“Portuguese horticulture needs some salvation,” says Peter Knight, co-owner of Camposol. The group is based in Vila Nova de Milfontes in the south western province of Alentejo, and Knight says it is a good growing region, with good water supply from the Santa Clara dam, 40km inland. “Portugal has a lot to gain as it can fill the seasonal gap in the UK.
“However, Portuguese agriculture is in trouble because of all the subsidies it receives and the government has not been wise with its investments - they need to look closely at infrastructure and production. The Spanish have done a better job,” Knight adds.
But it is not all bad, he says: “The main Spanish growing regions of Murcia and Alicante have had bad weather in the last two years and Portugal has better environmental practices, so many buyers now want to switch to Portuguese produce.”
Portugal has a small, mixed economy with a heavy dependence on foreign trade. Although it is one of the EU15’s poorest members, Portugal has shown economic stability and higher than average growth since joining in 1986, mainly due to a high inflow of EU funding. However, in a growing national economy, agriculture reduced its share of GDP from 5.1 per cent in 1990 to 2.8 per cent in 2001.
The funding has helped Portugal integrate with the rest of the EU, and productivity has been enhanced by investment from multi-national companies, which have set up operations in the country.
One strawberry farm on the southern west coast of the Alentejo has benefited from foreign investment, with a financial injection and new management.
Soft fruit grower Well-Pict Portugal (formally AMS Portugal) has struggled over the 2002-03 period, but is now on track.
“There is still a way to go, but momentum has picked up over the last 12 months and the farm has been transformed. Over the last few seasons, some of the production blocks produced very poor yields and quality,” says managing director Gary Mercer, who moved from WPE Ltd in the UK to take on the overall management of the farm.
“Arriving at the start of a season was never going to be the best time for radical change, but so far improvements have been exponential,” says Mercer. “The remaining Portuguese team has been revitalised under the prospect of new management, and the opportunity to speak their mind and make suggestions has only improved their performance.”
In 2003, berry sales were extended to the Netherlands and the customer base in France was expanded. Mercer says that the farm produced some of the best fruit arriving at the WPE packhouse in Evesham during the winter months.
Under Mercer’s guidance, the farm has been undertaking all the necessary steps needed in order to achieve EurepGAP accreditation, which is actively being implemented with the help of the WPE technical team.
Since 2003, several new varieties have also been trialled: “PS 592 proved to be the best commercial choice, and we are keen to find the best varieties and growing systems to optimise yield per acre,” says Mercer.
The production plans drawn up for 2004 meant the overall number of production blocks decreased. However, the output on this reduced area produced a higher volume of fruit, increasing the profitability of the site. “WPE Portugal is now doing its own marketing and we hope to be in a position to procure more soft fruit varieties for Well-Pict European in the future,” says Mercer.
Camposol also uses technical expertise from the UK on its farms. Currently there are four UK agronomy graduates on site and the company uses the services of David Martins and Associates to advise on crops for the UK market. Although Camposol continues to focus on root crops for export to the northern European markets, and increasingly to the developing Portuguese market, it is reviewing its range.
“The major change from the UK is the supermarket emphasis on price,” says Knight. “Packers in the UK are packing stored UK-grown produce rather than fresh imported produce. At Camposol this has meant we have gone from growing 120 hectares of swede in 2003/04 to 10ha in 2004/05.”
Swede was Camposol’s largest crop, but with the reduction in production, carrots are now the biggest at 2,000 tonnes followed by beetroot (1,500t) and parsnips (300t). “Now we are looking to new produce and developing produce such as radish, butternut squash and sweet potatoes for the UK. Demand is growing for different lines as the UK’s supermarket customers become more aware of new produce. But it is a shame that consumers are shopping on price rather than quality,” says Knight.
A new opportunity for Camposol is the increasing presence of supermarkets in Portugal. “This is a new market for us. However, the Portuguese retailers are 10-15 years behind the UK market and don’t have the buying power yet,” Knight adds.
Vitacress’ production and technical manager Dr Steve Rothwell also says the Iberian prepared market is rapidly growing because of supermarket expansion.
Local sales now account for 15 per cent of the business and are growing rapidly, he says. “Consequently this change in the local market will favour the bigger producers who are EurepGAP compliant. This is likely to change the local growing base over the next couple of years.”
Vitacress Portugal is focused on the production of baby leaf salads, watercress and loose skin potatoes. The growing operations contain 180ha of micro sprinkler-irrigated baby leaf salad production, which is spread out over several farms on the south-west coast near Odemira. Two thousand tonnes of several salad products are produced over the year, such as spinach, lettuce, rocket and herbs.
The Portuguese operation supplies 40 per cent of Vitacress’ raw material intake. Two years ago, €6 million was invested in a new high specification packing facility to supply retail chains on the Iberian Peninsula. Rothwell says: “Today we cover 90 per cent of the Portuguese market and plan to make our first sales into Spain in February.
“We supply Sainsbury’s and Marks & Spencer year-round with salads and we want to become less reliant on buying from the UK. So we are in the process of buying a new farm to increase capacity. In 2004 we completed the last stage of the site expansion by 10 per cent and we can increase by another 20 per cent as demand grows,” says Knight.
In the Algarve, west of Faro, 12ha of watercress are grown. “Watercress production has been extended by 2ha to accommodate the rising demand and reduce our reliance on the US,” says Rothwell. “We are also finalising planning to expand another site at the moment.”
In the same area, around 300ha of loose skin baby potatoes are grown from October to May, exclusively for M&S in the UK and the Iberian market.
Vitacress’ Rothwell says: “We have entered into a joint venture with the forestry Commission to clear some 1,000ha of woodland that is old and the commission cannot afford to replant.
“Vitacress will clear the land and establish an irrigation system. The initial idea is to grow potatoes on the soil for four to five years, after which we will plant new pine trees and return it to the commission.”
There are over 50 fresh produce grower associations in Portugal, but the majority are fragmented. However, the National Association for Rocha Pears (ANP) has been the exception with a successful export campaign and global recognition of the protected pear.
This season’s Rocha pear campaign has been one of the best yet, says Patricia Vaz, secretary general of ANP. “Despite being a good year with volumes reaching 160,000t, the growers have put in a lot of effort and dedication, and the pears are of good quality,” she says.
This season’s exports have gone to three main markets - the UK, Brazil and Russia - with export volumes to mid-January at 26,040t. And because both the quality and quantities this season have been good, Portuguese Rocha pears will be available in UK supermarkets until the end of April. Fruit that has been stored in controlled atmosphere stores will begin to hit the market at the beginning of February.
The ANP has several local and international promotional projects in the pipeline for the coming months. Vaz explains: “The ‘Fruit of all Flavours’ campaign is essentially to promote the consumption of fruit in schools, similar to the UK’s FIVE A DAY. In February we will be at Fruit Logistica in Berlin, because it is important for Portugal to be present at the international fairs. It is a way of demonstrating Portugal’s high-quality products, in our case the Rocha pear,” says Vaz.
Some of the successful Rocha pear growers/exporters have also branched out into other produce. Luis Vicente Lda is a company with 40 years experience in the distribution and import and export of fruit and vegetables. “Although pears are our main product, we distribute 50,000t of fresh produce. Since 2000, we have invested €5m into the business to diversify our offer and increase our acreage to grow quality produce,” says commercial director, Manuel Chaves. Their 235ha of farms are spread out in the Oeste and Alentejo regions.
The newest farms in Ferreira do Alentejo have plum plantations, which supply Tesco, as well as 2,000t of peach and nectarines, destined for the UK market for the first time this year. Chaves says: “We plan to increase our acreage in the coming years. The UK is important to us as a buyer so we are very focused on quality and traceability.”
Likewise, Granfer co-operative in Obidos mainly exports Rocha pears to the UK, but in the past few years has also added peaches (for supermarkets) and apples (for the School Fruit and Vegetable Scheme) to its export portfolio. The co-operative of 36 producers has 200ha of pear production, 60ha of Royal Gala production and 57ha dedicated to growing peaches and nectarines.
“This season our pear volumes are up to 7,000t and apples volumes will range from 2,500-3,000t,” says joint director Helio Ferreira. “Since 2002 we have exported apples for the UK’s school programme. We grow Royal Gala and Mundial Gala apples. Initially we sent 300t but in 2004, we exported 1,000t in 1kg bags or as punnets. Our apples are sought after because of their size, juiciness and high brix levels (16 per cent).”
Due to a legacy of low agricultural investment, farming is the most backward sector of the economy and crop yields are below the EU average. Portugal’s average agricultural output per hectare is €1,602 per hectare vs €2,205 per hectare for the rest of the EU. The EU’s Common Agricultural Policy (CAP) has been the basis for agricultural development in Portugal and both investment and productivity have risen under the CAP.
In July 2002, the EU unveiled proposals to reform CAP, including removing the link between subsidies and production, increasing regional development aid and limiting CAP spending. However the proposals are unpopular with the Portuguese government, which fears there will be a reduction in subsidies to the country’s farms.
The issue of reform changes to subsidies doesn’t affect Agroboletas Lda, a small mushroom procurer, which has never received any government subsidies. Agroboletas is based in the central province of Ribatejo and is owned by Luis Soldado. He has been sourcing wild Portuguese mushrooms for 20 years, and has built up a national network of suppliers. “It has been a difficult year for several reasons; we currently have a drought which results in low yields. Adding to that, there is also stronger competition from Eastern European countries, Lithuania and China. They have similar products at lower prices which I can’t compete with,” he says.
The local demand for wild mushrooms is low, says Soldado, with consumers preferring cultivated champignons: “This season’s prices have been good because of the low availability, but our labour costs are higher in comparison to the newer players. I would like to expand my customer base - I get calls from buyers in the UK, but since there isn’t an English speaker within our operations, I have never developed any relationships there.”
Rothwell says that growing fresh produce in Portugal has many advantages: “The weather is a real plus for growing our produce. From October to December and March to May temperatures are cooler than in Spain and allow us to bridge the gap in the baby leaf category. Water supply is plentiful and at a low cost. As a group, our strategic position is to strengthen our core supply base, i.e. Portugal, Kenya, Spain and the UK, and rely less on the US for produce.
“Portugal has transformed since joining the EU and it is easier to operate here commercially, even compared to the UK. Despite labour costs rising four-fold in the last decade, the local workers are reliable and there is a good agricultural local labour pool, unlike the UK.”
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