Bloomberg News

EU May Add to Proposed $220 Million Aid Package for Farmers

June 07, 2011

(Updates with possible new proposal from first paragraph.)

June 7 (Bloomberg) -- The European Commission may make an “improved proposal” for aid to vegetable growers faced with slumping demand following a deadly outbreak of E. coli in Germany after some member states balked at an initial offer of 150 million euros ($220 million).

The commission, the European Union’s regulatory arm, may set out the revised proposal as early as tomorrow following objections to the level and total amount of support, EU Agriculture Commissioner Dacian Ciolos said at a news conference in Luxembourg today. The commission may look again at “the rate of indemnization and the total available envelope,” he said.

EU agriculture ministers were meeting in Luxembourg today to discuss their response to the outbreak, which has killed 23 people and sickened 2,429. As much as 80 percent of vegetables are being destroyed in parts of the EU because there’s no market, Brussels-based farm lobby group Copa-Cogeca said in a report. EU food producers are losing as much as 400 million euros a week from the drop in demand caused by the outbreak, the group said later in a statement.

The EU would offer to pay farmers 30 percent of the average price in June for the past four years for cucumbers, tomatoes and salads that are going unsold because of the crisis, European Commission spokesman Roger Waite had said earlier today.

“We’ll be offering to buy, or pay for the withdrawal, of products that can’t be sold,” Waite said.

Additional Aid

French Agriculture Minister Bruno Le Maire said the amount proposed by the EU was “a first gesture.”

“I think the crisis will continue and we’ll need additional aid,” Le Maire said during a news conference in Luxembourg before Ciolos made his comments. “The 150 million euros are an emergency measure, a welcome measure. Unfortunately the crisis continues, and French growers are losing money day after day.”

Members of producer organizations will receive additional compensation for withdrawn products, Waite said. He said on average 35 percent of EU vegetable growers are members of a producer organization, ranging from fully organized in the Netherlands to 0.4 percent membership in Romania.

“The problem is the roughly two-thirds of European fruit and vegetable growers who are not organized,” Waite said. “Food security is back on the agenda, it’s important to keep our farmers afloat.”

Brussels Meeting

Average EU prices for cucumbers in June from 2007 to 2010 were 479 euros a metric ton, according to Waite. The price for tomatoes was 647 euros a ton, while lettuce prices in June averaged 731 euros a ton in the past four years, he said.

The measure will apply until the end of June and be retroactive to May 26, Waite said. EU agriculture ministers will probably vote on the proposal at a meeting in Brussels on June 14, the commission spokesman said.

Spanish fruit and vegetable producers are losing 225 million euros a week because of the outbreak as demand falls and prices slump, said Jose Maria Pozancos, director general of trade group FEPEX.

In Spain, the producer organization is paying 18 cents a kilogram (2.2 pounds) of cucumbers that are withdrawn from the market to its members, and the EU payments would be on top of that, Waite said. About 32 percent of vegetable growers in the country are members of a producer organization, he said.

--Editors: John Deane, Nicholas Larkin

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


Too Cool for Crisis Management
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus