Agri co-ops welcome the tackling of unfair trading practices

Copa-Cogeca, the organisations representing European farmers and agri co-operatives, have welcomed recommendations made by the EU Agri Markets Task Force to tackle unfair trading practices (UTPs) in the food...

Copa-Cogeca, the organisations representing European farmers and agri co-operatives, have welcomed recommendations made by the EU Agri Markets Task Force to tackle unfair trading practices (UTPs) in the food chain.

The task force was set up in January 2016 to explore solutions to volatility within the EU agricultural markets and secure a more viable future for farmers. It consists of 11 members, including four representatives from agri co-operatives.

The group recommends, among others, introducing, and providing for enforcement of, EU framework legislation on specified prohibited UTPs at both domestic and transnational levels. It also calls for mandatory price reporting for selected products, mapping relevant data linked to occurrence of risks, funding training for farmers and co-ops and promoting available tools and removing the “fear factor” from reporting an unfair trading practice by involving producer organisations and co-ops.

Commenting on the Task Force report, Copa-Cogeca secretary general, Pekka Pesonen, said: “We welcome the main recommendations of the group chaired by Cees Veerman. In particular, we welcome the recommendation for EU legislation to help fight UTPs in the food chain. For us, a EU framework law is vital to curb UTPs – something we have long been calling for – so that operators are sanctioned when they break EU law. An independent third party ombudsman must impose sanctions whenever there is non-compliance.”

Mr Pesonen added that Copa-Cogeca welcomed the recommendation for mandatory written contracts provided that the specific nature of co-operatives and their relations with their members was safeguarded. “We also support the initiative to increase market transparency by creating market observatories in the milk, beef and pork sectors but they need to be extended to include other sectors like sheep meat, sugar, wine, cereals and potatoes,” he added.

The report also suggests clarifying the exemption for competition law of farmers jointly planning and selling production collectively in co-ops and producer organisations. Another recommendation made is to shift Common Agricultural Policy resources to develop a strategic EU risk management policy.

Mr Pesonen said that the basic payment scheme under Pillar I of the CAP was the main income stabilising tool for farmers and should continue.

“Direct payments to farmers provide stability and help to secure their cash flow. Farmers need enough tools to manage the different risks they face, be they weather events, pests and diseases or market volatility”, he said.

In the UK the Scottish Agricultural Organisation Society (SAOS) said the recommendations required “careful recommendation” in respect of EU and the UK’s potential post Brexit policy.

“Our concern is that the level of volatility and risk affecting the viability of farming appears to be getting more extreme,” said James Graham, SAOS CEO. “At some point, this could threaten continuity of production and food supplies from impacted sectors, and afflict real disruption on farming families and rural communities. Better ways to mitigate and manage risk are required.

“The fact that retail prices, which are determined by food retailer competition, can be so disconnected from farm prices, which are determined by global supply/demand commodity dynamics, presents real challenges in supply chain relationships and has resulted in asymmetric pricing. New supply chain thinking and models are required that acknowledge and better accommodate commodity volatility, perhaps by examining ways to share commitment and risk at least to some degree. This requires the willingness of all involved in the chain to participate. Fears in some parts of the chain, that commerciality might be compromised, all too frequently prevents meaningful discussion.”

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