More than half of the UK’s fruit and vegetable Producer Organisations are at risk of losing their EU payments, following a review of the scheme.

For several years the Rural Payments Agency has been fined by the EU for administration problems surrounding the Fruit & Vegetable Aid Scheme, leading to a review of Producer Organisations and their eligibility criteria.

The NFU, RPA and DEFRA produced fresh guidance in 2010, which they hoped would provide a common interpretation of the scheme rules, and the RPA set out to identify any organisations which did not comply with the scheme.

During the review, which should have been concluded by 15 June, all payments to POs were suspended, leaving many without the means to invest in their businesses. However, an even greater shock was that this week the RPA reportedly found that more than half of the POs did not comply with the rules, and may be stripped of their payments.

“POs are clearly appalled at the decision and are anxious to understand why they are left in limbo,” said Hayley Campbell-Gibbons, chief horticulture adviser at the NFU. “Many have put a lot of work into the review and are shocked at the outcome.

“At this stage it’s not clear why so many POs appear to have been suspended. As organisations receive their letters, which will offer more detail on exactly where the PO has fallen down, the NFU will be in a better position to start identifying the common themes and offering any information or guidance that it can.”

A spokeswoman said the RPA would be speaking to POs individually to discuss the way forward. “Payments to compliant POs will be made, subject to the usual checks.”

In total, £28m was ring-fenced for POs to invest in shared facilities like pack houses, cold stores and polytunnels, to improve growers’ efficiencies, said Mrs Campbell-Gibbons. “The worst case scenario is that the POs ultimately fail to be approved, which will have massive consequences for their suppliers, because some of the payments are in the millions of pounds. It will be a big blow for the UK horticulture sector.”