On Monday 14 November, the agricultural markets task force called for EU-wide legislation to ban unfair trading practices in the food supply chain and to impose sanctions for non-compliance in a bid to improve the position of farmers vis-a-vis large retailers.
When it meets in Brussels on Tuesday 15 November, the Agriculture Council will discuss the recommendations made by the task force which was set up by Agriculture Commissioner Phil Hogan in January 2016 to find possible solutions to the difficult situation in which some farmers find themselves.
The 12-strong group of market experts, chaired by former Dutch Agriculture Minister Cees Veerman, looks set to back EU-wide rules that introduce a “harmonised baseline of prohibited unfair trading practices”, such as payment delays beyond 30 days, unilateral and retroactive changes to contracts and last-minute order cancellations for perishable goods.
The expert group recommends “dissuasive ... sanctions for non-compliance” with the legislation. Victims of unfair practices should be able to lodge complaints anonymously, while producer organisations and cooperatives should also be allowed to file complaints. EU-wide framework legislation and effective enforcement regimes in member states, such as use of an adjudicator, should be introduced, the experts say.
The report, “Farming the Future in Europe – an examination of the position of farmers in the food supply chain & ways to improve it”, which runs to some 50 pages, comprises chapters on market transparency, risk management, futures markets and other derivative instruments, trading practices, contracts, competition law and access to finance.
Price transparency. The report suggests the EU should “increase the price transparency of processors and retailers” especially in the meat, dairy, fruit and vegetable sectors. It recommends “mandatory price reporting, in particular at the stage of processing”.
The group encourages the development of futures markets, that is, contracts for the future delivery of a commodity with the price determined today allowing farmers to hedge against the effects of price volatility. The experts would like derogations from competition law for producer organisations and their associations to “jointly sell and jointly plan production”.
The Commission, in its work programme for 2017, is planning initiatives to strengthen the position of farmers, informed by the task force’s report. Up until now, the Commission has been less than keen on legislating on unfair trading practices. The task force’s conclusions could make it change its mind.
CAP after 2020. The task force suggests a new tool to compensate farmers for income losses due to adverse weather conditions or price slumps, via an index-based system of loss-thresholds, adapted to regional circumstances. The report also suggests the possibility of introducing integrated risk management policy elements at EU level. The experts underlined that the new support measures should reward farmers for environmental services and incentivise climate-friendly practices. Emphasis must be laid on the challenges posed by climate change and shortages of water and fossil energy, the task force concludes. (Original version in French by Lionel Changeur)