The EU Agriculture Commission has begun the process of acting on the Agricultural Markets Task Force report, which was published late last year. This report was produced by a group of experts from across the EU and included the former chief executive of Northern Ireland’s United Dairy Farmers, David Dobbin. The report highlighted what the group believed to be unfair trading practices (UTPs) where large corporations had an unfair advantage over small suppliers and farmers.
The EU Agriculture Commission has begun the process of acting on the Agricultural Markets Task Force report, which was published late last year.
This report was produced by a group of experts from across the EU and included the former chief executive of Northern Ireland’s United Dairy Farmers, David Dobbin. The report highlighted what the group believed to be unfair trading practices (UTPs) where large corporations had an unfair advantage over small suppliers and farmers.
The group also recommended greater transparency in the supply chain between product leaving the farm gate and going on to the retail shelf. Establishment of producer collaboration was identified as a means of addressing the imbalance.
The Commission undertook to incorporate action in the report into its work programme this year and this is now under way. An Inception Impact Assessment on ways to address the findings of the report was launched on 25 July for four weeks, inviting feedback from interested parties and is open until next Tuesday, 22 August.
In addition, a 12-week consultation was launched on Wednesday, running until 17 November.
Legislation is scheduled for March 2018 if that is the action chosen after the consultation.
The IIA has set out a range of objectives and policy options in relation to UTPs, producer co-operation and market transparency.
These include the status quo of leaving it to national governments or issuing EU guidelines that wouldn’t be legislative-based.
The third option presented is EU framework legislation to protect the weaker members of the supply chain (farmers and small- and medium-sized enterprises).
The fourth option is minimum EU framework legislation for the food chain with considerable flexibility for member states to do their own thing.
On the issue of transparency in the chain after a product leaves the farm gate, two options are considered. One is leaving things as they are, the other is to collect data at more levels of the food supply chain and publish it.
The fact that 20 out of the current EU 28 member states have legislated on the issue is presented as evidence of a problem across the EU. However, by virtue of the fact that they have already done so suggests that the issue can and has been addressed at member state level with EU intervention unnecessary.
It also presents an obstacle with some members as there is a belief that national legislation is sufficient to address the issue.
The UK is one such example where the Grocery Code Adjudicator is considered a fairly effective response that the large retailers do pay attention to.
IFA response
With a week left on the IIA consultation, 15 responses have been received including a detailed submission from the IFA. The IFA response is broadly in agreement with the Task Force report and refers to late payments, below-cost selling and “hello money” to do business along with wastage payments, marketing costs and payments for shelf space as examples of UTPs that they are aware of.
The IFA says that the voluntary supply chain initiative is not working for primary producers and that if unchecked, retail power and big business will destroy the European family farm structure. The organisation calls for an EU-wide legislative approach with enforcement mechanisms and a regulator in each country similar to the UK model. On the issue of market transparency, the IFA is of the view that the IIA proposals don’t go far enough. It is calling for a model similar to what is in place in the US, where comprehensive stock and wholesale market values are published. This, the IFA believes, is what is required in the EU to fill the gap in information between the farm gate and retail shelf.
The third element of the IIA, producer co-operation, is broadly welcomed by IFA and the organisation suggests it should be investigated further.
Producer collaboration is also an element of the Irish beef forum and the EU envisages a value-sharing model, similar to what exists in the sugar sector as being a model that could be extended across agriculture.
Nine months on from the publication of the Agricultural Markets Task Force report, the EU Commission is now moving to give effect to its findings. There is a distance still to travel, however, before robust legislation is in place and a number of complications remain. This is an area than transcends EU Commission portfolios as it strays into territory associated with the competition commissioner. However, as it is agriculture-specific, DG Agri is accepted as having a key role.
Action
The fact that 20 of the current 28 EU countries have some type of legislation is a mixed blessing. On one hand, it is used as evidence of a problem in the supply chain but it is also used as evidence of action having been taken, making further EU legislation unnecessary.
The biggest obstacle to farmer confidence in the supply chain is the lack of knowledge after produce leaves the farm gate.
The US is recognised as having the ideal model on transparency after the farm gate. It would be a welcome step forward if we could have the same in the EU.
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