The contours of Minister Schouten's emergency support package for chips potatoes, also known as the €100.000 scheme, are becoming clearer. The potato sector is eagerly looking forward to the way in which Schouten will make the promised €50 million available to the affected potato growers.
Just think: in less than 8 weeks, the average market price of French fries potatoes has dropped dramatically from an average of almost €16,00 (PotatoNL Cat.1 of February 7) to an average of €2,00 in week 16. The reason is now known. : the drop in demand due to the corona crisis. The government's main argument for coming up with a settlement is that the implosion of the market price could not be prevented.
Fraud is lurking
How does the intended amount end up in the pockets of growers? That will be a difficult story, especially with a view to control. In that sense, fraud is lurking. As announced, affected potato growers will be compensated based on 40% of the average market price for the period September 2019 and up to and including February 2020.
Based on the average PotatoNL quotation (Cat 1) over the period in question (€13,85), you arrive at €40 in accordance with the scheme with 5,54%. If growers still have to settle potatoes with their buyer during the period when the market is in free fall (early March), they will be compensated up to €5,54. So suppose: a grower delivers his potatoes (free and/or co-delivery) in week 18 and is paid €1,50 (feed price), then compensation of €4,04 will be made via the RVO. A calculation must also be made for Arctic potatoes.
Maximum amount
Why are we talking about the '100.000 euro scheme'? Is that the maximum amount that can be paid out? The answer to that is basically: 'yes'. The Dutch government is allowed to grant €100.000 in state aid to companies in certain sectors without permission from Brussels and the latter has happened (without permission). If growers still have to deliver 4.000 tons of potatoes, the last 1.500 tons will fall outside the scheme.
The above elaboration is a blueprint on how the scheme will be developed. It must be taken into account that things will still be worked out differently if this is now estimated. The fact is that this is a financial compensation and that the volume of potatoes still has to be eliminated. This certainly also applies to neighboring countries, where no compensation schemes for potato growers are currently in the pipeline.