Interview with Freshfel Europe chairman Luc Clerx
What is your assessment of European trade over the past 3 years?
Last year, the European fruit and vegetable trade was confronted with the far reaching implications of the Russian embargo. While Russia, overall, only represented 2% of the total European fresh fruit and vegetable business, its impact was significant because exports to Russia also accounted for around 40% of EU exports to non-EU countries. The sector responded promptly, repositioning itself in other non-EU country markets (Asia, Latin America, North Africa), but also took innovative measures to stimulate consumption in the domestic market. Freshfel and its members were also active in addressing market access hurdles to further open new markets. Overall, while the flow of produce remained stable, the main challenge for many commodities was on prices, which recorded a decline from which they have not yet recovered.
What are the latest possibilities for progress over access, particularly to the US and Asian markets?
Within Freshfel, we are adamant about setting up a new European strategy to facilitate exports. We are convinced that greater coordination under the leadership of the Commission would help to facilitate the opening of a number of markets which currently remain closed or which impose restrictive and excessive barriers, mainly in the SPS (sanitary & phytosanitary) area. A pilot project is currently in place to introduce a system approach for 8 EU member states to export apples and pears to the US. The discussion is hopefully now in its final stage and could govern the framework for exports as of next season. The main objective is to avoid the costly pre-clearance system and have the EU recognized as a single entity. This would avoid having to negotiate market access product by product and member state by member state. The model used for the US could serve as a basis for other destinations, Mexico and Chile being the next two where such a scheme could be tested.
School schemes and promotions: the actions implemented use far less than the available EU funding. How can the sector be mobilised into making full use of it?
The school fruit and vegetable scheme is an important tool that can help to educate young consumers on the taste, texture and diversity of fruit and vegetables. Freshfel has been working actively to keep the system, which at one stage was challenged by the Juncker Commission. Freshfel was successful not only in securing the ongoing availability of the scheme but also in managing to convince the EU to further increase the budget available for the scheme, from €90 million to €150 million, with a view to covering the accompanying measures as well. Usage of the budget was quite high with the €90 million budget, as almost 80% of the available funds were effectively used. Today the level of usage has indeed fallen to 65%, but it is 65% of the increased budget. Consequently more money is effectively being used, as the funds spent on the scheme are now approaching €100 million. As the rules for the accompanying measures become clearer, it is expected that the budget used will continue to increase and will get closer the €150 million available.
With regard to promotion, the fruit and vegetable sector is the main user of the funds available for EU agricultural products. Around a total of €25 million is usually granted for sector projects to support sales in both the domestic and non-EU markets. The EU has now embarked in a reform of its promotion policy, which will progressively come into force next year. The EU wants to focus more on non-EU markets but will also provide a bigger budget. Over time the budget will move from the current €80 million towards a €200 million package for all agricultural products. The new rules are challenging, but this will still represent an excellent opportunity for the sector to get access to budgets to boost the promotion, marketing and image of fresh fruit and vegetables and provide information on them.
Are greater restrictions on access to the EU market envisaged by the Commission or desired by European producers?
The EU has always been an open market and, as a matter of fact, it remains the leading world importer of fruit and vegetables. The EU imports around 12 million tons of fruit and vegetables on a yearly basis. However, the world is rapidly changing and demand in many other regions is growing, particularly in Asia, Africa and Latin America. There is therefore more competition on the world market. As regards access to the EU, a number of factors influence nonEU country exporters’ decisions to export or not export to the EU. The exchange rate is an important factor, so are market demand and prices, and also some market access conditions. EU food safety legislation and European customers’ requirements remain demanding, making the EU market the safest for its consumers. Besides, following multiple instances of non-compliance with the EU plant health legislation (more than 7,000 per year – including close to 2,500 in the fruit and veg sector), the EU is taking action to secure compliance with it. The EU is also reshaping its plant health policy and new rules might apply as of 2018. It is therefore important for suppliers to the EU to take the plant health legislation seriously and implement the necessary corrective measures to remedy possible non-compliance in order to guarantee supply stability.
Any other hot topics?
Stimulating consumption should remain the main priority for the sector. Too many member states consume less than the minimum WHO recommendations and the long term trends are indicating a decline in consumption. Some encouraging signals were noted in the aftermath of the Russian embargo, but need to be confirmed and consolidated. The sector and its produce have numerous advantages for nutrition, the environment and the economy which need to be appreciated better. The sector needs to understand and know its consumers better and needs to build on the pillars of a healthy diet to stimulate consumption. Just increasing consumption by a few grams per capita per day will assist in balancing the market situation better and moving the sector forward with a bright outlook for the coming years.