Ad Klaassen, DPA

"More support for recognized producer organizations EU signal"

The past weeks, more has become clear about the European support for growers as a consequence of the Russian ban. The 125 million has been split into two portions – one for apple and pear growers, and one for other producers, and there's been more support for growers affiliated with a recognized cooperative. Ad Klaassen of DPA clarifies the plans.

Growers who are a member of a recognized producer organization, receive more compensation for intervention measures than growers that aren't a member. In the case of intervention measures following the Russian ban, the EU reimburses 50% of the product's value. Producer organizations add another 50% to that for their members. Non-members only receive the 50% of the intervention price that the EU reimburses. "The European Union has been working on fostering grower cooperation in recognized organizations for years", Ad Klaassen of DPA says. "The goal of the CMO is to give growers a better position in the market, and to realize better prices. That comes into its own with collective cooperation. For growers organized in a recognized cooperative, sales will be faster and better. With this EU decision, they want to give a signal. For some DPA members this is a good thing, for others it isn't." In the Netherlands, producer organizations Harvest House and DOOR aren't recognized. "Last year they applied for recognition. That has been turned down. They're being punished for that now." This situation isn't just current in the Netherlands. "In Spain, 40% is organized in cooperatives, in Bulgaria 2%. The differences there are even bigger."

Giving away for free
Part of the plans is full support from the European Union for giving away produce for free to recognized charity organizations. Isn't that market distortion, then? "This measure primarily emerged from the market approach, but has an important ethical and moral aspect: it's unacceptable to just throw away good products", Klaassen thinks. "The group that receives these products, is normally not able to buy them. Also: perhaps, if they're given an apple now, they'll remember that when they're not in such a situation any more, at which point they'll buy one themselves. Socially speaking, it's right, and also from a market point of view."

Apples and pears vs the rest
The 125 million in European support, is split up into two parts. 82 million at most goes to the apple and pear growers, and 43 million to the other producers. For those growers, not a lot remains, Klaassen also thinks. "That's how we experience it. Soon we will have to hand in figures to Brussels, and then we'll have to see how it goes." 

For greenhouse vegetable growers, the situation is particularly ambiguous. On the one hand, low production causes high prices. "And it's better to get money out of the market than from intervention," Klaassen says. "Then prices will have gone down so far, that's nothing to be pleased with." On the other hand, it looks as if prices will go down again because production of fruiting vegetables goes up again. When fruiting vegetables are eligible for support again, the pot could be empty again for the most part. Twice a week, countries file for support in the produce of their choice. "And it's first come, first serve. We have no insight into it yet. But suppose a large-scale intervention has taken place, and non-harvesting schemes have been opened, then things can go fast. Should that be the case on Friday, when the cabinet convenes, then we hope the amount of money will be increased."

Expansion
DPA calls for an expansion of the plans in any case. "We have reported extra products in Brussels, but weren't the only ones to do so. There are huge waiting lists. The Commission has selected which products will and won't qualify. I don't expect that to change." Extension of the intervention period is also an issue for DPA. The current period runs until the end of November. "But for the coming spring, we are worried. A lot comes into play, but if necessary, we hope support will be available then as well." Whether Russia will continue the ban is another matter, but the balance between supply and demand is fragile in any case. "If the coming spring is dark and production low, prices could go up. But things could also go well, on the other hand. Small surpluses and shortages cause extreme prices in this industry." 

Alternative markets
Meanwhile, trading companies are busy looking for alternative markets. "Companies have branches abroad, and are looking what they can organize where. Breaking into new markets is also being looked at: China for bell peppers, Brazil for pears. Sometimes there are phytosanitary limitations – we are still searching. We don't have an exact view on it, but companies aren't sitting back doing nothing." 



Maximum rates
For a number of products, maximum support amounts were already set in a regulation. Now, maximum support amounts have also been set for the other products. These apply to taking out of the market for free distribution and taking out of the market for other destinations. For non- and green harvesting, member states set an amount no higher than 90% of the maximum amounts. Normally, at most 5% of the production can be taken out of the market with support. This percentage is being increased. For tomatoes, the winter rate is observed, of a maximum of 27.45 for free distribution, and 18.30 for other destinations.


Maximum rates






For a number of products, maximum support amounts were already set in a regulation. Now, maximum support amounts have also been set for the other products. These apply to taking out of the market for free distribution and taking out of the market for other destinations. For non- and green harvesting, member states set an amount no higher than 90% of the maximum amounts. Normally, at most 5% of the production can be taken out of the market with support. This percentage is being increased. For tomatoes, the winter rate is observed, of a maximum of 27.45 for free distribution, and 18.30 for other destinations.

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