Mushroom growers sue Minister over ‘misapplication’ of EU fund

State’s largest producer body initiates legal action, claiming it has lost €12m in funding

The State’s largest mushroom producer organisation is suing the Minister for Agriculture, claiming it has suffered more than €12 million in losses due to the alleged unlawful withholding of EU financial aid.

Commercial Mushroom Producers (CMP) claims the department has limited the amount of aid available to it via expenditure caps which, it claims, have been unlawfully applied.

CMP chief executive Donal McCarthy also said in a sworn statement the department had unlawfully refused EU financial aid in relation to expenditure actually incurred within budget.

The EU provides financial assistance to growers, which form recognised producer organisations (POs) so as to improve the quality and efficiency of the industry.

The CMP is the largest PO in the Republic, representing 50 mushroom businesses and supporting about 3,000 jobs. The export-focused group supplies about 50 per cent of all mushrooms sold in the UK retail sector.

Paul Gallagher SC, for CMP, which was established in 1999, applied on Monday to have its case against the minister fast-tracked in the Commercial Court.

Brian Kennedy SC, for the minister, argued CMP had failed to demonstrate sufficient urgency in bringing these proceedings such as entitled it to avail of the court's fast-track procedures.

The department was also concerned about the resources implications for its small unit dealing with these claims if it had to adhere to the fast-track procedures of the court, counsel said.

Mr Gallagher disputed there was any delay on CMP's part and outlined a history of correspondence and interaction between the department and his client concerning the alleged misadministration of the financial aid scheme.

This was a very difficult matter for the producers involved who would prefer not to fight with the Department and had tried over years to resolve the matter, counsel added.

Judge McGovern ruled the case had not demonstrated the necessary urgency and refused the fast-track application, meaning the action will now proceed via the ordinary High Court lists.

In its proceedings, CMP says it is a recognised producer organisation within the meaning of certain complex EU legislation governing a scheme of financial aid for producer organisations in the fruit and vegetables sector.

It claims, under the rules of the co-operative, its members are required to market their entire mushroom production through CMP.

It claims the value of CMP’s marketed production during 2015 was some €210 million.

Its legal proceedings relate to the administration by the department of the relevant EU aid scheme between 2010 and 2016.

It also alleges the alleged misadministration of the scheme, despite CMP having raised concerns with the department, is continuing and that changes being proposed will not address its concerns.

CMP alleges, due to the alleged misadministration, the Department has unlawfully deprived it of financial aid to which it is entitled by disallowing certain requests for approval of budgeted expenditure and disallowing applications for payment of aid in respect of some expenditure incurred within budget.

The loss and damage attributable to the alleged unlawful withholding of EU financial aid alone is estimated to be more than €12 million, it claims.