Growers worry as Rural Payments Agency suspends funds to producer organisations

Worried growers say that they have been left strapped for cash as a result of the Rural Payment Agency's (RPA's) decision to suspend all payments to producer organisations (POs).

Payments have been suspended to all UK POs while Defra decides on a new policy on the thorny issue of shared facilities. The news was sent by letter from the RPA to all fruit and vegetable POs in the UK earlier this month.

Shared facilities such as packing and marketing have been a bone of contention for a couple of years now as EU authorities have sometimes disapproved of the way that they are interpreted.

It is claimed, for example, that POs have been formed as means for people to get the funds to buy specific items, which are then not shared out with other PO members according to the rules.

The French have just lost their appeal against a multi-million euro fine for failing to comply with the shared facilities rules and the RPA's decision follows the Court of First Instance judgement handed down to the French authorities.

Stephen Francis, managing director at Fen Peas, which operates as a PO in Lincolnshire, said: "The case in France bears no resemblance to what goes on in the UK. They [the Government] worry so much about what goes on abroad."

He added: "Shared pea harvest operations are a perfect example of how everyone has to work together. The machinery we use is so expensive that we have to share it.

"We are in debt until we get some money from the RPA. It's really tough. The decision will affect our cash flow."

Keven Brooks, financial controller at Fruitlink, a Wisbech-based PO for top fruit growers, said: "It's going to have a big effect on our cash flow. We have only put in one claim this year, to the end of July. But a lot of our expenditure is pushed towards the second half of the year when we invest in trees, so it will have a massive impact. I don't know how we will fund everything.

"But I can see reasons behind why the case in France was lost. If there are POs out there that are not allowing use of their facilities to all members, I think they have the right to say 'you are not a proper PO'. All of our facilities are available to our members."

Fresh Produce Consortium chief executive Nigel Jenney said: "These schemes have been in place for many years, therefore this should have been thought out properly by the legislator well before now."

He added: "We trust that the RPA will recognise the hardship it is imposing on companies and will resolve the issue urgently."

Once the new policy is established, the RPA will be checking all POs to see which ones comply with the policy and what measures need to be put in place for those growers who fail to comply.

Defra has a called a meeting of POs next Tuesday (24 November) at Noble House in Smith Square, London. It aims to provide clarification on its decisions and provide an update on the policy as well as a timetable for action.

The RPA told Grower in a statement: "We are currently considering the impact of the judgement. The RPA and Defra are working together to put into place a policy reflecting the judgement and are working to achieve this as quickly as possible in order to minimise the impact on the industry."

Anyone interested in attending the PO meeting next week should email the RPA's fruit and vegetable team in Newcastle at fruit&veg.newcastle@rpa.gsi.gov.uk.

 

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