Fruit and Vegetable Exceptional Support Scheme

Tuesday 21st June 2011 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

On 10 June 2011, Official Report, column 49WS, I informed the House about the disruption of the EU fruit and vegetables market and the impact on growers of the consequences of the E. coli outbreak in Germany, including a fall in consumer confidence and the import ban on EU produce imposed by countries including Russia. I told the House of discussions in the Agriculture and Fisheries Council on 7 June of exceptional measures to address the situation and support growers, and of proposals put to the EU Fruit and Vegetables Management Committee.

On 14 June, the Management Committee agreed a European Commission proposal which came into effect on 18 June and I wish to inform the House that we have launched a scheme to implement the resultant measure in the United Kingdom. The scheme is being run by the Rural Payments Agency (RPA) and it is open for applications now. The EC measure is time limited and it is important that those affected by it are aware that the scheme will be in place only until Thursday 30 June.

The main features of the scheme are as follows:

It provides aid for the withdrawal of produce from the market, non-harvesting and green harvesting (meaning premature harvesting for disposal) of specified produce, the markets for which have been most affected.

It is open both to producer organisations (POs) and to producers who are not members of a PO, who may make arrangements with a PO or failing that, apply direct to the RPA and be registered with them.

The specified crops are tomatoes, lettuce and endives, cucumbers, sweet peppers and courgettes.

In the UK, it applies to withdrawal and harvesting operations notified to the RPA between the 18 June and 30 June 2011.

Maximum rates of aid for each crop are set out in the regulation, representing about half the normal market price for such produce in June.

The producer notifies the RPA in advance of the intention to withdraw produce so that an inspection can take place to verify quantities, compliance with standards etc., and agree an approved disposal route.

Applications for aid must be lodged with the RPA by 6pm on 30 June.

RPA will notify the EC on 18 July of the quantities of produce withdrawn in the UK.

The EC will calculate the total of applications across the EU. If the aid would exceed the scheme budget of €210million, it will set a reduction coefficient to be applied to all claims.

Payments to producers must be made by 15 October 2011, but the first payments are planned to commence late in July.

Full guidance is available on the RPA website, together with the notification form for growers to use as part of the procedures.

The scheme differs from the proposal described in my earlier statement in respect of the inclusion of endives and support for green harvesting. Beyond those details, however, it is important to note that that the EU measure we have agreed is no longer based on a possible first-come, first-served basis, but provides for claims for aid to be treated equitably across all member states. It is not possible at this stage to judge whether the scheme will reach the budget ceiling but if it did, any reduction would be applied at the same rate to all claims. Moreover, as I set out above, the scheme we are implementing will also be open to all growers whether or not they are a member of a producer organisation.

I welcome the measure as a contribution to restoring the normal operation of the market and bringing to an end a situation in which UK growers, at the peak of their season for these crops, are facing huge commercial challenges and financial threats not related to the competitiveness or quality of their produce but as a consequence of a crisis for which they cannot be blamed. The E. coli outbreak hit consumer confidence and reduced demand and led to the imposition of trade barriers by Russia and other countries, with the damaging consequences for our wholesale markets in particular which I have described to the House. It is unfortunate that despite accurate reports that an agreement had been made to lift the Russian ban, this was subject to a certification process, which has yet to be agreed, so de facto the ban remains in place.

While the newly launched scheme does not address all the aspirations that have been raised, in particular, for full retrospective compensation for losses nor measures for the wider supply chain, I believe that it does represent practical and substantial help for growers and a viable route to reduce and undo the disruption to markets, by, for example, reducing the flow into our wholesale markets of surplus produce from other member states, as well as the immediate impacts here.

The contribution by EU taxpayers via funds which were already part of the European agriculture guarantee fund (common agricultural policy) existing budget, will thus help to restore the functioning of the market.

My understanding is that UK consumers have continued to support UK produce and I hope they will continue to do so. We will continue to work with growers and their organisations to deliver the benefits intended by this scheme and to move the industry on to a more stable situation in which quality and competitiveness will deliver the success it deserves.