- Freshfel Europe releases COVID-19 Impact Assessment
- COVID-19 and unfair trading practices
- Exceptional measures – Submission of proofs of preferential origin
- French Development Agency and Expertise France – new initiatives
- DG Trade estimates 9.7% decrease in global trade
- European businesses and due diligence
- Returning to work after coronavirus
Freshfel Europe releases COVID-19 Impact Assessment
On 6 May Freshfel Europe released its COVID-19 Impact Assessment for the European fresh fruit and vegetable sector. The 88-page document analyses the effects on each stage of the supply chain (production, wholesale, intra-EU trade, EU exports, imports into the EU and retail) until the beginning of May 2020, and outlines the implications of the pandemic for the sector, including recommendations for policy-makers. The report concludes that further support will be needed for the sector to safeguard its competitiveness in the coming months and to secure the supply of fresh fruit and vegetables to consumers throughout 2020 and beyond.
Freshfel reports that the impact on fruit and vegetable production in African countries is not yet foreseeable, as the expected peak of infections in the continent is July/August. Many African countries are now starting to focus on ensuring intra-African markets and to ensure internal food security, which will also have an effect on available export volumes long-term. The closure of wholesale markets and food service sectors has additionally put pressure on African fruit and vegetable exports to Europe.
A section on documentation reports that the changed logistic situation, in particular at airfreight level, has been leading to delays with regard to the delivery of necessary original documents for imports such as the EUR-1, Certificate of Organic Inspection (COI), and phytosanitary documentation. This situation is currently under control given the exceptional measures taken by the European Commission. But in particular for phytosanitary certificates and the COI, the current measures are only until 31 May/1 June 2020. As many countries of origin have not yet reached the peak of infections and related emergency measures, Freshfel recommends that the Commission should be ready to prolong the acceptance of copies and related flexibility in an uncomplicated and quick procedure. The issuance of the COI in the countries of origin – which has not been made flexible in the current emergency measures – is currently creating many delays related to the shortage of workforce and the issuance chain from the farm to the national control bodies. Many importing countries will not have the COI ready before the departure date. Therefore, a dramatic reduction of organic fruit and vegetable imports has already started and will continue throughout the crisis period. Countries such as the Dominican Republic are considering a complete stop of organic banana imports to the EU for the time of the crisis, as they are unable to organise the issuance of the COI in time.
Philippe Binard, General Delegate of Freshfel Europe, in an interview on the European produce industry’s response to COVID-19 (Produce Business UK, 29 April), says “there are many additional costs. Will they be compensated by the increased price, or will it go back to the chain? And there are further costs throughout the distribution chain, related to social distancing, expanded safety measures … I think it could work maybe a month or two months, but if all these other costs are permanent, it could cause a lot of difficulty in their chain on financial sustainability.”
COVID-19 and unfair trading practices
Farmers are noticing an increase in the use of unfair trade practices (UTPs) in the wake of the coronavirus pandemic, while the implementation of the EU regulation that should protect them is still in its early stages (Euractiv.com, 30 April). UTPs create imbalances in the food supply chain when large operators can count on more bargaining power with weaker trading partners, such as individual farmers and smallholders. EU legislators approved rules to tackle UTPs a year ago; however, many national members of the EU farmers’ organisation COPA-COGECA are reporting a spike in UTPs since the pandemic started, including downward pressure on prices paid to producers while consumer prices remain unchanged, especially for perishable products such as fruit and vegetables. Downstream operators in the food chain are also reportedly applying contractual penalties if the supplier does not deliver the ordered volumes, even when the cause is beyond their direct control. Unilateral removal of fresh product lines from shops and the consequent refusal to accept deliveries of such products is another unfair practice, as well as unilateral changes to contracts, invoking ‘force majeure’ circumstances. COPA-COGECA has called on the European Commission to push member states to properly and swiftly transpose and implement the EU Directive on combating UTPs along the entire agri-food supply chain.
Exceptional measures – Submission of proofs of preferential origin
The European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD) has published Guidance on Customs issues related to the COVID-19 emergency, making available the overview of origins where copies for certificates of origins or EUR-1 will be accepted. In addition to Ecuador and Peru, the chart covers many other EU import partners, including Cameroon, Chile, Costa Rica, Colombia and Mexico, where copies will be accepted.
French Development Agency and Expertise France – new initiatives
The French Development Agency (AFD)’s €1.2 billion initiative “COVID-19 – Health in Common” has announced financial support for six new health projects, worth a total of €12 million, in Benin, Cameroon, Ghana, Guinea, Democratic Republic of Congo and Senegal. Support focuses on the urgent need for research, monitoring, testing, formulating effective health policies, and patient treatment. The “COVID-19 – Health in Common” initiative targets not only central governments, but also civil society organisations, public development banks, the private sector and French stakeholders in global heath.
Within the framework of “COVID-19 – Health in common”, Expertise France, the French international technical cooperation agency, has launched a technical support platform, “COVID-SANTE EF”. The platform supports health authorities in vulnerable countries to manage the health crisis related to the COVID-19 pandemic by facilitating the circulation of information. Composed of a documents database and a network of experts present in partner countries, its primary mission will be to share experiences from different countries, validated knowledge, and World Health Organization (WHO) recommendations.
The priority countries are those where the health systems are the most fragile and/or where Expertise France has technical capacity that can be immediately mobilised: Burkina Faso, Burundi, Côte d’Ivoire, Central African Republic, Chad, Democratic Republic of Congo, Guinea-Conakry, Mali and Niger. The platform may gradually be extended to other countries.
DG Trade estimates 9.7% decrease in global trade
The Directorate General for Trade of the European Commission (DG Trade) has issued a report on the impact of the COVID-19 pandemic on global and EU trade (17 April). The analysis estimates a 9.7% decrease in global trade for 2020. For the EU27, the predicted COVID19-related economic contraction results in a reduction of 9.2% in extra-EU27 exports of goods and services, and an 8.8% decrease in extra-EU27 imports in 2020. Exports of primary sectors (other than energy) and services trade appear to be less strongly affected than manufacturing sectors, most of which see export contractions above 10%. The report explains why the World Trade Organization’s projections indicate a broader range of trade decline.
European businesses and due diligence
The European Centre for Development Policy Management (ECDPM), an independent think tank that aims to make policies in Europe and Africa work for inclusive and sustainable development, believes that businesses have the responsibility for mitigating human rights and environmental risks along their supply chains, as defined by the UN Guiding Principles on Business and Human Rights – as well as it being in companies’ interest that their supply chains don’t crumble as a result of COVID-19 and are able to weather the threatened global economic crisis (blog post, 20 April). Some businesses are coming up with innovative solutions to raise awareness on corona-preventive measures: for example, Cargill is disseminating such information to cacao producers and local communities in Côte d’Ivoire via a mobile device that producers already owned for supply chain traceability. Other companies have made donations to governments in an act of solidarity to fight the virus, as in Ghana and Liberia.
Perhaps even more importantly, companies need to take COVID-19 into account in their purchasing practices, for example proceeding with payments and avoiding cancelling orders already in production. In addition, public procurers should apply responsible purchasing practices and require or encourage suppliers to have proper due diligence processes in place.
Returning to work after coronavirus
The European Agency for Safety and Health at Work (EU-OSHA) has issued guidance on returning to work after coronavirus. The guidance contains links to national information, within and outside Europe, on specific sectors and occupations including food retail, food processing, agricultural workers from abroad, and agricultural worksites, among others. It covers risk assessment and appropriate measures, involving workers, taking care of workers who have been ill, planning and learning for the future, and staying well informed.