The European Commission has presented a set of ideas aimed at supporting farmers in the food supply chain in a document shared with EU member states, responding to demands expressed by growers in recent protests for fairer compensation for their work, reports Euractiv.

Recognition

The document shared with EU countries and seen by Euractiv acknowledges that a "small number of large companies" dominate the food industry, while the agricultural sector remains highly fragmented and largely composed of small and medium-sized enterprises, leaving farmers in a weak position.

"Even the largest farms often find themselves in a vulnerable position in the agri-food supply chain due to limited negotiating power against highly concentrated and more powerful actors," the document elaborated by the Commission states, referring to food retailers as "guardians of consumer markets."

Additionally, the text highlights other challenges faced by farmers, such as the seasonal and cyclical nature of agricultural production, as well as uncertainties related to unfavorable weather conditions.

Cross-border enforcement

To address these issues, the Commission presents immediate non-legislative measures, including the creation and launch of an observatory to monitor trading practices, margins, and costs in the EU's agri-food supply chain, with the inaugural meeting scheduled for June.

Furthermore, after the summer, the EU executive intends to introduce new rules to ensure cross-border enforcement of the EU Directive on Unfair Trading Practices (UTPs), which prohibits certain abusive behaviors of large buyers against farmers.

Additional measures would target multinational food and retail companies that circumvent unfair trading practices legislation by operating in multiple EU member states.

The French government, for example, has repeatedly called for the strengthening of these provisions, as they allow retailers to relocate their purchasing centers from countries where national legislation is stricter, such as France, to member states where the rules are more favorable.

French President Emmanuel Macron has called for more protection for food producers through a "European Egalim" law, a reference to French legislation regulating commercial negotiations with supermarkets and producers.

The proposal will also seek to give more power to national law enforcement authorities in cross-border cases and ensure cooperation and information exchange between different member states.

Additionally, the Commission will evaluate the implementation of the UTP directive in the agri-food chain in a report to be published in April. In 2025, it will conduct an in-depth assessment of the rules and, if necessary, propose legislative changes.

Another measure under consideration is the amendment of the EU Regulation on the Common Organisation of the Markets (CMO), in a proposal that could be issued in May.

This could involve strengthening rules for contracts between farmers and buyers, supporting farmer associations and producer organizations, and encouraging voluntary fair trade schemes to ensure that farmers are fairly paid without burdening enterprises.

Positive reactions

The proposals have garnered positive reactions from agricultural groups, with Copa-Cogeca, the most influential agricultural lobby in the EU, welcoming the measures while also emphasizing the need for "increased transparency in the functioning of the food chain" and "reduced administrative burden."

"We hope both the [EU] Council and the European Parliament can continue to swiftly analyze the proposals in this area," Copa-Cogeca said in a press release.

Similar comments were echoed by Camille Perrin, a senior policy officer at the European consumer organization BEUC, who told Euractiv that more transparency is needed regarding where consumers' money goes if it does not reach farmers.

"Are there greedy actors in the chain taking a larger share of the pie than they should reasonably?" Perrin asked, explaining that creating an observatory could bring some clarity to this issue.

French agricultural organizations FNSEA and Jeunes Agriculteurs have praised the Commission's efforts to address vulnerabilities in the food chain for farmers and their financial situation, emphasizing in particular the importance of preventing multinational buying groups from circumventing EU legislation on unfair practices.

The French Ministry of Agriculture also praised the proposal for new rules on cross-border implementation of the UTP directive, which it said aligns with France's requests. (Photo: Freepik)