Commission eyes measures to protect farmers in food chain negotiations

Under pressure from the member states, the European Commission is preparing “a series of actions” aimed at improving the position of farmers in the food chain and protecting them against unfair trading practices.

According to the document on the simplification of the Common Agriculture Policy (CAP) rules circulated on 22 February, and discussed today (Monday 26) at the Agriculture Council, the bloc’s executive is “preparing a range of short, medium and longer-term actions to improve the position of farmers in the food chain and protect them against unfair trading practices”.

Farmers’ incomes and their bargaining power in the value chain have been a central issue since the start of the European protests.

In the growers’ view, agricultural raw materials are not sufficiently remunerated, while intermediaries such as the agri-food industry and supermarkets drive prices down in order to increase their margins.

Several delegations raised the issue at the Agrifish Council on Monday.

David Clarinval, the Belgian Minister for Agriculture, who is chairing the Council, confirmed at a press conference that they had “examined suggestions aimed at strengthening the position of farmers in the medium and long term, both financially and in terms of their position in the agri-food chain”.

Some tools already exist in the EU to protect producers, such as the 2017 Omnibus Regulation.

The regulation extends to all the agricultural sectors certain prerogatives of producer organisations (POs), such as production planning, optimisation of production costs, placing on the market and negotiating contracts for the supply of agricultural products on behalf of their members.

More recently, the Directive on Unfair Commercial Practices set out a blacklist of 10 prohibited practices, including payment after 30 days for perishable agricultural and food products, and unilateral changes to the contract by the buyer.

Strengthening the directive on unfair commercial practices

Spain’s Minister of Agriculture Luis Planas recently called on the Commission to update the Unfair Commercial Practices Directive. In his view, it should be brought more into line with Spanish law, which is considered to be a “pioneer”, particularly when it comes to banning sales below cost (i.e. at a price below production costs).

Italy sided with Spain, presenting at the Council a note calling for strengthening the directive and guaranteeing greater transparency of the product’s origin on the label.

At an extraordinary European Council meeting on 1 February, French President Emmanuel Macron asked Commission President Ursula Von der Leyen to introduce a European Egalim, named after the French law that allows prices to be set on the basis of production costs during trade negotiations. This is the strictest law in Europe to protect producers.

In France and Spain, however, concerns persist that national laws are not being fully respected.

French Economy Minister Bruno Le Maire has launched a wide-ranging investigation to identify manufacturers and distributors who are not complying with the Egalim laws, and a number of penalties have been imposed.

The call for ‘floor prices’

On Saturday, at the opening of France’s mainstream farming event, Salon International de l’Agriculture, Macron went even further, advocating ‘floor prices’ (prix plancher) for each sector, i.e. minimum prices for producers imposed on manufacturers and distributors.

The announcement came as a surprise, especially as just a few days before, Agriculture Minister Marc Fesneau had opposed a bill proposed by La France Insoumise (extreme left) imposing these same floor prices. He called the idea “demagogic”.

According to the Elysée Palace, Macron will attempt to bring this measure to the European level in the coming months.

New European price observatory

While the Commission has not reacted to these proposals, it could announce measures at the next EU Council of Ministers in March.

“Specific attention will go to measures related to margins, trading practices in the value chain and costs of production, given that farmers are often the most vulnerable link in the food value chain,” wrote the Commission in the document on simplification.

To improve transparency in trade negotiation practices, the executive also intends to set up a price observatory.

The Belgian Presidency “is requesting an in-depth examination” of the topic “by the Commission, and will report back to the Council as soon as possible on the concrete measures that can be taken in this regard”, Belgium’s Clarinval said.

[Edited by Angelo Di Mambro/Nathalie Weatherald]

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