EU farming body Copa-Cogeca called on EU agriculture ministers to urgently produce draft controls to tighten what it sees as the imbalance of power in Europe’s food supply chain.
The general consensus is that farmers and small-to-medium sized outfits vulnerable to unfair trading practices are often forced to sell to retailers and wholesalers at a loss. Other examples of unfair trading practices - or UTPs – in Europe include delayed payments, sudden contract cancellation and the arbitrary coercion of big companies forcing suppliers to pay transport and storage costs.
Copa-Cogeca views this as a situation that can no longer be allowed to go on and wants urgent action.
Profits don’t cover costs
“Farmers’ incomes across Europe are constantly being squeezed,” said Pekka Pesonen, Copa-Cogeca secretary-general.
“The price the farmer gets often does not even cover his production costs. We need a fair, transparent and functioning food supply chain. We believe it is good for farmers, for processors and retailers – and above all for consumers. It is the only way to ensure a sustainable farming sector.”
Pesonen said the EU needed to enforce contracts on producers, processors and retailers to ensure farmers are given a share price of the produce they sell – and that this price is paid in a timely manner.
“We believe that unfair trading practices can only be curbed by a combination of voluntary codes backed by legislation and supported by a robust enforcement system so that operators are fined when they break EU law,” he said. Copa-Cogeca has suggested that an ombudsman service could be used to impose fines on those who breach trading standards.
The body wants to see an EU-wide policy measure set up to tackle UTPs as levels of regulation differ from nation to nation, making cross-border power abuse difficult to tackle.
“The EU Commission knows there’s a problem and needs to come up with a proposal. We consequently urge ministers next week to act and call for statutory legislation to be introduced to ensure a fair food chain,” said Pesonen.
However, Jean-Luc Mériaux, secretary-general of the European Livestock and Meat Trading Union (UECBV), said measures are enforced country-to-country and an EU-wide efforts could be tricky. “The situation varies from one Member State to another. This explains the variety of measures enforced by the food business operators and or the national authorities and law makers. Therefore, to put in place an EU scheme that suits the 28 Member States is not an easy task.”
Mériaux said the UECBV is part of the Supply Chain Initiative that is founded on a set of good practice principles and gives producers the chance to engage in dialogue with supply chain parties. EU farming organisations have not signed up so far, according to Mériaux.