The PHSI will combine with Plant Varieties & Seeds Division (PVS) and the Central Science Laboratory (CSL) to form the Regulatory Science Agency (RSA), which will operate from 1 April 2009 after a year in shadow form.
Becoming an agency will mean the body will have to be financially independent and will be less of a burden on cash-strapped Defra, of which it will still be part.
But growers are concerned about the move. Hampshire Rhododendron grower John Middleton said: "There is a lack of political accountability for this autonomous agency. To meet commercial targets, inspecting charges will rise. And what input will the trade have?"
HTA director general David Gwyther said: "We are extremely concerned by any risk that might be taken on plant health issues."
HTA business development director Tim Briercliffe added: "We recommended that the Pesticides Safety Directorate joined the new agency in order to keep a clear focus for the industry. From our point of view it is a shame that it has instead been moved to the Health & Safety Directorate.
"With regard to the new agency, it is critical to us and HTA members that there is a seamless transition. The change must not be used as an excuse to further cut resources devoted to horticulture. As the changes occur it is paramount that the industry is kept informed."
Defra appointed Adrian Belton as chief executive for the CSL and chief executive (designate) for the RSA on 1 March, at an advertised salary of £110,000 a year. Belton was previously executive director of operations at Natural England and formerly corporate director of Nottingham City Council.
Defra has yet to decide whether PHSI deputy director (plant and bee health) Stephen Hunter will keep his role. Chief plant health and seeds inspector Medwin Bew's post will be transferred to the RSA.
A Defra representative said PHSI has lost eight inspectors and about eight clerical staff in the past year. She added: "No PHSI posts are expected to be lost as a result of the creation of the RSA. Indeed, the PHSI is currently recruiting a number of new import inspectors and clerical staff."
A Phytophthora ramorum meeting is set for later this year. Defra, PHSI, Forest Research and growers will discuss compensation, liabilities and policies.