Nov 7 - Europe's farm chief has proposed ending many of the subsidies paid to the EU's fruit and vegetable industry as part of a sweeping reform plan due for publication early next year, documents showed on Tuesday.
EU subsidies for processing fruit and vegetables, as well as export subsidies, would be abolished. Other production subsidies would be decoupled, meaning that the link would be broken between how much a farmer grows and the subsidies received.
Following is a profile of the EU's fruit and vegetable industry, a sector that accounts for around 17 percent of the bloc's total agricultural output:
CABBAGES TO CITRUS
The European Union is a major player in world horticulture and grows a huge range of products, from cabbages and turnips in northern Europe to citrus in Greece.
Its subsidy regime covers dozens of products including nuts, fruits like melons, grapes, pineapples and quinces, and vegetables such as onions, mushrooms, radishes and cucumbers.
The sector is particularly important for Greece, Spain and Portugal, where it accounts for at least 30 percent of farm production, and in Italy and Malta. It is also significant in Belgium, France, Hungary, Poland and the Netherlands.
In terms of volume, Spain and Italy are by far the most important EU fruit and vegetable producers, followed by countries like France and Poland. Greece, Portugal and Germany also have significant fruit and vegetable industries.
EU policy was last reformed in 2001, although the nut regime -- almonds, hazelnuts, walnuts, pistachios and locust beans -- was revised in 2003 as part of a wider agricultural reform.
Since then, much has changed on the supply/demand side, not least the arrival of 10 new producer states in the EU in 2004, especially Poland, Hungary, the Czech Republic and Slovakia.
Poland, for example, is a key player in the global soft fruit industry. It ranks as the world's third largest producer of blueberries and gooseberries, the fourth for raspberries and sour cherries and sixth for strawberries.
However, fruit and vegetable farming in many of the EU's new joiners is often concentrated on smaller farms with not especially high yields -- often lower than in the old EU-15.
For fresh fruit, where EU production fluctuates at around 38 million tonnes a year, the more significant items include apples, peaches, pears and citrus where EU growers face stiff competition from producers like Chile and South Africa.
France and Italy are the world's fifth and sixth largest producers of apples, respectively, for example.
Tomatoes and olives are very significant, particularly in Spain and Italy, and also in France and Poland.
EU vegetable output is some 66 million tonnes a year. While fresh vegetable exports have steadily risen since the 1990s, shipments of processed vegetables have become more significant.
EU'S SUBSIDY REGIME
EU policy distinguishes between subsidies paid for fresh fruit and vegetables, and processed products.
The regime is complex given the large number of different fruits and vegetables grown across 25 countries under very specific conditions.
Special subsidies are granted in a number of areas. Flat-rate payments are available per tonne of tomatoes, peaches and pears destined for processing, subject to annual volume thresholds which, if exceeded, trigger a loss in subsidies.
Extra aids are given for growing grapes to be dried into sultanas and currants, while farmers may also receive special subsidies for producing dried figs and prunes.
The annual budget for the EU's fruit and vegetable policy amounts to around 1.5 billion euros, of which around two-thirds goes on production and processing subsidies. Processing aid is granted at fixed rates per tonne for certain categories of fresh items -- tomatoes, citrus, pears and peaches, for example.
HOW THE SECTOR IS ORGANISED
Much of EU policy revolves around producer organisations (POs) that receive subsidies to set up "operational funds" for marketing operations on behalf of smaller farmers.
Since fruit and vegetable production is unpredictable, POs have the right to withdraw perishable produce from the market -- if items are not selling well, for example -- but must finance withdrawals themselves, albeit with limited EU compensation.
A small surplus that stays on the market for a few weeks can dramatically influence prices during a whole marketing campaign.
Strict rules apply to withdrawn products: they can never return to market, for example. They must also be distributed free of charge for social and charity purposes, distilled, used for animal feed or non-food purposes or destroyed.
Operational funds are financed 50/50 by EU cash and a PO's members. The EU's contribution ceiling is 4.1 pct of the value of total marketed production of each fresh product category, a share that has risen steadily over the past 10 years, while withdrawals/export refund spending has fallen proportionally.
PO numbers and sizes vary widely across the 25-country EU and there are only minimum criteria based on turnover and numbers of members for them to be set up.
There is also leeway to grant complementary aid in regions where Brussels deems that PO numbers are insufficient.
Countries such as Belgium and the Netherlands channel most of their fruit and vegetable production through POs but major producers like France, Spain and Italy use them far less.
Belgium and the Netherlands have the highest PO organisation rate at 70 percent; Portugal has the lowest at 5 percent. Overall PO concentration is stagnating at 30-40 percent rather than the 60 percent that was foreseen in the last sector reform.