On 6 April 2012, a substantial increase in fees and charges was introduced for inspections of fresh produce and cut flowers imported into the UK. In a recent article on the Fresh Plaza website, the UK Fresh Produce Consortium (FPC) called for more efficient inspections and a reduction in the frequency of checks on reputable traders, with inspections being targeted at ‘where the real plant health problems lie, outside fresh produce and cut flowers’.
FPC maintains that ‘Plant health issues arising from fresh produce and cut flowers are minimal, accounting for less than 1 per cent of all consignments.’ FPC suggests that inspections should be targeted on the five countries it names as ‘responsible for 77% of all issues’ – Dominican Republic, Ghana, India, Pakistan and Vietnam.
The increase in fees and charges is part of efforts by UK inspection services to achieve full cost recovery, and will reportedly raise the costs of import checks by 73% from 2012 to 2014, with ‘significant increases in plant passport fees, plant health licensing and services’. According to FPC, ‘many sectors of the industry will struggle to absorb these costs’. This could result in a 1.9% increase in consumer prices, while trading activities move elsewhere in the EU. Particular concerns have been expressed regarding companies with long-term supply contracts. The financial burden posed by the new charges could also prove particularly onerous for small companies.
Moves towards increased cost recovery from plant inspection services can be seen as one of the effects of policy responses to the economic crisis in the EU. Given the disproportionate impact that inspection cost increases could have on small companies and those with long-term supply contracts, issues related to the functioning of fresh produce and cut-flower supply chains would appear to arise. How are these additional costs to be shared along the supply chain? Will the burden fall exclusively on primary producers in the ACP?
In an era of preference erosion, extending special treatment to ACP suppliers – particularly least developed countries and vulnerable small economies seeking to diversify away from commodity dependency – potentially offers an important area for EU assistance. Given that inspection charges and frequency of inspections are commonly based on the SPS ‘track record’ of the exporting country, new exporters can require assistance in defraying the costs of inspection while they build up their safety record and export volumes. This would appear to constitute a potential area for ‘aid for trade’ support, in order to ensure that ACP exporters from small and vulnerable economies can remain in the supply chain until such times as their record and export volumes are sufficient to reduce the unit cost of inspections.