France Backs Compensation for Food Producers as E. Coli Crisis Hits Demand

France, the European Union’s largest agricultural grower, is backing a plan to compensate farmers in the 27-nation bloc after the deadliest outbreak of E. coli ever recorded decimated demand.

As much as 80 percent of vegetable supplies are being destroyed in some areas because there is no market for them, Copa-Cogeca, a farm lobby group based in Brussels, said in a report today. “Unprecedented” losses are running into millions of euros a day, and “paralyzed” trade is extending into the fruit market, it said.

EU agriculture ministers are meeting in Luxembourg today to discuss their response to the outbreak, which has killed 23 people and sickened 2,429. They are also contending with an international trade crisis afterRussia banned imports June 2 and Prime Minister Vladimir Putin said he won’t “poison people” to meet international trade rules.

“It is fair to try to define the way of compensating the loss of the producers,” French Agriculture Minister Bruno Le Maire said in an interview in London today, adding that its scale had yet to be decided. “There has been a great failure, and we have to take that into account and try to improve our safety system so that it will never happen again.”

The Netherlands, the world’s second-largest agricultural exporter after the U.S., said yesterday it is asking for “broad support measures” for vegetable growers, including buying up of produce that can no longer be sold to consumers. The origin of the outbreak is still unknown.

Emergency Fund

A proposal by the Netherlands for an emergency fund is backed by Germany and Spain, farm organization LTO Nederland said in a statement yesterday. State Secretary for Agriculture Henk Bleker will also ask for measures to promote vegetables, the Dutch government said. The proposal has support from nine other member states, LTO said in a statement today.

The proposed fund is gaining support, Bleker said today before the meeting. “I’m not so good in counting, but it’s going well,” he said.

The EU should spend as much as 55 million euros ($80 million) on a three-week media campaign to promote fresh produce, Freshfel Europe, which represents the industry, said today. Sales of cucumbers fell 80 percent to 100 percent in some member states, tomatoes 50 percent to 80 percent and lettuce more than 50 percent, it said in a statement.

Cucumbers slumped to 5 cents a unit from a five-year average of 21 cents, while tomatoes now cost 13 cents a kilogram (2.2 pounds), compared with an average of 60 cents, Copa-Cogeca said. Prices are “well below” production costs, it said.

Spanish fruit and vegetable producers are losing 225 million euros a week because of the outbreak, said Jose Maria Pozancos, director general of trade group FEPEX. The Dutch vegetable industry is losing 80 million euros a week as orders are canceled, LTO said yesterday. www.bloomberg.com