The European Union (EU) this week introduced new rules aimed at simplifying bureaucracy for producer organisations (POs) and making it easier for the produce sector to get financial help during times of crisis.
The EU Executive Committee has finally completed a two-year review as part of the Juncker Commission’s “Better Regulation” initiative.
It means there will be updated and simplified rules for the sector strengthening the role of POs, including “reducing the administrative burden” and making them more attractive to non-members, as well as improving how the current market management scheme works.
Speaking with Fresh Fruit Portal, general delegate of the European fresh produce association Freshfel, Philippe Binard, welcomes the move.
“It has been a very long process and there are a number of changes regarding the simplification of the functioning of the rules for producer organisations which is more about consolidation of the legislation,” he says.
“It means they are putting the rules in the new format for the European Union. Indeed there have been a number of changes, one point being the adjustment of the withdrawal prices and there are a number of other very technical aspects which have been part of the legislation.
“It’s been a long process because it’s a very heavy text. It does not solve everything but it’s a good move.”
Around €47 billion (US$50 billion) worth of fruits and vegetables are produced by 3.4 million holdings across the EU, roughly a quarter of all EU farms, while 1,500 POs cover 50% of EU production.
Since the Russian embargo began in August 2014, EU producers have benefited from exceptional support measures worth €430 million (US$457 million) and the European Commission (EC) also provides additional funding for POs of about €700 million (US$744 million) every year.
On top of this market aid, there will also be 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 also increase from 30% to 40% of the average EU market price over the last five years for free distribution and from 20% to 30% for withdrawals destined for other purposes like compost, animal feed and distillation.
The new rules also promise POs “greater clarity” to be eligible for EU funding and set a maximum percentage of produce that can be marketed outside the organisation at 25%. They also intend to simplfy legislation relating to transnational POs and their associations.
These organisations, says the EC, 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.”
Now the EC has formally adopted the rules, the European Parliament and Council has two months to vote on the delegated regulation before it comes into force.
“In terms of market support, the sector remains quite concerned about the impact of the Russian embargo, so one of the elements is discussing the continuation of the measure for this embargo which has been in place since August 2014,” adds Binard.
“What they have done through this legislation is to agree to adjust the withdrawal price to try to clear the market whenever there is an unbalance by also favouring, not the destruction of the product, but the adjustment of the product into a system of free distribution to charities etc.
“It depends on the product but the withdrawal price has been adjusted. They have also facilitated and increased the indemnity which includes this kind of additional withdrawal.”