POs

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Call for EU to help fruit and veg farmers gain clout with retailers

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The European Commission needs to intensify its efforts to protect farmers from unfair trading practices by large retailers, according to a draft report to the European Parliament by the Committee on Agriculture and Rural Development rapporteur Nuno Melo.

“There seems to be little point in investing resources in strengthening and creating POs (producer organisations) – a slow and difficult process – if negotiating power in the food supply chain remains highly concentrated in retailers’ hands,” the draft report, dated January 29, says.

Because fruit and vegetables (F&V) are mostly perishable products that must be sold quickly, this leaves farmers in a structurally weak bargaining position vis-à-vis major retailers.

 

Need for improved crisis measures

And while market crises occur frequently in the F&V sector, since even small production surpluses can cause large falls in producer prices, “there seems to be a consensus that crisis prevention and management (CPM) instruments are not being sufficiently used.”

“This is a worrying a situation, given that market crises are a regular feature of F&V production, since even small increases in production, due to favourable weather conditions for instance, can cause large falls in prices.” The draft report therefore calls on the commission to consider making contributions to mutual funds eligible as CPM measures, to help farmers protect themselves against large drops in income.

 

Too much uncertainty and complexity

It also says that associations of producer organisations (AOPs) could play an important role in increasing the bargaining power of farmers and urges the commission to reinforce incentives for setting up APOs and to envisage a greater role for them in the future.

Reducing legal uncertainty and administrative burdens “should be a first step in making POs more attractive,” it says.

However, the report also stresses that the basic architecture of the EU fruit and vegetables regime should not be changed as part of the commission’s ‘simplification’ agenda and its upcoming review of the implementation of rules on producer organisations, operational funds and operational programmes in the fruit and vegetables sector since its 2007 reform.

 

Read the full draft report here.

 

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Commission admits too many fruit and vegetable producers not getting EU aid

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The European Union fruit and vegetable regime needs to be reviewed to ensure support for producer organisations, the European Commission has said in a report to the European Parliament and Council.

This is needed in order to achieve in all Member States the objectives of the EU farm policies set under the 2007 and 2020 reforms.

Since the 1996 reform, producer organisations (POs) have been the cornerstone of the EU regime for the fruit and vegetables (F&V) sector.

“The EU average of degree of European production within Producers’ Organisations has slightly improved +1,2% and reached 48,4%, but it is still far below the objectives established in 2007 of more than 70%.

Only a limited number of F&V producers are members of a PO. “Thus, most producers are excluded from the direct benefits of the EU regime for the F&V sector,” the Commission said in its report.”

“Moreover, despite progress made at the national level, in some Member States there are still significant regional imbalances in the degree of organisation of F&V producers. An example of that is Italy, where the relatively high national organisation rate (about 47%) is the result of the high organisation rate of some northern regions and the low organisation of several other regions.”

Later in the report, the commission said the “persistently low degree or lack of organisation in some MSs” is a crucial issue needing careful analysis with a view to identifying, where appropriate, additional measures to encourage not only a further rise in the degree of organisation of producers in the whole EU but also a decrease of the imbalance of F&V producers’ organisation within the EU.

“A low degree or lack of organisation also means that most F&V producers do not belong to a PO, so they do not directly benefit from specific EU aid for the sector,” it said.

“Those producers, frequently the smallest, cannot even benefit from the services that POs could provide, have very weak bargaining power within the supply chain and are more exposed to the risks linked to market globalisation and climate change.”

Increasing the rate of organisation of the F&V sector remains crucial especially in Member States where the organisation is still very low. In this respect, there is also the need to explore measures to stimulate forms of cooperation to help PO’s and non-organised producers to better deal with those challenges.

To address such shortcomings, the current EU F&V regime needs to be reviewed and the Commission could build upon the results of the report and upcoming debate to later present legislative proposals “to revise the Union aid scheme for the fruit and vegetables sector.”

Read the report here.

Follow progress here.