Greater support for European POs

The international marketing magazine for fresh produce buyers in Europe
Carl Collen

BY CARL COLLEN

Greater support for European POs

New regulations adopted today by the European Commission will see simpler rules and more support for fruit and vegetable producers

Greater support for European POs

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The European Commission has announced that it as adopted new regulations that ensure European fruit and vegetable producer organisations will benefit from simpler rules, reduced administrative burden and greater financial support in times of crisis.

Concluding a two-year review as part of the Juncker Commission's ongoing Better Regulation initiative, the updated and simplified delegated regulation of the European fruit and vegetable sector will further strengthen the role of Producer Organisations (POs) by making them more attractive to non-members, while at the same time improving the functioning of the existing market management scheme.

"In the context of farming and food production in Europe, the fruit and vegetable sector is of vital importance," explained European Commissioner for agriculture Phil Hogan. "The European Commission has and will continue to stand by the sector. It is essential too that the millions of farmers producing some of the highest quality food in the world are adequately rewarded for their efforts and that consumers continue to have access to such produce."

Every year, some €47bn worth of fruits and vegetables are produced by 3.4m holdings across the EU, roughly a quarter of all EU farms. According to the latest available figures, there were around 1,500 POs covering 50 per cent of the EU fruit and vegetables production.

In addition to the direct aid and the EU co-financing of rural development projects, EU fruit and vegetable growers have benefited from support measures totalling €430m since the imposition by Russia of an embargo on EU agri-food exports in August 2014. The European Commission also provides additional funding for Producer Organisations of about €700m each year.

In addition to this ongoing market aid, the new rules will bring a number of other measures into play, the EC announced:

- These include an increase in the support available to the fruit and vegetable sector for market withdrawals, as in, when products have to be removed from the market due to unforeseen market developments. Withdrawal prices will increase from 30 per cent to 40 per cent of the average EU market price over the last five years for free distribution (so-called charity withdrawals) and from 20 per cent to 30 per cent for withdrawals destined for other purposes (such as compost, animal feed, distillation).

- The EU also pledged a greater attractivity of POs in the fruit and vegetable sector to producers that are currently not members, by providing more clarity about what actions by POs are eligible for EU funding support – for example, investments in technology or quality improvement – and setting a maximum percentage of produce that can be marketed outside the organisation at 25 per cent.

Although members are encouraged to deliver their whole production to the PO to market on their behalf, many also have a tradition of direct selling to consumers. Encouraging short supply chains such as this is a key proposal from the Commission, but with only a current minimum threshold fixed in the existing Regulation and each Member State setting its own maximum ceiling, the new rules will allow for a more consistent approach.

- Finally, a simplification and clarification of the legislation with regards to transnational producer organisations and their associations. These organisations are a key element of the sector's internationalisation, as they not only help to give farmers greater market access for their output but also ensure that value-added generated by higher exports is returned to farmers. To simplify and clarify the payments to transnational organisations, controls and payments are for example now linked to the territory where the action of the transnational organisation is implemented.

Following the adoption by the European Commission, the Council and the European Parliament now have two months to vote on the delegated regulation, which will then enter into force.

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