Original publication: February 2015
Author: Wageningen University: Jos Bijman
Short link to this post: http://bit.ly/2mpmg83
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Towards New Rules for the EU's Fruit and Vegetables Sector - An EU Northern Member States Perspective

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The EU actively supports the fruit and vegetable (F&V) sector through the Common Market Organisation (CMO) for F&V. The key objective of this F&V scheme is to strengthen the competitiveness of producers. In order to reach this goal, growers are encouraged to join producer organisations (POs). These receive support for implementing operational programmes, based on a national strategy.

A recent report of the European Commission on the fruit and vegetables regime (COM (2014)112 final) analyses the implementation of the provisions concerning producer organisations, operational funds and operational programmes in the F&V sector since the 2007 reform. The report concludes that a crucial issue for the sector is the persistently low degree or lack of organisation in some MS. The report also stresses that the complexity of the procedures for obtaining recognition as a PO, for having an operational programme approved and, subsequently, for having access to the public financial aids is a possible obstacle to the development of POs.

This study serves to inform the members of the European Parliament, particularly the members of the Committee on Agriculture and Rural Development (COMAGRI), concerning possible improvements of the EU rules regarding the F&V sector. This study was presented and discussed at the EP workshop entitled “Towards new rules for the EU’s Fruit and Vegetable Sector” (held on 22 January 2015). Where appropriate, the study takes the perspective of EU Northern Member States.

Based on desk research and consultations among representatives of industry and national authorities, this study presents description, analysis and recommendations. Chapter 2 gives a brief overview of the production and farm structure in selected Northern Member States, notably Poland, Germany, The Netherlands, Belgium and the United Kingdom. This information shows that the number of farms rapidly decreases and the size of the remaining farms rapidly increases, while cultivation area and production value are more or less stable. Thus, the membership of POs is changing towards larger and more professional farms.

Chapter 3 presents the key trends among agricultural cooperatives in the EU. This information shows that there are many factors that explain the level of cooperativeness in individual countries. As POs are cooperatives themselves (or at least organisations based on cooperative principles), explanations for the particular level of farmer organisation also apply to POs. Like (other) cooperatives, POs experience challenges in their strategies, their internal governance, and in the quality of their leaders. For the future of transnational POs, much can be learned from transnational cooperatives. An important point to be learned from the long-term development of cooperatives is the crucial role of trust.

Chapter 4 presents the trend in organisation rate in the F&V sector (e.g. value of product marketed through POs / value of total F&V product) and compares this with the trend in cooperative membership. The conclusion is that the organisation rate in the F&V sector is actually rather high, and certainly no reason for concern.

Chapter 5 presents an extensive discussion of the current implementation of the F&V schemes as experienced by EU Northern Member States. The key issue at stake is legal uncertainty, due to different interpretation of the rules by the policy units of the Commission and the National Authorities discussing with the Commission on the one hand, and the Audit Service of the Commission on the other hand. In addition, there are problems with the rules on outsourcing, environmental measures, and competition. Next to improving legal certainty, a simplification of the scheme would be recommended.

This study concludes, in Chapter 6, that no new rules the EU F&V sector are needed. The organisation rate has gone up substantially over the last decade, and is even higher than one would expect on the basis of comparing POs and (other) agricultural cooperatives. What is desperately needed in the F&V scheme is more legal certainty. This can be obtained by simplification of the schemes as well as by more guidance from the Commission.

Other recommendations following from this study are the simplification of the environmental measures, and a stronger focus on support for marketing measures (including new product development). In addition, operational programmes should provide more support for human capital building, for technical skills needed to continuously improve sustainability and to enhance innovativeness, but also for managerial skills as members themselves are involved in the governance of the PO. Also the support of experienced POs for new POs, domestically of internationally, could be part of the human capital programme. Finally, POs could play a role in promoting joint innovation, whether oriented at cultivation or at marketing.

Link to the full study: http://bit.ly/540-347

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