Fruit and vegetable growers are quitting the groups meant to strengthen their hand against supermarkets. Membership has fallen by 39 per cent since 2012, despite EU support of over €1bn a year. The money modernises farms, auditors find, but leaves growers too weak to bargain with retailers.
The EU supports its 1,488 producer organisations with over €1bn in financial aid a year. They are meant to bring efficiency, reduce costs, improve logistics and increase farmers’ access to markets. However, according to the European Court of Auditors (ECA), producer organisations are on the decline, less and less appealing to farmers. They remain too weak to counterbalance the bargaining power of large purchasers in most countries.
The report comes at a tricky time for EU agriculture. Farmers across Europe have argued that they are now faced with increased costs, shifting demand and an unstable market, yet the large supermarkets still have the main power in the food chain. Producer organisations are meant to offer a solution. The principle is quite straightforward: farmers should not be left to face the market alone.
Help without real power
The EU had 1,488 recognised fruit and vegetable producer organisations in 2024, with 187,372 members. These groups can also group together into ‘associations of producer organisations’, of which 69 were recognised by the EU that year.
In 2023, producer organisations received €1.06bn in EU support. The funding is used for operational programmes covering equipment, automation, energy and water savings, quality certificates, packaging, storage, logistics, promotion and market planning.
The auditors found this support effective and beneficial for organisations, helping them to update, cut costs and enhance turnover. It also provides services to farmers that would normally be beyond their resources or ability to manage on an individual basis. But the Court finds that the policy has not strengthened most producer organisations enough for them to negotiate with retailers on equal terms.
Keit Pentus-Rosimannus, ECA Member in charge of the audit, said: “If producer organisations are to help farmers to stand up to large buyers and provide consumers with a wide variety of European fruit and vegetables, the rules must be simpler, national support more consistent, and membership more attractive.”
A shrinking membership base
The most alarming result is not just that producer organisations are still weak, but that fewer farmers are willing to become members. The number of farmers belonging to producer organisations fell from 312,823 in 2012 to 191,310 in 2023. That is a drop of 39 per cent. The organisational rate, meaning the share of production marketed through producer organisations, has slipped too. The ECA calculated it at 42 per cent in 2023, down from 43.6 per cent in 2012.
Producer organisations are only effective when they centralise supply, commit to certain volumes and provide buyers with a single point of contact. Where membership drops, so will their bargaining power.
The auditors accept that part of the decline relates to wider structural issues affecting agriculture in general, notably the downward trend in numbers of fruit and vegetable farms, and a lack of generational renewal. But producer organisation membership has declined faster than the sector as a whole. Between 2013 and 2020, membership fell by 29 per cent, while the number of fruit and vegetable holdings fell by only 14 per cent.
Retailers still hold the upper hand
Many of the bigger producer organisations can negotiate from a position of strength as they can supply larger quantities, a wider range of products and longer delivery periods than the average individual producer. But in most EU member states, producer organisations are too small or little known to have such a foothold. Belgium and the Netherlands are the only exceptions. The ECA found these two states are where producer organisations are, for the most part, economically significant.
The gap is also structural. Fruit and vegetables are perishable products. Growers cannot hold out for better prices when berries, tomatoes or other fresh produce could spoil within days. By contrast, retailing is extremely concentrated.
The report highlights sharp contrasts. In several European retail markets, the four biggest stores make up between 30 per cent and 70 per cent of total retail turnover. In the six member states which together produce three-quarters of the EU’s fruit and vegetables, the four biggest producer organisations in every country represent only between 1 per cent and 13 per cent of the national output. Even the largest, most established producer organisations therefore remain small next to retail giants.
A known problem, no real fix
The ECA states that the Commission has identified numerous weaknesses of the sector, but none of them has been addressed by changes to the legal framework. Policy on producer organisations in the EU has remained virtually unchanged since 1996 even though the position of producers, traders and retailers has changed significantly in the intervening period. The logic remains the same: group supply to respond to concentrated demand.
The problem is that the framework does not set clear national objectives for how organised the sector should become. Nor does it define whether supply should be concentrated through many smaller organisations or fewer larger ones. The auditors also criticise the complexity of the rules. Co-financing rates, ceilings and spending requirements all vary depending on the type and size of organisation.
The 80 per cent funding rate for environmental and research actions can be a financial risk rather than a benefit, the report says. Organisations may have to repay the aid if they fail to meet strict conditions. For smaller organisations, that complexity can be enough to discourage participation.
Three fixes on the table
The ECA makes three main recommendations. First, it wants the Commission to help member states compare how they apply the policy, including recognition criteria and eligible actions. Second, it calls on Brussels to work with member states to make producer organisation membership more attractive, where needed, without distorting the single market.
Third, it urges the Commission to simplify co-financing rates by setting clearer fixed rates by objective and removing links between rates and compulsory expenditure levels. These recommendations will feed into the wider debate over the future common agricultural policy and the 2028–2034 EU budget.
A test of farmer power
The audit does not claim that producer organisations are a complete failure. Far from it: it shows they help farmers cut costs, modernise farms, improve quality and reach consumers. The difficulty is that this does not necessarily give them market power.
If the EU wants growers to take a fairer cut of the value chain, funding alone will not be enough.
EU funding helps growers invest in more efficient machinery, save energy, develop packing techniques and design labels. It makes them more efficient and better organised. But it has not yet helped most of them become powerful enough to challenge large retailers.
That is the key political message from the report. If the EU wants growers to take a fairer cut of the value chain, funding alone will not be enough. It must make producer organisations easier to join, stronger and more appealing to new members. Otherwise, they will remain useful for modernising farms but too weak to shift the balance of power in Europe’s fruit and vegetable markets.
