Improved market access, transport subsidies and a global zero-VAT strategy for fruit and vegetables are among its proposals
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 global supply chain crisis worsens.
The Global Coalition for Fresh Produce, which comprises Freshfel, SHAFFE, the International Fresh Produce Association, Copa-Cogeca, ColeACP, Afruibana and the China Chamber of Commerce, said significant hikes of costs for logistics, inputs such as fertilisers, packaging materials and energy, and an overall shortage of labour are jeopardising the economic viability of the fresh produce industry globally.
“While the sector demonstrated its resilience during the past two years of the Covid pandemic, the current global supply chain challenges have been leading to cascading negative effects for all parts of the industry,” it said in a statement.
“The sector has experienced increased costs in multiple areas including: 150-400 per cent in container prices, 20 per cent in truck transportation, up to 80 per cent in airfreight, up to 100 per cent in fertiliser costs and up to 100 per cent in wood pallets prices.”
Southern Hemisphere producers estimate that costs will rise by US$3.8bn in 2022 as a result of higher container prices.
In Europe, growers and traders said they face a total cost increase of €10bn for this year cumulated by all challenges along the supply chain, plus an extra €4bn for additional logistical costs.
The North American fresh produce industry reports that container prices have been climbing up as high as US$25,000, a “massive” increase over pre-pandemic costs of around US$3,000.
Elsewhere, more than 86 per cent of ColeACP members are concerned that their economic viability is impacted by the current logistic disruptions and more than 70 per cent said they are considering the implementation of business changes.
“In light of the above, the Global Coalition for Fresh Produce urges key stakeholders and public authorities to undertake urgent solutions to stabilise the sector in a period of crisis,” the statement said.
The group has set out several potential mechanisms to preserve the short-term economic viability and sustainability of the sector:
- · Increased attention and recognition of fruits and vegetables as a “strategic good” that have a significant contribution to long-term sustainability of the planet and public health policies.
- · The creation of stabilisation mechanisms to improve accessibility of fresh produce, to ensure that fruits and vegetables can be continued to be available to everyone.
- · The introduction of transport subsidies for fruit and vegetable growers and exporters aimed at alleviating the immediate impact of inflated price distortions in the sea freight market.
- · Introduction of a global zero-VAT strategy for fruits and vegetables that would directly benefit producers, exporters and consumers.
- · Greater access to key export markets through the reduction of tariffs and quotas.
- · Avoiding aggressive promotional price discounts made available to end consumers that undermine the value of fresh produce and ultimately reduce already stretched margins for growers and exporters.
- · More investment in public promotions aimed at increasing the consumption of fresh fruits and vegetables during the Southern Hemisphere counter-season.
The Global Coalition of Fresh Produce said it was committed to continuing work on sector-based solutions – both together as well as in its respective regional contexts. But it warned that these issues can only be tackled by public-private collaboration, “in which we are aiming to be a constructive and proactive partn
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