Fruit & veg aid package

On 18 August the Commission announced it will make available €125 million of emergency support measures, with the aim of avoiding a crisis in the European fruit & veg market as a result of Russia closing its borders to imports from the EU.

Government and its agencies are currently putting the measures in place to make the aid package available to UK growers. However, we have to be clear from the outset that the EU regulation governing the aid means the package is subject to many limitations in what it offers growers, and not all of these will be clear until the regulation is actually published on Monday 1 September. But the following is an outline of what we understand currently

• The aid is currently capped at €125 million, €82 million of which is allocated for apples and pears, the remaining €43 million is for other fruit & veg.
• The aid is only available in relation to the following products intended for fresh consumption - tomatoes, carrots, cabbages, sweet peppers (but not chilli peppers), cauliflowers and headed broccoli, cucumbers, gherkins, Agaricus mushrooms, apples, pears, plums, some soft fruit (raspberries, blackberries (and similar), currants, gooseberries, blueberries (and similar)), fresh table grapes, kiwifruit.
• The aid will be available to growers whether they are in Producer Organisations (PO) or not. However
  • the preferred route to draw down on the aid will be via a PO. This would require non-PO growers to draw-up a contract with a PO to carry out this function, and the PO will be entitled to levy a charge on the claim to cover administrative costs.
  • if non-PO growers are unable to make these arrangements, they will be able to make a claim directly with the Rural Payments Agency (RPA).
• POs may want to consider options to amend operational programmes to include promotion, undertaken as a crisis prevention measure.
• In the UK the aid will only be available for eligible fruit & veg taken off the market from 1 September to 30 November 2014. There is no aid for losses as a result of a downward pressure on prices paid for products.
• Fruit & veg can be taken off the market in number of ways
  • Withdrawals
    • Meaning either ‘free distribution’ – giving the produce away to a charity, school, hospital etc, or
    • destroying the produce by sending to landfill, denaturing etc
  • Green-harvesting
  • Non-harvesting (e.g. ploughing-in)
• The exact amounts of support will not be known until after the regulation is published on Monday 1 September. Some proposed amounts of support for market withdrawals are as follows

But these maximum amounts of support are subject to many caveats. They are only applicable if the withdrawal mechanism is free distribution. For any other type of withdrawal, the payment rate is lower. If you are undertaking non-harvesting or green-harvesting then the payment rate has to be converted to a per hectare basis, but it will be equivalent to a rate that is lower again. Then overlaying all these reductions (with the exception of free distribution) is a further 50% reduction in the payment rate if you are not a member of a Producer Organisation. Finally, while the Commission intends to effectively stop accepting application for aid when the budget runs out, if there is an oversubscription, then at the end of the scheme, everyone’s payments could be reduced to take account of that oversubscription.

• If you are undertaking any of these measures to take eligible crops off the market during the period 1 September to 30 November, then you will be eligible to make an application for support, but the reality is that the support rates are going to be low.
• You can claim on any eligible crop. It does not have to have been destined for export to Russia or anywhere else.
• The crop being withdrawn will have to be inspected, to audit the quantity and ensure it is of marketable quality. As a result, before you take any action with a crop, you have to notify the Rural Payments Agency, so they can send out a Horticultural Marketing Inspector to carry out the necessary checks.
• If you wish to apply for any of these support payments then it is essential that you notify the RPA immediately. Until a bespoke mechanism to do this is set-up, and guidance appears on the RPA website, then the best action will be to call the RPA on 0845 603 7777.

The limitations of the EU regulations mean these schemes always have significant faults for UK growers. However, the aim is for it to provide a relatively simple opportunity for growers of eligible crops to withdraw those crops from the market up until 30 November and receive some financial aid as a result. The NFU horticultural team will be working closely with colleagues in Defra, the RPA and HMI to make sure the UK scheme is implemented in as simple, practical and pragmatic way as possible.

One of the big unknowns with this crisis is exactly how, over time, it is going to affect the UK supply chain for various fruit & veg products. If you have any evidence of the crisis impacting on the product you grow, please send us details in total confidence to aG9ydGljdWx0dXJlQG5mdS5vcmcudWs=.

We have heard some concerns about the Russian import restrictions causing a downward pressure on prices. Again, if you have evidence of this occurring, please send details in total confidence to aG9ydGljdWx0dXJlQG5mdS5vcmcudWs=. The NFU will be monitoring this situation, but expects the major retailers to behave responsibly and not exploit these circumstances, and to back British growers, and pay a price that reflects the quality of the product.