Ireland’s largest mushroom producer, Commercial Mushroom Producers (CMP) confirmed today it has initiated a High Court action against the Department of Agriculture, Food and the Marine.
It says the case is to ensure Ireland’s mushroom sector does not continue to lose potentially €6m each year in vital EU funding to which it is entitled.
CMP is also seeking compensation for lost funding in recent years. The CMP case says that due to the Department’s incorrect application of the EU’s Fruit & Veg PO scheme, Irish mushroom growers have lost in excess of €12m in funding since 2011.
It says this has resulted in a loss of employment, a stagnation of R&D investment and a loss of competitiveness to other European growers.
Commercial Mushroom Producers is an EU recognised Fruit and Vegetable Producer Organisation representing over 50 mushroom grower businesses.
It is one of only two POs in the country. It had a turnover of €210 million in 2014 and its members support around 3,000 jobs through direct and indirect employment.
CMP supplies more than 50% of all mushrooms sold in the UK retail sector.
CMP fully meets the EU’s requirements to access financial assistance for its members through the EU’s Fruit & Veg PO scheme, which was established to aid small producers across Europe to concentrate supply and gain better terms from the market, bringing better returns and certainty to producers.
The Department of Agriculture, Food and the Marine is the competent authority responsible for administering the EU’s Fruit & Veg PO scheme in Ireland. In 2010 CMP says it received 93% (€5.9m) of the EU funding it was entitled to.
However, it says since 2011 it has only been able to access around 25% of its entitlement, receiving just €2.4m in 2013.
Under the Department’s current approach CMP claims:
- CMP mushroom producers have lost out on approximately 75% of available EU funding since 2011 due to the Department’s incorrect administration of the scheme.
- The sector will continue to lose potentially €6m each year in direct funding.
- CMP mushroom growers have been placed at a considerable competitive disadvantage to their European counterparts. For example, mushroom growers from the UK, Holland and Poland have accessed over 90% of the EU funding available to them while CMP was only able to access approximately 25% of their entitlement.
- A significant number of producers have felt they had no option but to close their businesses and exit the market completely.
- A number of other Irish member producers have already left CMP to join UK based POs.
- The uncertainty of accessibility to funding has severely affected investment in the sector in Ireland, stifling employment and eroding confidence. A major strategic development plan for research and development was mothballed due to uncertainty over funding.
Commenting on the legal challenge, Donal McCarthy, Chief Executive Officer Commercial Mushroom Producers said it has tried and failed to engage with the Department over several years to resolve this serious issue and have been left with no option but to pursue legal action.
“The Department’s dual responsibility is to administer the scheme to develop the sector and to police it to ensure all applicants are compliant.
“For the last five years the Department has engaged in policing, which goes far beyond what is mandated by the relevant EU Regulation and has paid no regard to CMP’s entitlement to EU funding and the Department’s corresponding responsibility to support sector development,” he said.