The Reasons Of Harmonization Halal Food Trade Economics Essay
There are many reasons that showed the needs of harmonization Halal food standard among ASEAN countries. The standard of getting halal certificate in term of process, storage, logistic among ASEAN is differences. From the point of consumer, difference halal food standard cause the consumer become confuse toward the Halal products they buy. The consumer cannot easily differentiates and recognize the Halal and non-halal food products due to the Halal logo is not standardized between different association bodies among ASEAN country. The problem of different halal standard between different country also cause the consumers become less confident toward the quality of the Halal food product which they had buy. Studies show that the consumers are alert toward the information about the Halal food and any information about the misuse, modification and halal standard can cause the loss of confident of consumer and affect the purchasing decision (Golnaz, 2008). For instance, latest issues occur in Malaysia news whereby the producer keeping the halal food products together with non-halal foods was cause the negative impact such as sales and trade in halal market.
Consumer’s demands are depend on their habit, choices, and lifestyle. In ASEAN, there is high demand toward the halal food product but the products which fulfill the requirement of halal certificate and standard are limited due to the lack of infrastructure and raw material in less developed countries. Although the variety of halal food can increase by importing halal food products but there always has the problem of trade barrier when entering to neighbor country. For instance, the cultural and religion concept of halal food product is strong in Muslim country such as Malaysia and Indonesia cause the requirement of halal food products is very strict follow the Islamic standard while in Singapore the requirement quality of halal food products are not so strict and strong. This might lead to different halal standard requirement by different country and trade barrier can occur to prevent the export and import of the halal food products. Hence, harmonization halal food standard among ASEAN country can applied to fulfill the consumer demand between the Muslim and non-Muslim country by produced a new standard which can be accept by all the country in ASEAN.
In ASEAN, there is not yet having one standard which can be recognized and accepted by all ASEAN members. Halal markets are not similar everywhere in the world. Now, the halal markets are basically been fragmented into three parts such as ethnicity, location, income based on that particular country requirement. Different geographical area and degree of the ethnicity may lead to the differences in halal concepts accepted by Muslims in ASEAN. This result the halal certificate guideline and requirement have difference interpretations by different authorities based on major issues from farm to table and result in the inhibition of trade occurs. Difference certification, association or council body can lead to the disagreements over animals feed, slaughtering methods, packaging, logistics and other arising issues.
Besides that, the problem of without the harmonization halal food standard can cause the lack of transparency among the association, council and authorities among ASEAN country. The exchange of the latest information about the update of the halal food standard between the authorities is hard to been done if the food industries are not alert on it can lead to the rejection occur when the standard does not meet the requirement by the imported countries. This could cause the interferences of the trade occur whereby standard between different country in ASEAN become a trade barrier to prevent the exchange halal products and reduce economic growth toward the exported country as well as food industries.
Problems always occur without harmonization halal food standard. Uncertainty, misunderstanding and lack of experience of local food industries toward the Halal food standard in those particular ASEAN countries in term of method of preparation, processing, storage, certificate and quality assurances can increase the chances of rejection occur after the halal products were checked by the authority on that particular country and cause the loss of profit. Moreover, the halal status now has been extends and shift to whole supply chain. Many producers still do not understand the difference the term of logistic activities and not enough services of halal compliant logistic to be used also link to the rejection of halal food when exported among ASEAN.
Besides that, producers may be confuse whereby they does not know which Halal authority to consult to get their products certified to the correct market because different halal authorities may followed different Islamic rulings in certain cases such as gelatin, food flavouring, mechanical slaughter, stunning of animals and also phosphates. There is a lack of mutual recognition and disconnect between halal certifiers. Halal products should be universal products whereby the quality, safety, packaging and labeling must be able been represented among ASEAN country. Hence, harmonization of halal food standard is the needs by halal market in ASEAN country to produce a single, globally accepted standard.
Moreover, without harmonization, the halal food market will be dominated only by large company in future. This is because without harmonization food producer need to undergo many halal certification examination processes to fulfill the requirement by different country and it may cost a large amount to done all the certification. Hence, reduce the opportunity for small and medium food industries to market their product international trade due to lack of infrastructure and new technology equipment and cause the small and medium industries always cannot be well development. Large competition between the food industries in local market might cause the small and medium industries been isolated and increase the gap difference between them. As a result, the limited halal food products are move to the international stage due to strong fragmented effect which dominated by large company only.
With increase the demand of Halal food in ASEAN, the volume of export and import of halal food transition between the countries are growing which cause the halal market become more important to increase the economic growth. However, without the harmonization of the halal food standard the government is hard to control and make sure the hygiene, safe and quality of the import and export halal food is meet the requirement due to different halal standard among the ASEAN country and lead to the abuse of misuse of halal food standard occur for those unethical authorities or food producer. Due to ethnical issue, government is less control toward the type of Halal standard been used by different authorities certificate. There are no law to control, regulate and standardized the standard been used by the authorities. They have the choice to choose which standard they going to follow. However, harmonization of halal food standard is produced by collect and gain all the agreement of authorities so that it can be accepted in ASEAN. Hence, it can help to facilities the government control to avoid those unethical authorities to do illegal business.
The population is in a steady growing rate and more toward the urbanization whereby the food demand is increasing. At this stage, the developing country is in the situation that economic interdependent whereby economic growth is important to maintain the exchange rate by import and export of the goods. However, problems always occur whereby the standard becomes the trade barrier to prevent import of the goods in and out of the country. Economic growth been decreasing and market business of the local halal producers affected cause them does not have the ability to export large amount of halal food product to fulfill the demand and expectation of local market. Harmonization halal food standard can increase the international trade and facilities the import and export of the goods.
Last but not least, harmonization is important to enhance the cross-border movement of halal of products, halal certificate service and exchange of information among the authorities’ people within ASEAN country. Without harmonization, food halal standard like a standard without global authorities leadership.
Golnaz, R. 2008. Consumers’ confidence in Halal labeled manufactured food in malaysia. PhD thesis, University Putra Malaysia.
