Producer Organisations

Producer Organisations ( PO)

Farm business consultantsThe Fruit and Vegetable Regime was introduced in April 1997 throughout the EU as a scheme to help the fruit and vegetable industry become more efficient, more competitive in the supply chain and more environmentally friendly. Today approximately 40 PO’s are operating in the UK and it is reported that these account for an estimated 50% of the turnover of marketed fresh fruit and vegetables in the UK.

Producer Organisations (POs) are effectively "co-operatives" which are recognised under the regime and can qualify for financial assistance towards the cost of a structured plan called an operational programme. The aim of an operational programme is to improve the PO's product quality, environmental performance and skills in marketing. The list of crops covered by the Regime is extensive but certain crops, most notably potatoes, are excluded. To secure recognition a PO must have at least 5 grower members and an annual turnover of at least 1 million Euros (just under £700,000 at current exchange rate). Operational programmes can last for 3 to 5 calendar years. They must be financed in the first instance by an operational fund - an account set up by the PO to hold contributions from its members based on the turnover of products for which recognition has been granted. The programme will comprise both compulsory elements, aimed at improving the business, while employing environmentally sound cultivation practices and the management of waste materials.

EU financial assistance at 50% of approved expenditure 3 is paid directly into the PO's operational fund on a quarterly basis 4. Applications need to be submitted by 15 September for programmes commencing the following January. Within the current regime, POs objectives must include:

  • ensuring that production is planned and adjusted to demand;
  • promoting concentration of supply;
  • reducing production costs; and
  • promoting the use of environmentally sound cultivation and waste practices.

Apart from the obvious benefit of EU funding, recognition of a PO with a successful operational programme is likely to lead to better co-operation between individual growers, a stronger market presence, better product quality, more environmentally friendly practices and an enhanced business performance through group purchasing and marketing. The three steps that a PO must undertake to be considered as a PO by the RPA these are;

  • PO recognition
  • Approval of Operational Programme
  • Set up of centralised Operational Fund bank account and sales and purchasing system.

For more information on PO’s and to discuss their formation and management, contact Robin Turney.