UK producers have been thrown into crisis waiting for crucial funds from the EU of up to £27 million.
DEFRA and the Rural Payments Agency (RPA) have suspended payments to UK producer organisations (PO) in an effort to save money and hit payment targets.
The RPA confirmed 15 POs have submitted claims for payments and it was working with DEFRA on the issue but the sums are not expected to be paid in the near future.
A number of EU member states have experienced difficulties with the interpretation of EU auditors’ regulations.
EU audits from 2005/6 identified a number of findings and non-compliance, which led to a UK disallowance of £22m. These included recognising POs too early; the existence of virtual Pos and overly complex marketing arrangements that did not meet the scheme aims.
The UK currently has 46 POs, drawing on EU support of around £27m a year. This aid is match funded by the POs and their members.
John Smith, chairman of Northern Mushrooms, said his company was owed £600,000 from the RPA and the delay had caused significant problems for the business, which was now struggling to pay staff.
"How do POs tell their staff that they may or may not get their salaries or that PO suppliers may or may not get paid?" Smith asked. "How easy is it to put capital investment programmes on ice or R&D programmes into some sort of limbo? This is madness, and it has to stop.
"British Producer Organisations should not become the fall guys and scapegoats of the self-seeking pen pushers of Brussels on what appear to be job creation missions or the incompetence of the RPA in Newcastle and London. It is these people who should pay the price of failure, not the POs."
Richard Hirst, chairman of Anglian Pea Growers, added the EU was taking a “guilty until proven innocent” approach and that the problem would “persist until the EU understands how UK POs work”.
Nick Marston: “The fruit and vegetable regime has been very valuable to UK horticulture. It has enabled substantial development of many areas of the UK industry, led by producer organisations. I understand that some UK POs may not meet the EU’s interpretation of the recognition criteria. Given that this has resulted in payments being suspended for all POs, with significant consequences, the RPA needs to clarify the position of individual POs quickly so that everyone knows where they sit.”
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