EXTEND THE BENEFITS

Producer Organisations have generated significant investment support for some growers. Now the scheme is being reviewed, what should the future look like?

Words by: Spence Gunn

The availability of match-funding for investments aimed at boosting productivity or assisting in collaborative marketing has been a key attraction for growers belonging to the 33 cooperative groups supported by the Producer Organisation (PO) scheme.

The grants that they receive have come via the EU Fruit and Vegetable Aid Scheme, due to be replaced in 2023 as part of the UK’s post-Brexit agriculture policy.

The recent announcement that funding would be maintained, to avoid any gaps opening up before the transition, may have been welcome, but growers, including those currently outside a PO but who would like to access similar support, are disappointed at the lack of progress in establishing an alternative mechanism.

“We’ve been in regular discussion with Defra about what should replace the current scheme and how it could be designed so more growers could benefit,” says NFU chief horticulture and potatoes adviser Lee Abbey.

“We have highlighted the importance of a dedicated scheme for our sector, rather than trying to fit horticulture into other mechanisms being designed for agriculture.”

The fruit sectors, in particular, embraced the PO scheme from when it was launched in the late 1990s. “It has driven the success of both the tree and soft fruit industries, accelerating the uptake, for example, of more productive growing systems such as table-top strawberries and fruit-wall orchards, as well as marketing,” says NFU Horticulture and Potatoes Board chair Ali Capper.

“Any future scheme should keep hold of the best elements of the current one, especially the match-funding, and encouragement for collaboration, investment and innovation. But that support should be made available to all business models, not just those in a formal PO; and to sectors currently excluded, notably potatoes, ornamentals and hops.”

The new scheme has to be better funded and less bureaucratic, too, points out Jack Ward, chairman of the British Growers Association, which administers seven POs.

“There is a case for a radical rethink,” he says. “The match-funding element is key to keep; it makes sure both growers and government have a

Carrot grower Martin Evans, chief executive and director of the Freshgro PO, says any future scheme must have an ‘enabling’ culture, rather than a bureaucracy that seems to put up barriers.

“Collaboration has been a key element for us,” he says. “There needs to be more joined-up thinking among suppliers. A future scheme should build on what we already have and get us to the next level of efficiency.

“POs have also helped growers to develop other business structures than the family farm.”

As well as technical development, he says a new scheme should support ‘concentration of supply’, better marketing and ways to educate the public more effectively about produce.

stake in investing in horticulture.

“Linking support to investment programmes of three to five years is also right. Growers need both flexibility and predictability.

“Other forms of grant exist but

depend on having a project virtually ready to go at the point when the funding round is announced. That doesn’t work for most growers.”

If a scheme is made available to all growers, and with fresh produce now a £2.3 billion industry, match-funding at the current rate could bring in as much as £100m of support for investment in sustainability, robotics, and other technology, he suggests.

NFU Potato Forum chair Alex Godfrey, whose business includes a pea production enterprise which is a member of a PO, says the potato sector shares plenty of characteristics with field vegetables so should be included in any mechanism that replaces producer organisations. He wants it open to all types of business, too.

“There are some good reasons to encourage greater collaboration, and being in a PO works very well for our pea business,” he says.

“But if a co-operative model is right for a particular group of businesses, then it should justify itself whether or not it receives specific financial support. What’s important for our sector is to have the same access as others to a mechanism that allows us to leverage investment funds.”

Martin Emmett says the ornamentals sector, which he represents on the NFU Horticulture and Potatoes Board, has really missed out by being excluded from the existing scheme. “There are already nurseries working together in groups, with business models that would qualify as a PO in all other respects, who would really have benefited.

“Just as in fruit and veg, that support would have helped both in terms of investment to improve productivity and for marketing.

“I think we should keep an open mind as to what specifics a new mechanism might cover. The key thing is to make sure ornamentals are included and don’t miss out again.

“Something that encourages nurseries to work together more is important, as that’s the most effective way to deal with a whole range of challenges too big for individual businesses to tackle alone, from recruitment and training to making ourselves more environmentally and commercially sustainable.

“But it must also be open to individual growers. There are some good reasons why not every business benefits from working collectively.”

Defra is involved in discussions with POs as an ‘evidence-gathering’ exercise to help it shape their replacement.

• A scheme designed around the intensive nature of horticultural cropping systems, rather than one adapted from schemes targeted at arable or livestock agriculture. • Tight margins make match funding vital to support capital investment and to accelerate the uptake of new technology, e.g. for variety development, automation, storage and improvements in yields and sustainability. • A share of the new agriculture support mechanisms that recognises how growth in the sector can underpin a range of national policy aims, as set out in the National Food Strategy. • A wider scope to include ornamentals, potatoes and hops and individual businesses, as well as joint ventures and collaborative groups. • Incentives for collective marketing to strengthen growers’ positions in markets and to help to deliver more stable consumer prices and better continuity of supply. The exemption from competition legislation must continue. • A long-term commitment to enable growers to budget and plan several years ahead. • Growers should be able to self-manage their allocated funds for both short- and long-term investments, and respond to change and new innovations as they appear. • Less administrative burden.

NFU chief horticulture and potatoes adviser

“We’ve been hearing about it since 2016 so growers are anxious to see some progress,” says Mr Ward. “Many people are employed by POs and we need to know what’s coming before some start to move on. There’s a lot of expertise we need to keep hold of.”

POs have helped growers employ “some very good brains”, agrees carrot grower Martin Evans. “There is potential [for the replacement scheme] to make a massive difference,” he says.

“We are currently nowhere near what a really good support mechanism could be capable of.” P