Fries potato growers receive a total of 50 million

The cabinet has reserved a total of €50 million to compensate growers of French fries for the damage caused by the corona crisis. The compensation amounts to 40% of the average market value of chips potatoes over the period from September 2019 to February 2020.

Agriculture Minister Carola Schouten announced this this evening (Wednesday). The compensation applies to chips potatoes for which there is no longer a destination due to the drop in demand on the chips market, including the closure of the catering industry. According to BO Akkerbouw, there are approximately 1.500 growers who are specialized in the long storage of potatoes. According to the trade association, they still have an estimated 1,5 million tons of potatoes in storage, of which approximately 1 million tons cannot be processed regularly.

The compensation is determined on the basis of these 1 million tons of surplus potatoes. Information will follow shortly about the further details and the precise way in which companies can register, the ministry said. RVO will implement the scheme. It is clear, however, that there will be a ceiling in the payment per company to ensure that all companies that make a claim can actually receive support.

On average €5 per 100 kilos
The ministry has not disclosed the average market value it uses or the basis on which it is calculated. That is why we use the average quotation of Potato NL ourselves. In the period between September 1, 2019 and March 1, 2020, the average PotatoNL quotation (category 1 chips potatoes) was €13,85 per 100 kilos. A total budget of €50 million is almost 40% of this value. This means that the ministry will allocate €100 for 5 kilos of potatoes, where the DCA PAT Index during this period is €1,50.

BO Akkerbouw estimates the total damage for growers at approximately €150 to €200 million, including all additional costs. This means that the 1.500 entrepreneurs still have to cough up a total of about €100 to €150 million as a result of the corona virus. In addition, it will of course always remain unclear what the price trend would have been like in the last months of a normal sales season of the 2020 harvest.

Small part of bigger package
The scheme for potato chip cultivation is a small part of a larger package of financial support for floriculture and food horticulture in particular. Minister Schouten is allocating €600 million for compensation in these sectors. In addition, the first 30% loss of turnover is for the entrepreneurs and the government compensates a significant part of the remaining 70% of the damage. "With these arrangements, we enable many companies to absorb the biggest blows," Schouten said in a statement.

The difference in ratio in terms of payment is not explained in concrete terms, but it is reported that the horticulture sector is dealing with 'substantial declines in turnover, whereby the sector cannot simply stop cultivation and harvest. As a result, companies have to deal with ongoing fixed costs, but also ongoing production costs.' Schouten explains in an explanation: "You cannot stop growing crops. In addition, the companies have to deal with products that do not have a long shelf life and that are difficult or impossible to process. And there are companies that use products in March, April and May. a peak turnover."

Emergency measures welcome
BO Akkerbouw is positive about the support from the cabinet, director André Hoogendijk reports in a statement. "With this scheme, the cabinet is extending a hand to support growers and combat food waste. We are working with the Ministry of Agriculture, Nature and Food Quality to develop the scheme, so that the sector can use it as soon as possible and the potatoes can be processed as well as possible."

LTO Nederland says in a response that the emergency measures of the cabinet are 'very welcome' for the farmers and horticulturists most affected. "Minister Schouten is aware of the terrible impact that the crisis has on our members. At the same time, the harsh reality remains that the problems for many companies are of such magnitude that they have not yet been solved," explains Marc Calon, chairman of LTO Netherlands.

Rabobank also attributes part of the success to itself in a statement. The scheme provides the floriculture sector with a tax relief, according to the bank, this also applies to the chip potato cultivation sector. Carin van Huët, director of Food and Agri Nederland at Rabobank: “We can only assess afterwards whether the fire has finally been extinguished. For now this is a solid result of all our efforts, we will continue to monitor the situation with the industry and the ministry.”

Also looking in the long term
LTO Nederland emphasizes that this compensation should not only be considered for the short term, but also the long term. The consequences of the corona crisis threaten to completely unbalance markets, causing problems in all agricultural sectors.

According to the organization, other measures must also be taken in a European context. "There is intensive contact with Minister Schouten and the European Commission to make maximum use of the possibilities offered by the Common Agricultural Policy when necessary. This can be done, for example, in the form of purchase arrangements and private storage of dairy or meat", LTO reports. .

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