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 (PO) by making them more attractive to non-members, while at the same time improving the functioning of the existing market management scheme.
European Commissioner for Agriculture Phil Hogan today said: "In the context of farming and food production in Europe, the fruit and vegetable sector is of vital importance. 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 €47 billion worth of fruits and vegetables are produced by 3.4 million holdings across the EU, roughly a quarter of all EU farms. According to the latest available figures, there were around 1 500 Producer Organisations covering 50% 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 of exceptional support measures totalling €430 million 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 €700 million every year.
In addition to this ongoing market aid, the new rules will bring:
- An increase in the support available to the fruit and vegetable sector for market withdrawals – when products have to be removed from the market due to unforeseen market developments. Withdrawal prices will increase from 30% to 40% of the average EU market price over the last five years for free distribution (so-called charity withdrawals) and from 20% to 30% for withdrawals destined for other purposes (such as compost, animal feed, distillation, etc.).
- A greater attractivity of Producer Organisations 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%. 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.
- 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 today's 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.
The EU actively supports the fruit and vegetable sector though its market-management scheme (part of the "common organisation of agricultural markets"), which has four broad goals: a more competitive and market-oriented sector; fewer crisis-related fluctuations in producers' income; greater consumption of fruit and vegetables in the EU; increased use of eco-friendly cultivation and production techniques.
Strong producer organisations have a key role in dealing collectively with unexpected and adverse situations. Through its Common Market Organisation Regulations, the EU encourages farmers to set up Producer Organisations in order to strengthen their position on the market through a stronger bargaining position with the retail sector, as well as through production planning, innovation and crisis prevention, and management measures. The EU supports farmers in these efforts by providing funding to help them plan their production, innovate and farm in an environmentally-friendly manner.
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