Council Agrees to Boost Farmers’ Power in Agrifood Supply Chain
The Council’s negotiating mandate on a targeted adjustment to the common market organization of agricultural goods (CMO) regulation and the two other acts governing the common agricultural policy was accepted by the representatives of member states in the Special Committee on Agriculture (SCA). These adjustments are intended to improve farmers’ standing in the food supply chain and address the increasing difficulties they encounter.
In order to prevent farmers from being subjected to unfavorable conditions by influential players in the food supply chain, the new regulations aim to provide farmers with a stronger negotiating position. The revised regulations will help stabilize farmers’ earnings and guarantee more equitable livelihoods in agriculture by giving them more authority.
“Farmers play a vital role in our lives, but they remain the weakest link in the agrifood supply chain. The new rules aim to improve their bargaining power, ensuring they can make a fair and dignified living from their hard work. The ultimate goal is to restore trust throughout the food supply chain,” said Czesław Siekierski, Polish Minister for Agriculture and Rural Development
Main elements of the proposal
The proposed amendments to the CMO regulation focus on several key areas, in order to strengthen the role of farmers in the food supply chain by:
- making written contractsa general obligation between farmers and buyers and by improving the way long-term contracts take into account market developments, fluctuations of costs and economic conditions
- introducing a revision clausein long-term contracts, to better protect farmers in the long run and to ensure they are not locked into unfavourable terms
- streamlining the rules for the legal recognition of producer organisations
- strengthening producer organisations and their associations by allowing member states to grant them more financial support through CAP sectoral interventions
- encouraging young and new farmersto join recognised producer organisations through incentives
- defining the conditions of use of optional terms like ‘fair’, ‘equitable’, and ‘short supply chain’ when marketing agricultural products
Main changes agreed by the Council
The Council supports the main elements and the overarching goals of the proposal but suggests a series of improvements in its negotiating mandate.
Written contracts
The Commission proposed introducing compulsory written contracts for each delivery of agricultural products, with certain exceptions.
In its mandate, the Council suggested a series of amendments clarifying who is covered by the obligation for written contracts. It also introduced further exceptions, with the aim of granting more flexibility to member states in adjusting the obligation to their specific needs, depending on the sector and product.
In particular, member states will be able to decide that a written contract is not necessary if the first purchaser of agricultural products is a micro or small-sized enterprise, the delivery of goods takes place and payment is made at the same time, or if the value of deliveries does not exceed a maximum of €20 000.
Revision clause for contracts
Furthermore, farmers would be able to trigger the revision clause for long-term contracts after 12 months, instead of the six months proposed by the Commission. This aims to guarantee predictability and stability in the supply chain, while ensuring that farmers are protected, in particular in situations where the price they receive for their products no longer covers production costs.
Mediation mechanism
The Commission proposed establishing mandatory mediation mechanisms between farmers and their buyers to encourage parties to reach an amicable settlement in the event of disputes over the conclusion or review of a written contract.
In order to reduce the administrative burden and respect the specific situation of member states, the Council agreed that the mediation mechanisms should be voluntary, meaning that it would be up to the member states to decide whether to establish them.
Entry into force
The Council agreed that there would be a transition period of two years, compared with the 18 months provided by the proposal. This will allow the agrifood sector to adapt and prepare for the new rules.
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