Passport system in a cul-de-sac

Published: 03/11/2023

Agbiz Grain invested heavily and assembled a panel from the United States, United Kingdom, France and South Africa, led by Jannie de Villiers, former CEO of the National Chamber of Milling and Grain SA, to discuss the issue of traceability and challenges of handling and storing bulk grain around the world. During the panel discussion at the 2023 Agbiz Grain and Oilseeds Value Chain Symposium, a generic passport system was referred to. This system is voluntary and not legally enforceable. Similar contractual systems already exist between producers, storage operators, and buyers who share the costs and benefits thereof.
However, stakeholders have different views due to the Competition Act guidelines, such as those relating to buyer power guidelines with respect to producers with a turnover of R35 million and less. This is dangerous ground for stakeholders involved in a sector that may decide to turn customers away on the basis of a mutual horizontal agreement that is not legally enforceable. Also, stakeholders cannot pursue initiatives that potentially interfere with existing agreements and business practices of value chain members and their customers.
Agbiz Grain has responded to the need for a generic passport system by creating the Agbiz Grain Food Safety Conduct, which can be adapted annually at the request of other applicable sectors, within the given legal requirements, and where it has merit. The system has already been implemented. As such, Agbiz Grain recognises the legal obligations that the storage sector must meet without affecting the competitiveness and market access of any stakeholder.
The implementation of a generic passport system is, however, not necessarily supported throughout. To comply with Competition Act requirements (including buyer power guidelines) and issues of traceability, the buyer should provide the passport to the contracted storage operator. This is because the buyer/processor sets the requirements for traceability concerning mycotoxins and MRLs for his product. Grain buyers can contact Agbiz Grain members and communicate their needs individually in order to negotiate a workable system, where it is practically feasible, as there are already some workable examples in South Africa. – Agbiz Grain