The Challenge of Compliance with SPS and Other Standards Associated with The

47848 Agriculture and Rural Development Discussion Paper Public Disclosure Authorized The World Bank The Challenge of Compliance with SPS and Other Standards Associated with the Public Disclosure Authorized Export of Shrimp and Selected Fresh Produce Items to the United States Market John E. Lamb Public Disclosure Authorized Julian A. Velez Robert W. Barclay Public Disclosure Authorized First printing or web posting: 2005 © 2004 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] All rights reserved. Agriculture and Rural Development Discussion Papers is an informal series produced by the Agriculture and Rural Development Department of the World Bank. These papers raise concepts and issues for discussion in the broader development community and describe ongoing research and/or implementation experiences from the Bank. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank, the governments they represent, or the organizations of contributing authors. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202- 522-2422, e-mail [email protected]. 2 Contents Foreword v Acronyms vi Introduction 1 1. Food Consumption and Import Trends 3 Per Capita Consumption for Selected Categories 3 Role of Imports in U.S. Food Supply 3 Seafood Imports: Spotlight on Shrimp 9 Fresh Produce Imports: Spotlight on Selected Fruits and Vegetables 11 2. Standards Applicable to Imported Food 18 Definitions 18 Purposes 18 Tangible vs. Intangible Standards 18 Degree of Voluntarism 18 Types of Standards 19 Areas of Application in Food and Agriculture 20 3. Coping with Shrimp Standards 24 Standards Applicable to Shrimp 24 Compliance Issues 28 Direct Cost Implications of Compliance Issues for Shrimp 31 4. Coping with Standards for Fresh Fruit and Vegetables 34 Standards Applicable to Fresh Produce 34 Compliance Issues for Selected Fresh Produce Categories 41 Direct Cost of Compliance Issues in Selected Produce Categories 47 5. Other Costs Associated with Compliance with Emerging Standards 50 Additional Costs of Noncompliance 50 Industry Perceptions Concerning Costs of Noncompliance 51 Strategies for Dealing with Risks Associated with Noncompliance 51 6. Conclusions 54 Findings 54 Recommendations 54 Appendixes 1. Value of U.S. Imports of Shrimp from All Countries, 1998–2003 56 2. Volume of U.S. Imports of Shrimp from All Countries, 1998–2003 57 3. Excerpts from FDA Import Alerts on Shrimp 58 4. Excerpts from FDA Import Alerts on Fruits and Vegetables 60 Bibliography 62 Figure 3 1 Causes for FDA refusal of entry for shrimp (all exporting countries and all ports of 31 entry) June–October 2003 Tables 1 US per capita consumption of major food commodities 5 2 Import shares of United States food consumption for major categories by weight 6 3 Detailed import shares of United States food consumption by value, 1980–2001 (%) 7 4 US imports of fish products from all countries, 1999–2000 (US$) 9 5 Volume of US imports of fish products from all countries (MT) 10 6 Shrimp import share by form and presentation (US$) 12 7 US cantaloupes: Supply, use, and price, farm weight, 1978–2003 13 8 US imports of fresh cantaloupe by value 14 9 Fresh mangos: Supply and use, 1980 to date 15 10 US imports of fresh mangos by value, 1998–2002 15 11 US asparagus: Supply, use, and price, farm weight, 1978–2003 15 12 US imports of fresh asparagus by value, 1998–2003 16 13 US imports of fresh red raspberries by value, 1998–2003 17 14 US imports of fresh edible pea pods by value, 1998–2003 17 15 Matrix of standards applicable to shrimp 25 16 Direct costs associated with FDA hold/exam for a container of shrimp 32 17 Direct costs associated with FDA detention/refusal of a container of shrimp 33 18 Matrix of standards applicable to fresh produce 36 19 Illustrative costs of fruit and vegetable shipments that are refused entry to the US 49 (US$) 20 Illustrative costs of fruit and vegetable shipments that are detained but released (US$) 49 4 Foreword Food and agricultural trade is the vital link in the mutual dependency of the global trade system and developing countries. Developing countries derive a substantial portion of their income from food and agricultural trade. The emergence of food safety and agricultural health issues and the related tightening of market requirements form challenges to further gains from trade due to the lack of technical and financial capacities of many developing economies. As part of a joint program between the World Bank’s Agriculture and Rural Development Department (ARD) and International Trade Department (PRMTR), a survey on the Cost of Compliance of exporting developing countries was undertaken. The survey was focused on the supply chains of high-value food products (horticulture, fish, meat, spices, and nuts). The study quantified the costs incurred by both the public and private sectors; identified the coping strategies employed by the various stakeholders in the supply chains; determined the constraints that hinder compliance; examined the structural changes in the supply chain resulting from compliance with the safety standards; and evaluated the impact of these standards on small-scale enterprises and producers. The survey included Ethiopia (animal products), India (fish and spices), Jamaica (nontraditional agricultural exports), Kenya (fish and horticulture), Latin America Southern Cone (animal products), Morocco (fruits and vegetables), Nicaragua (shrimp), Senegal (fish and groundnuts), and Thailand (shrimp and horticulture). A complementary perspective is provided by the companion series of buyer surveys involving representative importers, brokers, retailers, and distributors in the European Union, Japan, and the United States. This series, in turn, discusses the buyers’ perception of the strengths and weaknesses of their suppliers and describes the assistance and/or interventions offered by the buyers to their developing country suppliers. This working paper is one of a series of such buyer surveys. These surveys examined the strategies of suppliers from the buyers’ perspective and the costs of intervention to assist the various developing country stakeholders to comply with international agro-food standards. This paper was prepared by John E. Lamb, Julian A. Velez, and Robert W. Barclay (all with Abt Associates, Inc.), with guidance from Steven Jaffee (PRMTR). The findings and conclusions derived from these country studies are discussed in a synthesis report that seeks to identify possible points of intervention by the World Bank and other donor agencies and to determine the types of technical assistance that would be most efficient and appropriate. It is hoped that the experiences of these exporter and importer countries will provide useful insights to practitioners in the field, and to national and international policymakers in both the public and private sectors. Kevin Cleaver Director, Agriculture and Rural Development Department Uri Dadush Director, International Trade Department 5 Acronyms ADI Acceptable Daily Intake AGEXPRONT Guild of Non-traditional Products Exporters (Guatemala) AMS Agricultural Marketing Service (USDA ) APHIS Animal and Plant Health Inspection Service (USDA) ASDA American Seafood Distributors Association BSE Bovine Spongiform Encephalopathy (mad cow disease) CBP Customs and Border Protection CDC Centers for Disease Control and Prevention (DHHS) CIF Cost, Insurance and Freight CFSAN Center for Food Safety and Applied Nutrition (FDA) CODEX Codex Alimentarius COMTRADE Commodity Trade Statistics Database (UNSTAT) COOL Country of Origin Labeling DEA Drug Enforcement Agency (US) DHHS United States Department of Health and Human Services DRC Dispute Resolution Corporation DWPE Detention without Physical Examination EBDC Ethylenebis dithiocarbamate EDB ethylene dibromide EDI Electronic data interchange EPA Environmental Protection Agency (U.S.) ERS Economic Research Service (USDA) ESSTO European Seafood Safety and Traceability Organisation EurepGAP European Retailers Programme for Good Agricultural Practices FAO United Nations Food and Agriculture Organization FDA United States Food and Drug Administration (DHHS) F&DC Food, Drug and Cosmetic Act FFDCA Federal Food, Drug and Cosmetic Act FIFRA Federal Insecticide, Fungicide, and Rodenticide Act FMI Food Marketing Institute (US) FOB free on board FQPA Food Quality Protection Act of 1996 FSIS United States Food Safety and Inspection Service (USDA) FTS Federal Technology Service (GSA) FY Fiscal Year GAA Global Aquaculture Alliance GAO Government Accountability Office GAP Good Agricultural

Load more