Review of EU subsidies in the fruit and vegetable sector

Review of EU subsidies in the fruit and vegetable sector Although the fruit and vegetable sector is not formally part of the CAP mid-term review, it is proposed to replace the current system of support through producer organisations and export refunds with an annual flat-rate payment of €100 per hectare for a maximum guaranteed area of 800,000 hectares, divided into national guaranteed areas. This could be topped up by an annual maximum amount of €109 per hectare by member states. This USDA briefing points out that since the start of marketing year 2000/01 aid for fruit and vegetables intended for processing have been paid directly to the producer organisations and no longer to the processors and that as a consequence the new arrangements have made the fixing of a minimum price obsolete. In 2003 production aid to processed tomatoes is set at €279 million a 25% increase over 2001, while aid for processing fruit-based products is set at €86 million, a 21% increase over 2001, and aid for citrus fruit is set at €249 million, a 46.5% increase over 2001. It should be noted that fruit processors may also be eligible for support under EU rural-development programmes. However these programmes are non-product specific and it is therefore impossible to determine the level of support being extended to specific types of processors under these programmes. The briefing also notes that fruit and vegetable grower may also benefit from member states' aid measures (e.g. the greenhouse sector in the Netherlands). The EU also grants financial support for the promotion of EU agricultural products, including fruit and vegetables on the internal market and third-country markets, with such promotional measures being part-financed by the EU (50%), part by the member states (20%) and part by the producer organisation (30%). Comment: The current trends in the fruit and vegetable sector exemplify the low-profile nature of many aspects of the CAP and the extent of the fallacy which claims that reform results in lower levels of public-sector support.Review of EU subsidies in the fruit and vegetable sector ..