Background and Policy Objectives
3.The Common Organisation of the Markets in Agricultural Products (CMO) was part of the Common Agriculture Policy that governed UK agricultural support as a member of the European Union (EU). The CMO encouraged cooperation through Producer Organisations (POs), provided market-support tools and aid schemes for certain sectors, laid down common marketing standards for certain products, and set out specific rules on competition and trade. The UK, including Northern Ireland, continues to operate legacy EU schemes derived from EU CMO legislation.
4.Under the CMO, farmers and growers in a variety of sectors are incentivised to come together to form POs to strengthen their position in the supply chain and increase competitiveness. POs also provide a mechanism for promoting environmentally sound cultivation practices and production techniques, and climate change mitigation. When the UK left the EU in January 2020, the European Union (Withdrawal) Act 2018 converted EU law into UK domestic law, including the CMO legislation. This provided a smooth transition after the UK’s exit from the EU and was referred to as Retained EU Law, until it was preserved into domestic law at the end of 2023 as ‘assimilated law’ by the Retained EU Law (Revocation and Reform) Act 2023.
5.While POs can be formed in a range of sectors, financial assistance is available to POs through the Fruit and Vegetable Aid Scheme (FVAS). Financial assistance is payable to horticulture POs that submit an operational programme that meets FVAS regulatory requirements and fits within the UK Strategy and Environmental Framework. Operational funds are part financed by contributions from PO members.
6.As a legacy of the scheme stemming from the EU, when it was the EU Commission that provided the financial support to POs, there has been an ongoing legal obligation for the Department to match fund eligible claims under the assimilated law. This has budget implications, given the potential for new 3-year programmes to be submitted for approval for the programming period January 2026 to December 2028. It risks DAERA being unable to meet funding priorities and reduces the scope for the Department to provide support where it provides best value for money and where it best meets local need.
7.In addition, the Department is undertaking post-EU development of agricultural policy, including in relation to support for the horticulture sector and supply chains. However, the Department has limited powers to amend the FVAS legislation to align with new policy as it develops.
8.Separate EU legislation provides for support for agri-food information and promotion for agricultural products (promotion schemes). Under this legislation, not-for-profit organisations apply for EU support for food promotion campaigns, primarily in third countries. The aim is to open new market opportunities for farmers and the wider food industry, help them build their existing businesses and sell their products in an increasingly competitive global marketplace, while delivering jobs and growth. Since the end of EU funding in October 2020, the assimilated version of the legislation has applied here. While there are currently no active programmes under the assimilated promotions legislation in Northern Ireland, the Department has again limited powers to amend this legislation to allow promotion schemes to be tailored to specific local needs.
9.Therefore, the policy aim of the Act is to make FVAS funding discretionary prior to the end of 2025, in order that support can be prioritised and used where it best provides value for money and best meets specific local needs. A further aim is to provide the Department with the scope to amend the law governing the FVAS and promotion schemes, so that they can reflect on-going policy development.
