EU proposes new measures to strengthen farmers' position in the agri-food supply chain

The European Commission proposes targeted amendments to the current legal framework set in the Regulation establishing a common market organisation of agricultural products (CMO) and a new Regulation on cross-border enforcement against unfair trading practices. These proposals aim to strengthen farmers' position and restore the trust between actors in the agri-food supply chain by:

• enhancing rules for contracts between farmers and buyers, making written contracts a general obligation and improving the way long-term contracts take into account market developments and fluctuations of costs and economic conditions;
• making the establishment of mediation mechanisms between farmers and their buyers mandatory;
• boosting producer organisations and their associations by improving their bargaining power, allowing Member States to grant them more financial support under CAP sectoral interventions, and simplifying the rules on their legal recognition;
• allowing the EU to financially support producer organisations that would take private initiatives to manage crises;
• defining when optional terms like “fair,” “equitable,” and “short supply chains,” can be used to describe the organisation of the supply chain when marketing agricultural products;
• expanding the possibility for farmers and other actors to agree on sustainability initiatives with certain social dimensions, such as supporting generation renewal, preserving the viability of small farms or improving working conditions of farmers and farm workers.

In parallel, the Commission proposes new rules on cross-border enforcement against the unfair trading practices in the agricultural and food supply chain prohibited by the so-called UTP Directive. On average, around 20% of the agricultural and food products consumed in a Member State come from another Member State. There is a need to enhance the cooperation of national enforcement authorities, notably by improving the exchange of information, investigations, and collection of penalties.

This proposal on cross-border enforcement against unfair trading practices will further strengthen the enforcement against unfair trading practices in business-to-business relationships in the agricultural and food supply chain by supporting transnational enforcement. The proposal introduces procedural rules on how this cooperation in cross-border cases would be performed and achieved. By setting up a mutual assistance mechanism, national enforcement authorities will have the possibility to ask and exchange information and request another enforcement authority to take enforcement measures on their behalf. This approach allows enforcement authorities to agree on launching a coordinated action whenever there is reasonable suspicion of widespread unfair trading practices with a cross-border dimension. Such investigations enhance EU-level protection for farmers and small and medium-sized suppliers against unfair trading practices in the agri-food supply chain.