2454 final report.pdf - Agra CEAS Consulting

Evaluation of the Community Plant Health Regime: Final Report
DG SANCO Evaluation Framework Contract Lot 3 (Food Chain)
Direct costs and losses refer to costs and losses caused directly by the measures imposed by
the plant health authorities. They concern the costs of destruction, the value of the destroyed
plant material (infested or suspected), the cost of pesticide treatment (if applied), the partial
loss of plant material value due to pesticide treatment (e.g. in case of pesticide treatment of
tomato against Bemisia tabaci , reduced value of the product which is not pesticide-free), cost
of disinfection and losses associated to business interruption.
An example of losses associated to business interruption refers to the ‗aubergine‘ test, applied
in case the PCR test for brown rot or ring rot on potatoes reveals positive. The PCR test gives
results in one day whereas the ‗aubergine‘ test (which has to be carried out to ascertain that
the result was not a false positive) takes up to 7 weeks to give a result. In the meanwhile, the
production has to be blocked under the National Protection Authority. This generally causes a
lot of losses and commercial problems because at the time the production is released, the
production cannot be sold or the value has decreased.
Direct losses generally also include price risks, i.e. partial loss in plant material value due to
price decrease on markets caused by HO outbreaks and/or higher replacement costs.
Indirect losses, also referred to in literature as consequential losses, are the losses indirectly
accrued to related industries that also experience effects from an HO outbreak, e.g. traders,
processing industries, auction markets, and possibly tourism industries.
For instance, the potato chain is composed of growers (of potato and seed potato), traders
(selling and buying potatoes either as fresh products or for processing) and the processors. As
an example, representatives of the potato sector in BE indicated the following indirect losses
associated to the outbreak of potato ring rot on seed potatoes and ware potatoes in BE in
2003: breach of contract delivery, replacement costs of the goods declared contaminated or
probably contaminated, loss of reputation and market, rejection of seed lots by some buyers
because they came from a sorting centre affected by the contamination, breach of contract
production (due to lack of seed potatoes) or contract of storage.
In case of outbreak, the magnitude of the losses depends on the value of the plant materials
(for instance, according to one interviewee, the value of 1kg of tomato seed is estimated
between €140.000 and €200.000). It also depends on the extent to which the material can be
treated against the HO or need to be destroyed.
Although the evaluation has extensively tried to collect data on the actual or potential costs
and losses incurred by private operators in the case of outbreaks, including via the specific
cost survey, this is one area where no data has been provided by stakeholders. Only the
existing studies reviewed for the purposes of the above sections on impacts and benefits
(3.11.2 and Error! Reference source not found., respectively) indicate the potential scale of
ome losses in certain cases. This is therefore an area where further cooperation with
stakeholders is needed. Determining the extent and scale of the costs and losses incurred by
private operators is an important element for considering the feasibility of their potential
coverage by the solidarity regime.
Food Chain Evaluation Consortium 249