Seeing through the Commission’s proposal for reform of the fruit and vegetable regime could bring health benefits. With the exception of Greece and Italy no EU member state is currently meeting the World Health Organisation’s recommended consumption rate of 400kg per day per capita. From the viewpoint of Commission officials, getting consumption up to the WHO minimum level would also provide a commercial answer to the sector’s marketing problems.
Fruit and vegetable markets are very susceptible to short-term supply and demand crises. These result from both the perishable nature of the product and the susceptibility of both production and consumption to weather conditions. It is hard to underestimate how weather sensitive demand for these product is.
The Commission favours ‘Producer Organisations’ operating their own ‘crisis management’ schemes. This is a rather old style ‘corporatist’ solution which is handicapped by the fact that such organisations do not exist in all member states. In the Netherlands with its extensive glasshouse production sector, 79 per cent of growers are in such organisations. Membership in some accession states is particularly low: 1 per cent in Poland, 3 per cent in Cyprus and 4 per cent in Hungary.
However, some member states have still been upset by the Commission’s far from radical proposals. They are particularly opposed to the idea that 20 per cent of an organisation’s budget should go on environmental measures and that no more than 30 per cent should be spent on crisis management.
The UK uses a retailer led system of category management with a limited number of suppliers to each retailer, although a supplier may organise several growers. I am currently engaged in two research projects related to the horticulture sector and it has to be admitted that this system does produce greater concentration of ownership and production with retailers able to delist suppliers with little warning. However, the solution to those problems might lie in a more robust application of competition policy, something to be discussed in a future post on the dairy sector.