Better market access, transport subsidies and a global zero-VAT strategy for fruit and vegetables are among his proposals
The global fresh produce industries have united to call for urgent action from regional public authorities and multilateral bodies such as the WTO, FAO, UNCTAD, OECD and others as the global chain crisis supply gets worse.
The Global Fresh Produce Coalition, which includes Freshfel, SHAFFE, the International Fresh Produce Association, Copa-Cogeca, ColeACP, Afruibana and the China Chamber of Commerce, said significant increases in logistics costs, inputs such that fertilizers, packaging materials and energy, and a general shortage of labor are jeopardizing the economic viability of the fresh produce industry globally.
“While the sector has demonstrated its resilience over the past two years of the Covid pandemic, the current challenges in the global supply chain have resulted in cascading negative effects for all parts of the industry,” a- he said in a statement.
“The industry has seen cost increases in several areas including: 150-400% container prices, 20% trucking, up to 80% air freight, up to 100% fertilizer costs and up to 100% in wooden pallet prices.
Southern hemisphere producers estimate costs will increase by US$3.8 billion in 2022 due to higher container prices.
In Europe, producers and traders said they face a total cost increase of €10 billion for this year cumulated by all the challenges along the supply chain, plus an additional €4 billion for additional logistics costs.
The North American fresh produce industry reports container prices have soared to US$25,000, a “massive” increase from pre-pandemic costs of around US$3,000.
Elsewhere, over 86% of ColeACP members fear their economic viability will be affected by the current logistical disruptions and over 70% said they were considering implementing business changes.
“In light of the above, the Global Fresh Produce Coalition urges key stakeholders and public authorities to undertake urgent solutions to stabilize the sector in times of crisis,” the statement read.
The group identified several potential mechanisms to safeguard the short-term economic viability and sustainability of the sector:
- · Increased attention and recognition of fruit and vegetables as a “strategic good” that contributes significantly to the long-term sustainability of the planet and to public health policies.
- · The creation of stabilization mechanisms to improve the accessibility of fresh produce, to ensure that fruit and vegetables can continue to be available to all.
- · The introduction of transport subsidies for fruit and vegetable producers and exporters aimed at mitigating the immediate impact of inflated price distortions in the sea freight market.
- · Introduction of a global zero VAT strategy for fruit and vegetables that would directly benefit producers, exporters and consumers.
- · Improved access to major export markets through reduced tariffs and quotas.
- Avoid aggressive promotional price reductions made available to end consumers that undermine the value of fresh produce and ultimately reduce already stretched margins for producers and exporters.
- · More investment in public promotions to increase consumption of fresh fruits and vegetables during the southern hemisphere off-season.
The Global Fresh Produce Coalition said it is committed to continuing its work on sector-specific solutions – both together and within its respective regional contexts. But he warned that these problems can only be solved through public-private collaboration, “in which we aim to be a constructive and proactive partner”.