Brussels, Oct 26 - Europe's farm chief dropped her first hints on Thursday about how she wants to reform the EU's fruit and vegetable industry, with ideas on rechannelling 1.5 billion euros ($1.89 billion) in annual subsidies.
Speaking to EU lawmakers in Strasbourg, EU Agriculture Commissioner Mariann Fischer Boel revealed her dissatisfaction with the growing power of supermarkets and large retailers.
"I see a sector under pressure. High levels of concentration among retailers and discount chains have enabled these to assume a leading role in the determination of market prices," she said.
"Increasing competitive pressure from third country imports is only making matters worse," she said, adding that EU products intended for processing were fighting for market share against major suppliers in Brazil and China.
In May, the Commission said in an internal paper that large supermarkets could buy at very competitive rates and impose product specifications whose cost was often passed onto smaller farmers.
SOME SUBSIDIES TO BE SCRAPPED
Producer organisations, or POs, are the cornerstone of EU policy and the direct recipient of subsidies to fund marketing operations on behalf of smaller farmers. They can also withdraw perishable produce from the market if it is not selling well.
But the number of producers that marketed their products through POs was disappointingly low, Fischer Boel said.
"Rather than giving up this approach, I want to reinforce it. We cannot afford to give up on our producer organisations," she said. "We will therefore put forward ideas to make these producer organisations even more attractive."
Fischer Boel said some complexities of the EU's fruit and vegetable subsidy regime would probably have to be scrapped, and hinted that the basis for subsidies could be put into single payment scheme in use in much of EU farm policy.
"One thing however will be sure. Some parts of our current fruits and vegetables CMO (policy) are no longer compatible with the reformed CAP (Common Agricultural Policy)," she said.
"The production support schemes that we know from the CMO for processed fruit and vegetables are one such example. This cannot continue," she said.
In some EU countries, fruit and vegetables account for more than a quarter of total farm output. The sector is important for Greece, Spain and Portugal -- where it represents at least 30 percent of agricultural production -- and in Italy and Malta.
Fischer Boel should publish her reform proposal in December or January to overhaul a policy last revised in 2001. It would contain measures to boost consumption of fruit and vegetables as part of the EU's campaign for healthier diets, she said.