Funding for fruit and vegetable sellers
How to apply for subsidies and grants if you grow fruit, nuts or vegetables; funding for producer organisations and the industry levy.
Introduction
This guide explains the funding available to growers in the fruit and vegetable sector, including how and where to find more detailed information. It covers the Single Payment Scheme, the Fresh Fruit and Vegetable Aid (Producer Organisation) Scheme and the Area Payment for Nuts Scheme - all administered by the Rural Payments Agency (RPA). You can also find out more about the Rural Development Programme for England, the main funding support mechanism for rural communities and businesses.
The guide sets out the statutory obligations if you are a grower or involved in the selling of horticultural produce, with regard to levies that must be paid. For growers and traders of fresh fruit and vegetables it provides information on how to comply with EU marketing standards.
Finally, this guide tells you where to obtain more information on the fruit and vegetable industry and other forms of support provided by industry groups.
The market for fruit and vegetables
Detailed information about the fruit and vegetable market can be obtained from the Agriculture and Horticulture Development Board (AHDB), covering England, Wales and Scotland. It aims to provide UK fruit and vegetable growers with a range of services to support the industry’s sustainability.
Read about the role of the AHDB on the AHDB website.
You can also find up-to-date information on the various fruit and vegetable sectors on the Horticultural Development Company (HDC) website.
Freshfel Europe - the European Fresh Produce Association - publishes the Freshfel Consumption Monitor, available free of charge to its members, which analyses trends in the production, trade and supply of fresh fruits and vegetables across the EU-27, as well as consumption information in Norway, Switzerland and the USA. Non-members can purchase the 2011 version on the Freshfel website.
Public campaigns for healthier eating in the UK and EU are showing signs of encouraging consumers to eat more fresh fruit and vegetables. However, increased demand does not always benefit the grower. This may be because:
- prices are forced down as supermarket chains strive to increase their market share
- consumer taste is not constant and new demand is often for exotic rather than homegrown varieties - 90% of fruit and 70% of specialist vegetables are being imported to match supply with demand
- the effects of currency fluctuations and in particular the lower value of sterling
Levies payable by growers of horticultural produce
The HDC serves British growers by driving research and development in horticulture and associated technology. The company also sponsors market research and promotion of specific products where there is shown to be a collective need for it.
The HDC is a statutory body which administers the collection of an ‘industry levy’ to fund essential near-market research and development for the benefit of UK horticulture. The levy for most crops is 0.5% of annual turnover, with the exception of the mushroom industry.
You are required to pay the levy if you grow or sell horticultural products, or sell anything derived from horticultural products, and if you have an adjusted sales turnover of £60,000 or more. The levy is calculated by years ending 31 March.
Under the annual AHDB Order, horticultural products include:
- vegetables grown in the open, except potatoes - see the guide on potatoes
- fruit
- flowers and bulbs
- hardy nursery stock
- protected crops and herbs
- mushrooms - these are included, but growers pay on a different basis
Mushroom growers are required to pay the levy if they buy more than 700 litres of mushroom spawn in any given year ending 31 March. This applies to spawn purchased separately or incorporated into compost. The maximum permitted levy rates are 20 pence per litre for agaricus mushrooms and 8 pence per litre for non-agaricus mushrooms.
AHDB levy rates for horticulture 1 April 2010 to 31 March 2011 (exclusive of VAT)
| Sector | 2010/11 levy rate | Higher rate for late payment |
|---|---|---|
| Horticulture (GB) | % sales turnover | % sales turnover |
| Horticulture products | 0.50 | 0.55 |
| Mushroom spawn | Pence per litre | Pence per litre |
| - Agaricus | 8.0 | 8.8 |
| - Non-agaricus | 2.0 | 2.2 |
The Single Payment Scheme for fruit and vegetable growers
As a grower, you can apply for subsidies under the Common Agricultural Policy (CAP) Single Payment Scheme (SPS).
In order to receive the full SPS payments, you must comply with a set of Statutory Management Requirements (SMRs). These relate to areas of public, animal and plant health, environment and animal welfare. You must also demonstrate that you are keeping your land in good agricultural and environmental condition (GAEC). Together, SMRs and GAEC are known as ‘cross compliance’.
All agricultural activities are covered by Cross Compliance and you must comply with the requirements across the whole agricultural area of your holding, regardless of the amount of land you entered into the SPS.
Most of these standards reflect legal requirements that you should already follow.
To apply for payments, you need to fill in an annual SP5 application form, either electronically or as a hard copy. The deadline for applications is usually in May for payments starting 1 December. Find more information on the requirements and standards of Cross Compliance in the guides on Cross Compliance: the basics, SMR and standards of GAEC.
For more information on how the SPS works, see the guide on the SPS.
For technical advice and queries on cross compliance, contact the Cross Compliance Helpline on Telephone: 0845 345 1302.
Read about the SPS on the RPA website.
Producer Organisations on the Fresh Fruit and Vegetables Aid Scheme
To help growers increase their competitiveness in the supply chain, the EU Fruit and Vegetables Regime provides financial support to co-operatives formed by producers, which must meet EU driven criteria and methodology to be recognised as Producer Organisations (POs). POs are legal organisations that require formal recognition by the Rural Payments Agency (RPA), which operates the Scheme. Once a PO is recognised, the members typically work together to obtain EU funding to:
- promote the use of environmentally sound cultivation and waste practices
- ensure that the organisation’s production is planned and adjusted to demand
- promote the concentration of supply
- reduce production costs
- improve the quality, marketing and end value of their produce
- monitor their members’ compliance with EU marketing standards, maximum permitted levels of pesticide residues, and generally keep within plant health requirements
Find the guidance index for fruit and vegetables operational programmes on the RPA website.
Area Payment for Nuts Scheme
Payments for the Area Payment for Nuts Scheme (APNS) are linked to the area of eligible nuts grown. APNS is separate to the SPS, allowing you to make a claim on any nut orchard of a minimum plot size of 0.1 hectares on which you grow nuts that satisfy all the eligibility criteria for that type of nut as set out in the table:
Crop codes and Tariff code ranges for different types of nut
| Type of nut | Tariff code range | Crop code | Minimum tree density per hectare |
|---|---|---|---|
| Almonds | 0802 11 and 0802 12 | NT3 | 50 |
| Hazelnuts or filberts | 0802 21 and 0802 22 | NT1 | 125 |
| Walnuts | 0802 31 and 0802 32 | NT2 | 50 |
| Pistachios | 0802 50 | NT4 | 50 |
| Locust beans (carob pods) | 1212 10 10 | - | 30 |
A ‘nut orchard’ is defined as an unvarying and geographical continuous area which is not divided by other crops or plantations. Isolated nut trees or a single row of nut trees planted alongside roads or other crops are not considered to be an orchard.
Although APNS is not decoupled from the SPS, you will need to use the annual SPS form SPS5 to make your application.
The average payment of €120.75 per hectare will be reduced if the ceiling of the UK’s National Guaranteed Area of 100 hectares is exceeded. The payment will also be reduced by 19% for the combined EU and national modulation.
The scheme rules are described in the latest version of the RPA’s booklet: ‘Single Payment Scheme Handbook and Guidance for England’.
RPA administers a wide range of CAP schemes. Find a list of individual CAP schemes on the RPA website.
Rural Development Programme for England funding
The Rural Development Programme for England (RDPE) aims to safeguard and enhance the rural environment by helping farmers and growers to run sustainable rural businesses and improve the competitiveness of the agricultural and forestry sectors in England.
The RDPE is jointly funded by the EU - through the European Agricultural Fund for Rural Development - and the government. Funds from CAP schemes can also be transferred into the RDPE as part of a process called ‘voluntary modulation’.
The RDPE is structured around four EU objectives for rural development, called ‘Axes’ each of which sets out the type of farming activities eligible for funding:
- Axis 1 - improving the competitiveness of the farming and forestry sectors
- Axis 2 - improving the environment and the countryside
- Axis 3 - improving rural quality of life and diversification of the rural economy
- Axis 4 - the Leader approach
Who to contact
The following organisations offer grants in England under the RDPE:
- the Department for Environment, Food and Rural Affairs (Defra) - by delivering economic and social funding in rural areas under Axes 1 and 3
- Natural England - by offering funding for delivery of Environmental Stewardship agreements under Axis 2
- the Forestry Commission - by offering forestry funding under Axis 1 and 2
- Local Action Groups (LAGS) or the Leader approach under Axis 4
You can find your LAG on the Defra website.
From April 2012 delivery will consist of a single offer, available across the whole of England on consistent lines and with a consistent set of business processes.
Find out more in the guide on the Rural Development Programme for England.
Find out about Natural England funding in the guide on Environmental Stewardship: the basics.
Find out about woodland grants and funding in the guide on trees and woodlands.
Horticultural marketing standards for fresh fruit and vegetables
The EC marketing standards apply to most fresh fruit, vegetables, salad crops, nuts and cultivated mushrooms. These marketing standards are split into two types - Specific Marketing Standards (SMS) and a General Marketing Standard (GMS). SMS apply to 10 products and require classification into quality classes and full labelling, GMS applies to most other types of fresh fruit and vegetables, and requires compliance with a minimum quality standard as well as origin labelling. The Horticultural Marketing Inspectorate (HMI) of the RPA enforces the marketing standards and is responsible for checking produce for GMS and SMS compliance.
For imports of SMS products, notification to import is required, this is done via PEACH (Procedure for Electronic Application for Certificates). SMS apply to the following ten types of fruit and vegetables if they are intended for sale in their natural state:
- fruits - apples, citrus fruit, kiwi fruit, peaches and nectarines, pears, strawberries, table grapes
- vegetables and salads - lettuces, curled-leaved and broad-leaved endives, sweet peppers and tomatoes
However you can use GMS instead of SMS if the produce is sold at retail for customers’ personal use and you label it with the wording ‘intended for processing’ or similar.
If produce is intended for use in industrial processing or as animal feed and is marked as such, it is exempt from the marketing standards.
For imports of GMS products, you do not have to notify the HMI via the PEACH system. However the HMRC (His Majesty’s Revenue and Customs) Chief system does make a 1% random selection of GMS products and requests a PEACH application, but this is only needed if requested by Chief.
Under the GMS, the size and shape of produce is not relevant, but you must ensure that produce meets or exceeds certain standards. In general it must be sound and in fair condition for marketing purposes. You must also label produce to show its country of origin.
If you are a trader in fresh fruit and/or vegetables, any produce that you sell, display or offer for sale, deliver or market must be graded and labelled according to the particular standards that apply to that type of fresh produce.
The RPA helps you comply with the law, but may consider prosecution where traders deliberately or persistently do not meet their obligations.
Read about horticultural marketing standards on the RPA website.
Export procedures for fruit and vegetable farmers
Regulations, charges or other restrictions may apply to agriculture and horticulture exports as they leave the UK and/or when they arrive at their destination country. It is important that you research both sides of the transaction.
First, you need to classify your goods. Using the standardised classification codes for goods makes it easier to check if any restrictions or charges apply. You can use the UK Trade Tariff to find commodity codes to classify import and export goods..
Export of fruit and vegetables
The RPA administers an export refund scheme on added sugar used in the manufacture of certain processed fruit and vegetable products or specific products themselves.
RPA also issues licences, which may be required for the payment of export refunds. If you think you may be eligible for refunds, you should contact RPA for more information.
Further information
RPA Fruit and Vegetable Helpline (Producer Organisation)
0191 226 5491
Natural England Enquiry Service
0845 600 3078
PEACH Helpdesk
0345 607 3224
Defra Helpline
08459 33 55 77
HMRC Tariff Classification Service Enquiry Line
01702 366 077
RPA Helpline
0845 603 7777
Single Payment Scheme information on the Rural Payments Agency website
HDC information on the HDC website
Role of the AHDB on the AHDB website
Download 2011 SPS updates for farmers and growers in England from the RPA website (PDF, 939K)
Find a list of CAP schemes on the RPA website
Detail, procedures, forms and Q&As on the Fruit and Vegetable Aid Scheme on the RPA website
Grants and funding on the Natural England website
Timber industry and woodland grants and funding on the Forestry Commission website
[RDPE news and information]https://www.gov.uk/government/organisations/rural-development-programme-for-england-network)
LAG directory on the RDPE Network website
RDPE grants and support on the RDPE Network website
Horticultural marketing standards on the RPA website
New horticultural marketing standards guidance on the RPA website
Last updated 13 June 2013 + show all updates
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Fixing references to specialist guides
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