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Written Statement - Emergency Supply for Fruit and Vegetable Sector

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Alun Davies, Deputy Minister for Agriculture, Food Fisheries and European Programmes

The E-coli outbreak in Germany has had a profoundly disruptive effect on the EU fresh produce market. Premature statements in Germany blaming Spanish cucumbers damaged the confidence of EU consumers and caused the Russian Federation to ban imports of EU produce.  Russia normally takes about 35% of EU exported production.  Although UK consumption of home produce has held up, there has been an impact on wholesale markets as surplus EU produce has been diverted here at low prices.  UK growers have experienced difficulty with surplus produce building up.

On 7 June the Commission announced proposals for emergency measures to support growers, to be funded from within existing CAP provision.  A draft Regulation was put to the Management Committee that day, then almost immediately amended to increase the budget ceiling. The Regulation has since been agreed and came into force on 18 June.  The application window is short with a deadline of 30 June.  The scheme, worth €210 million across the EU, will compensate growers of tomatoes, lettuce, endives, cucumbers, sweet peppers or courgettes whose produce has been withdrawn from sale or has not been harvested.  If the total aid applied for across the EU exceeds the budget, the EC will reduce the claims payable in proportion (in the same ratio across all Member States).

Withdrawals are to be implemented via Producer Organisations but in countries such as Wales without Producer Organisations, growers can apply directly to the scheme.

Any products notified for withdrawal by individual applicants will be subject to checks, which may be unannounced.  Checks will include ensuring marketing standards are met, weighing and sampling, and will cover produce in the field as well as harvested produce.  Produce will need to be retained for inspection until 6pm of the next working day following notification.

The Welsh Government has been engaged in discussions with Defra and with the industry sector which strongly backs the scheme as an essential response to the market disruption.  This is the peak of the production season for UK salad crops and produce is being disposed of as surplus in significant volumes.  We have been advised of £300k of UK cucumbers being wasted last week and the NFU estimate losses in the salad sector running at [around £1m a week].  The EC withdrawal measure offers the prospect of reducing the flows of surplus produce from other Member States to the UK market.

There are limitations; growers are disappointed that there will be no support for market losses they have suffered through the reduced prices they have been achieving up until the launch of the scheme. Others in the supply chain such as importers represented by the Fresh Produce Consortium, are angry that there is no financial help for them.

This scheme is essential to address immediate serious financial problems and to avoid the risk of competitors in other member States gaining aid not available here.  Rapid implementation was essential if our growers are not to be further disadvantaged.  The scheme will have practicable helpful impact in clearing stocks and should help to restore normality to the market. 

Due to the tight timescales involved in the compensation scheme, I have given the UK Minister permission to implement the scheme in Wales through the Rural Payments Agency.  I urge all producers of salad vegetables who have been affected by the E-coli outbreak to consider the compensation scheme as quickly as possible by visiting the RPA website. As this is an emergency measure, the scheme is only open until the end of June, so swift action is essential.