Global Fresh Produce Industry Coalition calls for declaring F&V as a strategic good in the current supply chain and cost crisis

The global fresh produce industries are uniting to call on national and regional public authorities and multilateral bodies, such as the WTO, FAO, UNCTAD, OECD and others, to respond urgently to the significant increases current costs of logistics, inputs such as fertilizers, packaging materials and energy, and a general labor shortage that jeopardizes the economic viability of the fresh produce industry in the global scale.

With a total production of 1.6 billion T (2019)[1], the sector estimates that approximately 50% of fresh produce is consumed locally and 50% is intended for trade. The global fruit and vegetable trade stood at a market value of USD 220 billion in 2020.[2] With more than 200 origins and 200 destinations, the global agricultural products industry is a sector that operates with high fragmentation, the mix of small, medium and large producers and a complex national and global supply chain, to maintain the food safety and product quality.

While the sector has demonstrated its resilience over the past two years of the COVID pandemic, current global supply chain challenges have resulted in cascading negative effects for all parts of the industry. The sector has seen cost increases in several areas including: 150-400% in container prices, 20% in trucking up to 80% in air freight, up to 100% in, up to 100% in the cost of fertilizers and up to 100% in the price of wooden pallets. At the regional level, the economic burden of maritime logistics can be summarized as follows:

  • Southern Hemisphere producers estimate a $3.8 billion cost increase from container prices increasing by about 150% for 2022.
  • European producers and traders estimate a total cost increase of €10 billion for 2022 cumulated by all challenges along the supply chain plus €4 billion for additional logistics costs (domestic, intra-EU, export, import )
  • North American fresh produce industry reports container prices soared to $25,000, a massive increase from pre-pandemic costs of around $3,000
  • Over 86% of ColeACP members are concerned that their economic viability will be impacted by the current logistical disruptions and over 70% are considering implementing business changes

In view 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. To this end, we have identified potential mechanisms to safeguard the short-term economic viability and sustainability of the sector, including the following concrete proposals:

  • Increase attention and recognition of fruits and vegetables as a “strategic good” that contributes significantly to the long-term sustainability of the planet and to public health policies.
  • Create stabilization mechanisms to improve the accessibility of fresh produce, to ensure that fruits and vegetables can continue to be available to all.
  • Balancing the distorted ocean freight environment that has seen significant change, with carriers setting record rates and profits through the vertical integration of major shipping lines that have tightened their control of existing supply chains.
  • Introduce transport subsidies for fruit and vegetable producers and exporters aimed at mitigating the immediate impact of inflated price distortions in the sea freight market.
  • Promote a global zero VAT strategy for fruit and vegetables that would directly benefit producers, exporters and consumers.

“Facilitate better access to major export markets through various mechanisms that do not lead to unfair market distortions, including the reduction of import duties and quotas, among others”

  • Avoid 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.
  • Strengthen public promotional investments aimed at increasing recognition and, ultimately, consumption of fresh fruits and vegetables during the southern hemisphere off-season.

The Global Fresh Produce Coalition is committed to continuing its work on sector-specific solutions – both together and within its respective regional contexts. However, these complex issues with dramatic consequences can only be addressed through public-private collaboration, in which we aim to be a constructive and proactive partner.

[1] FAOSTAT – World production

[2] TRADEMAP – Global Exports

The “Global Fresh Produce Coalition” is a united approach of international fruit and vegetable associations led by their vision to work together for resilient global fruit and vegetable value chains that enable economic, environmental and societal benefits”. The coalition’s mission is to articulate solutions to disruptions in the global supply chain for the production and trade of fresh produce (increasing costs), which have raised significant concerns about the sector’s business model and its ability to provide cost-effective fresh fruits and vegetables to support the diet. safety and health.

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