Chaos reigns in the chip potato and feed sector, because the rules regarding the implementation of the compensation scheme seem to have changed. RVO has announced that the compensation for chip potato growers will be deducted from the financial supplement provided by processors.
The Netherlands Enterprise Agency (RVO) hereby supplements the previous one conditions presented that apply to chip potato growers who want to qualify for compensation. On Boerderij, RVO announces that a grower is not eligible for compensation if a processor makes up the difference between the compensation payment (maximum 6 cents per kilo) and the contract price.
This addition comes as a bolt from the blue for many growers and processors. Especially now that sales of the surplus of French fries potatoes are starting and many potatoes now have an alternative destination, such as animal feed.
It was unclear for a long time whether growers would lose the right to compensation if they terminated contracts for the 2019 harvest. It now appears that financial compensation from processors is deducted from compensation by the government. In practice, this means that growers who have made such agreements with processors cannot claim compensation.
Terminate contracts
A possibility that now threatens to arise is that potato processors will invoke force majeure due to the corona crisis. This allows the contracts with the growers to be terminated, after which the grower can claim the 6 cents per kilo compensation. However, there is no longer a joint scheme, which means that a grower is in danger of being further affected by the adjustment of the scheme.
VAVI, the association of potato processors, is surprised by this new addition and reports that members have acted in accordance with the compensation scheme published in the Government Gazette. According to VAVI, the situation that has arisen does not do justice to the surplus situation and creates unnecessary unrest in the potato chain.