Sjors van der Helm
Someone else's wallet
According to Sjors, the ideas are not only outdated, but the binding requirement to have your product sold by a third party also causes problems, he says. "This doesn't lead to the max selling price in all cases. The various marketing cooperatives will really make an effort and also be accountable to the affiliated members, but they do have access to someone else's wallet, which leaves room for discussion. Sometimes this happens unwittingly, because smaller segments can or product groups can disappear into the larger whole, while these kind of products could strengthen the sales position of the cooperative. This is frustrating for an individual member within a larger association."
Limited innovation
"I am convinced that the fact that the producer has no say over the price, keeps the producer away from the market," continues Sjors. "This arrangement does not encourage the farmer and the grower to think about his product, but only about the production method, which in turn leads to limited innovation in the area of new product-market combinations, and so the CMO budget mainly goes into intensification of production."
Possibility of fines
"The fact that CMO subsidies are ultimately golden handcuffs, which bind growers for a number of years to a cooperative, regardless of whether the cooperative is of value to the company in those years, is left out of consideration. Then there is also the question of whether the investments you made with the subsidy are also allowed, because it's not possible to check this in advance. So the possibility of having to partially or even fully refund a subsidy is always there."
Clear policy
"The CMO scheme has been drawn up as a framework from Europe, and we see that member states interpret the framework differently, so it may happen that you can still purchase a small packing machine as an individual grower in Belgium, while in the Netherlands you need to be a collective to do this. The principle that governments determine what the subsidy may or may not be used for is, in principle, good, but discuss this at the EU level and then adjust the scheme collectively," Sjors says. "Now it provides competitive advantages and disadvantages within the Eurozone that are difficult to explain to a sector where margins are not particularly great."
Continuing CMO in the current way is not a good idea according to Sjors. "It is now a circular machine that many officials work on, without the scheme contributing to the primary objective of food security. At the same time, we have been helped earlier with a campaign to stop the decline in fruit and vegetable consumption. It also promotes overall health within the Eurozone, which means that the sector has a good living and that healthcare costs decrease."
Future-proof subsidy system
But what if the scheme continues to exist? "As an entrepreneur, you should at least be free to decide who you sell your product to, without causing heavy fines. And yes, that can still be done collectively, which in some segments will be necessary to increase the scale of retail and breeding. But it should not become a bottleneck for smaller segments. In addition, the application for subsidies must be examined and approved in advance, prior to investments being made. Subsequent audits have already resulted in complex lawsuits between Brussels and member states or between member states and growers. Finally, the framework must be clear to all member states and leave no room for competition between them", Sjors concludes. "Only then is CMO future-proof and defensible for the new generation of farmers and growers."
For more information:
Sjors van der Helm
bQurius
+31 6 2922 5689