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Impacts of Mycotoxin Regulations on World Trade

Published: April 18, 2006
By: Ms. Lei BAO; Dr. Rudolf KRSKA; Prof. Tetsuhisa GOTO; Mr. Mike ARCINAS; Dr. Alfredo MORALES DIAZ; Lic. Jorge BALDI; Dr. Roland Ernest POMS

Mycotoxins such as Aflatoxins, Ochratoxin A and Fumonisins are health hazards that contaminate a wide variety of crops. Human and animal health can be at risk due to mycotoxin contamination. In order to reduce the risk associated with mycotoxin contamination, regulations and laws are enforced by the respective authorities.

Public health matters are only one aspect of this subject. How do regulations that are different from one country to the next influence the worldwide trade of agricultural commodities? What is the economic impact ? Who benefits, who loses? Many questions occur once we look deeper into this matter. Romer Labs® asked opinion leaders in science and industry to share their view on this topic.

World wide regulation
The last survey of worldwide mycotoxin regulations was published by the FAO (define FAO in this spot) in 2003i. The number of countries setting regulatory limits for mycotoxins in food and feed is rapidly growing. By the end of 2003 it reached a level of approximately 100 countries which regulated Aflatoxin B1 or total Aflatoxins. The trends observed in regards to mycotoxin regulation werei:

• more mycotoxins in more commodities were regulated compared to earlier observations,
• limits remained or tightened,
• regulations became more detailed regarding e.g. sampling or analytical methodology,
• harmonization between countries belonging to economic communities occurred.

Still, the regulatory levels differ widely if we compare major economic communities: e.g. the European level for total aflatoxins in commodities like cereals for human consumption is five times lower than the U.S. level of 20μg/kg.

What are regulatory levels based on?
Many factors influence regulatory levels for mycotoxinsi. The most important factor is the toxicity of a given mycotoxin. But whether the toxic effects are a real threat depends primarily on  the exposure of the population to the toxin - which makes exposure another influential factor. The distribution of the toxin in contaminated crops should be considered as well as the availability of analytical methods to detect and quantify the mycotoxin at the intended regulatory limit.

Existing regulations in countries of trade partners plays a roll as well. An area of concern for regulatory authorities that establish regulatory limits is ensuring that a guaranteed food supply will be available for the population. It does not and would not make sense to protect people from mycotoxin contamination by starving them. In this context a statement given by Kofi Annan, Secretary-General of United Nations, at the 2001 U.N. Conference on the least developed Countries in Brussels illustrates the broad effect of this issue very well: “A World Bank study has calculated that the European Union regulation on aflatoxins costs Africa $670 million each year in exports of cereals, dried fruit, and nuts. And what does it achieve? It may possibly save a life of one citizen of the European Union in every two years […] Surely a more reasonable balance can be found.” iii

Effect of mycotoxin regulation on price, trade and health status
In a paper recently published by Felicia Wuii, the complex effects of regulatory limits for mycotoxins on price, trade, public health, selling and purchasing decisions of nations was presented.

Developed countries face economic losses as a result of mycotoxin regulations. These losses are caused when disposing highly contaminated crops or by lower productivity of animal livestock due to chronic intoxication.

On the other hand the effects on the economy in developing countries are more indirect ones but far more dramatic for the population: The highest quality crop is exported to the developed countries while the lower quality is consumed locally. In combination with the wide spread malnutrition and the lack of health care this can lead to severe acute or chronic intoxication in those populations. But there is also a direct impact on the economy of developing countries: Due to a lack of monitoring at the export points, or – if monitoring is present – a lack of confidence in the existing test management, exported goods get rejected at the importing points of developed countries leading to pricing pressure.

Based on an empirical model developed and published by Felicia Wuiii, the economic impact of different regulation scenarios can be determined.

Two scenarios for the three biggest peanut exporters (US, China, Argentina) were assumed. In the first one, Wu based her calculations on the assumption that the US-Aflatoxin limit of 20μg/kg was adapted world wide, for the second she used the current EU limit of 4μg/kg. The latter resulted in an export loss1 of 450 million dollars annually while adopting the US limit globally would only cause an export shortfall of 92 million dollars annually. Interestingly this model shows a linear relation between mycotoxin regulations and export loss.

Current discussion and efforts of harmonization
There are lively discussions about this issue among different stakeholders and at different occasions. At the recent World Mycotoxin Forum (WMF) in the Netherlands, a panel discussion  was organized where representatives of the USDA, the EU and of various industries debated about mycotoxin hazards and regulations. Not all conclusions of the discussion were new and quite a few points had been published previouslyiv:
According to the Joint FAO/World Health Organization (WHO) Expert Committee on Food Additives (JECFA) which is the scientific body that develops advisory international standards on food additives and contaminants for the Codex Alimentarius Commission, reaching consensus on maximum levels for aflatoxin (and other mycotoxin) standards is complicated by the fact that:

Levels of contamination of foodstuffs vary tremendously around the world, and with respect to trade, the perspectives of delegations differ profoundly. Those representing countries in which  aflatoxin contamination is not prevalent want low standards because they do not wish to see the quality of their food supply degraded. Those delegations from countries in which aflatoxin contamination is a problem because of their climatic conditions naturally wish to have standards in which higher levels of contamination are permitted so that they can sell their products on world markets with greater ease.

Regulatory limits…
One of the questions referred to very low regulatory limits like those in the European Union.
Romer Labs® asked people if they feel that these limits overprotect the EU citizens on the expense of third world countries. Ms Bao Lei, who is working for Qingdao Entry-Exit Inspection and Quarantine Bureau in China, stated that low limits are a problem and cause large uncertainties in the aflatoxin determination. Mr. Baldi, Quality Manager at Louis Dreyfus in Argentina was convinced that: “Mycotoxin regulations can cause the loss of markets which are hard to retrieve because you have to solve a problem which can’t be managed by the company.From my point of view Mycotoxin regulations are another form of protecting a market.” And he added: “In my opinion most of the Mycotoxin issues of imported grain in the EU are a result of inadequate storage measures within the European countries.”

On the other hand Dr. Goto, Professor of Food Safety in Nagano, Japan, said: “Countries have their own historic and social background and have right and duty to protect their people from any kind of problems. However, if their regulation is too strict from the view of international standards, not a view from one strong country, those countries must pay the cost.”

Dr. Roland E. Poms, Secretary General of the International Association for Cereal Science and Technology (ICC) is aware of the fact that “the currently tolerated maximum levels of mycotoxins in crops in the EU are already one of the lowest in the world […]” but also admits that “[…]  there always remains a statistical risk, no matter how low the legal limits might be.”

Finally Dr. Poms referred to the World Bank study and pointed out that “Even one life lost to disease that could be saved is one too many, but at the same time many lives lost to hunger in third world countries that could be saved are far too many.”

Import – Export…
Another inquiry addressed the problem, that shipments sometimes get rejected at import points even though they were tested at the point of export. All experts we contacted agreed that sampling and the lack of good sampling methods are most likely responsible. Dr. Morales from the world’s largest Tortilla producer in Mexico, added “Sampling is such an important matter  that determines the success or failure of a result, the meaning or the meaningless of a series of data. I consider sampling the most underestimated part of the analysis, and the most important one. Heterogeneous distribution of mycotoxins is overcome using appropriate techniques of
sampling. Appropriate tests and methods are now easy to get contacting the right supplier.”

Dr. Poms pointed out that “The main problem for both sampling and analysis is that there is often no consensus on the methodology and the protocols for analytical monitoring and control of crops. Even though there are some relevant ISO, CEN, ICC, AACC… standards for quality and  safety control available, every country has its own legal requirements, which often do not correspond to Harmonised International Standards - if existent at all - and are not always mutually recognized. Even in the Western World these differences exist and often lead to trade disputes between the USA and the EU.”

Mr. Baldi from Louis Dreyfus Argentina agreed with the sampling problem and continued that “… also the insufficient knowledge of regulations when it comes to sales contracts can cause serious problems at the import point.”

Impacts…
Mycotoxin regulations have an increasing impact in all the different areas and businesses the contacted experts work in. But the impacts vary a lot, what is positive for one business is a threat in the other. Prof. Krska, expert in mycotoxin analysis, noted that: “Regulations for mycotoxins have indeed increased the awareness for these secondary metabolites of fungi. As a result the number of activities in determination of mycotoxins, e.g. for standardization of analytical methods, have increased considerably. The number of nationally funded research projects in the area of mycotoxin analysis has gone up which was unfortunately not the case for European Commission funded projects.”

Mr. Mike Arcinas, Quality Control Manager for the Feed Business in San Miguel Foods, Philippines, commented on the positive developments due to the high awareness: “On the positive end, for more than two decades we have been closely following developments in this field, we have seen tremendous improvements in the manner by which the food industry has tackled the mycotoxins issue. Indeed, food products are a lot safer today than ever before. This is the case even for third world countries. The heightened awareness, availability of new
information & technology and the development of quick, easy and cheaper tests have allowed us to effectively manage the potential risks and negative effects of mycotoxin contamination.”
  But as Quality Manager of one of the largest conglomerates of the Philippines he also sees the threats: “The bigger challenge today, I believe, is how less developed countries (like the Philippines), especially those in the “wet” tropics, will be able to cope and participate in world trade, in light of ever tightening regulations. The inherent climactic disadvantage is aggravated by the lack of infrastructure and state support. The Philippines is a unique case, in that, though standards pertinent to mycotoxins for internal and external trade of food commodities approximate those of developed countries, trade regulations are set up in a manner that will ensure the survival of local producers, who for their part, can hardly meet the standards. I believe that ultimately, it is the consumer or end-customer who will dictate what the standards should be. After all, sophistication will not come “free of charge”. For many third world countries, food security and affordability is of the highest priority. Theirs is the question of “having”, not “having the best”.”

Dr. Morales, Mexico summarized: “Of course, the cost impact of analysis, rejects, qualified personnel, etc., is high. However, we consider it as the way of guarantying safety to our costumers in this regard.”

Trade barriers…
Finally, Romer Labs® asked how the problem of trade barriers due to mycotoxin regulation could be solved. Ms. Bao Lei wanted to “encourage the export industry to improve their technique of aflatoxin prevention and management.” She added: “Furthermore, Bio control studies may be another research topic to solve the aflatoxin contamination pre-harvest.”

Prof. Krska was confident that: “The best approach to solve trade barrier is to increase confidence in analytical measurement results. Mycotoxin analysis needs comparability through traceability! This can be achieved by the use of certified reference materials incl. certified standards and calibrants, proficiency testing, accreditation and harmonized procedures as e.g. standardized methods and the compulsory application of recovery factors.”
And Dr. Poms added that a “[…] general agreement on testing procedures and the implementation of (certified)
standard methods and protocols may not solve all trade barriers but at least may ease the problem and improve international trading relations.”

Conclusion
Evidently, this issue is highly complex. Many contrary arguments like consumer protection, free trade, costs but also protection of local markets become important. No easy or rapid solution is in  sight but from the point of view of a mycotoxin testing company it seems obvious to agree with the OECD report „The impact of regulations on Agro-food trade“v where it is mentioned that regulatory limits are not only a hindrance for exporters in developing countries because they can not reach the limits or because their products were not safe. It is mainly because they lack in infrastructure of monitoring, testing and certification. Without this infrastructure they can not demonstrate compliance of their products with the regulation of the importing country.

Consequently, a major leap forward would be to install area-wide testing management, certified by acknowledged bodies. These testing systems must be based on harmonized criteria regarding the major steps in mycotoxin testing like sampling, sample preparation, detection and interpretation of results. E.g. if the same method of detection is used in the harbor of the exporting country and by the authorities of the importing country, if the labs are certified by acknowledged bodies it should be possible to reduce the number of rejected goods together with the costs for shipment or even destruction significantly.

Developing countries are not left alone with the food safety issue. Certain international bodies offer financial and advisory help. E.g.:

Sixth framework programme Priority 5 Food quality and safety – specific support actionvi:
The present SSA proposal aims to implement the outcome of a wide range of European research
projects in the area of mycotoxins and toxigeninc fungi by supporting, stimulating and facilitating the participation and co-operation with countries having signed bilateral scientific and technological co-operation agreement with the EU.

The Special Programme for Food Security (SPFS)vii is FAO's flagship initiative for reaching the goal of halving the number of hungry in the world by 2015. Since 1995, US$770 million from donors and national governments have been invested in FAO-designed food security programmes. The SPFS initiative helps to achieve food security in two ways: through assisting national governments to run focused, well-planned National Food Security Programmes and through working closely with regional economic organizations to develop Regional Programmes for Food Security which optimize regional conditions for attaining food security in areas like trade policy.

The Romer Labs® Interview Partners:

Ms. Lei BAO
Section Head, Chemist, for the Mycotoxin Section under the Food Laboratory of the Qingdao Entry-Exit Inspection and Quarantine Bureau of the People's Republic of China. (CIQ = Center of Inspection & Quarantine).
Main peanut exports from China are exported from Qingdao, Shandong province

ao.Univ.Prof.Dr. Rudolf KRSKA
Head, Center for Analytical Chemistry
Department IFA-Tulln
University of Natural Resources and Applied Life Sciences, Vienna

Prof. Tetsuhisa GOTO
Professor of Food Safety at Shinshu University, Nagano, Japan.
Dr. Goto is well known for his research on Mycotoxins

Mr Mike ARCINAS
Quality Control Manager for the Feed Business in San Miguel Foods,Inc.
San Miguel is one of the largest conglomerates in the Philippines
dealing in highly diversified business.

Dr. Alfredo MORALES DIAZ
Central Lab Manager
GRUMA Mexico
World largest Tortilla producer

Lic. Jorge BALDI
Chief Quality Control Manager
Louis Dreyfus Argentina
One of the world largest commodity trading companies with gobal
sales per year of more than 20 billion USD.

Dr. Roland Ernest POMS
General Secretary
International Association for Cereal Science and Technology (ICC)
“ICC will be the pre-eminent international association in the field of cereal science and technology committed to the international cooperation through disseminating information and developing standard methods for the well-being of all people.” viii

1 “A nation’s total export loss of a particular food crop, given a particular internationally imposed
mycotoxin standard, can be calculated as the product of the price of the food crop per unit volume on the
world market, the total volume of that crop exported by a particular nation, and the fraction of that nation’s
food export crop that is rejected as a result of a worldwide mycotoxin standard.”


i Worldwide regulations for mycotoxins in food and feed in 2003; FAO Food and Nutrition Paper No. 81;
2004

ii Wu, F. “Mycotoxin Risk Assessment for the Purpose of Setting International Regulatory Standards”;
Environmental Science & Technology Vol. 48 No. 15; 2004

iv Dohlman, E. “Mycotoxin Hazards and Regulations: Impacts on Food and Animal Feed Crop
Trade,” chapter 6 in International Trade and Food Safety: Economic Theory and Case Studies. J. Buzby
(ed.). USDA, Econ. Res. Serv., AER-828, Nov. 2003. www.ers.usda.gov/publications/aer828/

v The impact of regulations on Agro-food trade; 2003 OECD, Paris, 2003

vi http://mycoglobe.ispa.cnr.it

vii http://www.fao.org/spfs

viii http://www.icc.or.at

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Helio Cabral Jr
Helio Cabral Jr
20 de abril de 2006
Há uns poucos anos atrás o Brasil enfrentou um sério problema de ordem interna com altos níveis de aflatoxina no amendoím. O problema foi basicamente controlado melhorando-se as técnicas de cultivo e manejo, e principalmente no manejo pós colheita. Hoje não é mais um problema sanitário e de risco à saúde animal e humana. Cordialmente, Helio Cabral Jr Translation: A few years ago, Brazil faced a serious internal problem with high levels of aflatoxins in peanut. The problem was basically controlled by improving the techniques of crop growing and management, mostly the post-harvesting management. Today it is not a risky problem for human and animal health anymore. Cordially, Helio Cabral Jr
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