The trade body is lobbying to ensure Brexit legislation for agriculture “provides both ‘day one continuity’ for co-operatives and a basis for enhanced co-operation in future policy”.
Co-operatives UK pointed out that the new Agriculture Bill would change competition law so that only registered producer organisations (POs), associations of producer organisations (APOs) and Interbranch organisations (IBOs) will benefit from special accommodations and exemptions. Under the EU competition settlement, other farmers’ associations, such as non-PO co-operatives, benefit from such accommodations.
While the new PO framework may make it easier for co-ops currently outside the PO framework to be recognised and thus covered by the new competition settlement, this provision is likely to come in secondary legislation at a later date. Co-operatives UK warns that until then, co-ops that are not POs face uncertainty.
Without being covered by the EU competition settlement, farmer co-operatives in the UK could find themselves in breach of competition law.
Most UK co-ops in the agricultural sector are not POs. As members of these non-PO co-ops, farmers can co-operate in ways that the UK’s Competition Act currently prohibits. This includes joint buying or selling, sharing information about prices, production and market strategies, and having long-term exclusive contracts with customers or suppliers.
Co-operatives UK has already worked with Defra, the government and MPs to improve the Brexit legislation for agricultural co-operation, ensuring that the whole of the existing EU settlement would be domesticated and include references to farmers’ associations and Common Agricultural Policy Objectives. The umbrella organisation supports the idea of amending the PO provisions in the Bill to leave room to create “an inclusive, flexible PO framework” later on.
“Farmers can’t compete effectively if they can’t co-operate in doing so,” said secretary general Ed Mayo. “The UK has some outstanding farmer co-ops and given all the challenges facing farming, including Brexit and wider environmental imperatives, we believe these need to be the building blocks for a sustainable food and farming system going forward. Some careful work by Co-ops UK on a highly technical issue could prove over time to be an essential safeguard for the co-operative business model.”