Co-ops have been granted a derogation from new EU regulations that require food processors to provide mandatory supply contracts to farmers.
The co-op derogation from the new Common Market Organisation (CMO) regulations was agreed on Thursday in Brussels, the Irish Farmers Journal has learned.
Ireland’s dairy co-ops had sought a total exemption from the CMO requirement to provide mandatory supply contracts to farmer suppliers but this was rejected by Brussels.
The derogation from the CMO rules will only apply to co-ops that have mechanisms in place that achieve the same results as mandatory supply contracts.
Opt-out
In other changes to the CMO regulations, it is understood that member states can apply for an opt-out on the indicators used to determine agricultural product prices.
The regulations proposed that product prices should be set by combining objective indicators or using methods of calculation that are easily understandable.
“Price calculation methods should also be capable of reflecting changes in market conditions and the production costs of the agricultural products,” it states.
It is not known as yet whether Ireland will seek an opt-out from the CMO rules on pricing.
The CMO requirement on mandatory supply contracts was strongly opposed by the Irish Co-operative Organisation Society (ICOS).
ICOS pointed out that the vast majority of Irish milk suppliers already enjoyed the protection of supply contracts with their co-ops.
The co-operative body also argued that the contract duration, at six months, was too short.
The CMO’s entry into the area of milk pricing was also opposed by ICOS.
“The specific requirement in the proposal that the milk pricing decision would be taken away from elected farmer directors and instead be calculated with reference to external indicators. This would not be in the farmers' interests,” said ICOS chief executive TJ Flanagan.
However, those who supported the CMO changes argued that the measures would strengthen the position of farmers in the food chain.
Read more
Compromise yet to be found on farmer supply contract proposals
Anger over minister's stance on contracts
Co-ops have been granted a derogation from new EU regulations that require food processors to provide mandatory supply contracts to farmers.
The co-op derogation from the new Common Market Organisation (CMO) regulations was agreed on Thursday in Brussels, the Irish Farmers Journal has learned.
Ireland’s dairy co-ops had sought a total exemption from the CMO requirement to provide mandatory supply contracts to farmer suppliers but this was rejected by Brussels.
The derogation from the CMO rules will only apply to co-ops that have mechanisms in place that achieve the same results as mandatory supply contracts.
Opt-out
In other changes to the CMO regulations, it is understood that member states can apply for an opt-out on the indicators used to determine agricultural product prices.
The regulations proposed that product prices should be set by combining objective indicators or using methods of calculation that are easily understandable.
“Price calculation methods should also be capable of reflecting changes in market conditions and the production costs of the agricultural products,” it states.
It is not known as yet whether Ireland will seek an opt-out from the CMO rules on pricing.
The CMO requirement on mandatory supply contracts was strongly opposed by the Irish Co-operative Organisation Society (ICOS).
ICOS pointed out that the vast majority of Irish milk suppliers already enjoyed the protection of supply contracts with their co-ops.
The co-operative body also argued that the contract duration, at six months, was too short.
The CMO’s entry into the area of milk pricing was also opposed by ICOS.
“The specific requirement in the proposal that the milk pricing decision would be taken away from elected farmer directors and instead be calculated with reference to external indicators. This would not be in the farmers' interests,” said ICOS chief executive TJ Flanagan.
However, those who supported the CMO changes argued that the measures would strengthen the position of farmers in the food chain.
Read more
Compromise yet to be found on farmer supply contract proposals
Anger over minister's stance on contracts
SHARING OPTIONS