact of the New EU Regulation for Indian exports will not be at risk. Only risky issues might be the legal interpretations of the new law in each country. Marco showed that new opportunities for the organic sector will arise with the New Organic Regulation as the scope of products broadens. Concerning the Brexit nobody knows exactly what will happen, when England is out of the EU. But fact is, that new rules will appear.

Part 1 of the webinar closed with question and answer round with the panelists (from min 46)

In the question answer round Marian emphasized two issues. IFOAM is somehow disappointed that the Regulation is more or less based on economics but important values along the production process as fairness and social issues are not integrated. She also pointed out that organic agriculture is of course part of the environment and therefor cannot avoid residues at all but the trend goes to pesticide residue free products - that could be a threat in future.

On the question when the impact of the EU Regulation can be felt, Marco commented: first, it would make sense to postpone the coming into force of the Regulation to 2022 instead of 1.1.2021, due to COVID-19 and the fact that organic stakeholder could not prepare very well. On the other hand, if the Regulation will come into force in a few month, exceptions will probably appear.

Video recording of #organicwebinars session 3

The Indian view: "We have to work hard" (min 45.40 - 53.50)

Sandeep Bhargava, CEO of One Cert India, explained that this webinar is in the right time and addresses a very important topic. He mentioned 3 aspects of the new export regime from 2021 onwards: Trade agreements and compliance (1) plus exceptions in different circumstances (2) and a transitional period (3).

As hot topics Sandeep defined the use of 100% organic seed with the derogation terminated by 2035. It is the question if enough quality seeds are available till then. Also the requirement of a risk based inspection with the consequence that low risk operator could be controlled only once in two years. Another big question ist the availability of organic flavors in time.

Identify, manage, mitigate

Sandeep´s list of mitigating measures was long. The emphasized that there is a lot of woork to be done, but of you identfy the problem early you can manage and even mitigate the problem to become one.

New EU Rules: Don´t oversee the opportunities (min 54.55 - 1.08)

Narayana Upadhyaya, Founder of Aditi Certifications, the last speaker of this #organicwebinars gave his special attention to the opportunities of the new organic EU rules. He stated that any changes in the EU Regulation do have impacts and challenges for organic exporters from India, but he discovered quite some good aspects, too. "For example the wider scope of products like silk worm cocoons, salt, flavors, lifestock products are a good chance for all of us", he said.

No doubt, there are challenges, too. As burning subjects Narayana mentioned organic seeds and plant reproductive material. Also the random visits and sampling could cause more costs. Farmers and operators need help from certification bodies to be prepared for farm to shelve tracking, proper documentation and declaration as traceability always ends up in more trust.

For every problem there is a solution, he is convinced and gave a whole list of mitigating measures to cope with the new EU rules. He adds: Digitalization is the need of the hour and the harmonisation of the standards is required. By the way, this will by the topic of #organicwebinars part 4, September 3rd: Emerging trends in Certification in times of pandemic".

Key takeaways (min 1.10.52 - 1.16)

Marian Blom: "Listening to all the presentations, my learnings are that even small changes can have a big impact and that shows the global consequences of European policy." Marian requires the collaboration of the Indian and the EU governments to bring these impacts to manageable good result. The chances and possibilities should really not to be neglected.

Marco Schlüter said, the timing of the webinar was very good because, as the poll shows, many expect a negative impact for the trade of the new EU Regulation. "It is always better to be prepared for an upcoming problem to mitigate the same. And the colleagues from India have shown in the webinar that they are prepared for the proactive way." He is confident that India will manage the New Organic EU Regulation.

Sandeep Bhargava stated that from the Indian perspective the organic stakeholders have to work hard to prepare themselves for the upcoming changes and challenges.

Also Narayana Upadhyaya commented that "interaction with the entire sector that is involved in the value chain is requested and each one has to take the responsibility but also discover the opportunities."

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