‘Commission proposals on unfair trade practices don’t go far enough’

The proposals submitted by the commission to tackle Unfair Trading Practices (UTPs) will “not be sufficient to address the price pressures” on farmers, MEP Matt Carthy has claimed.

The Sinn Fein member of the European Parliament’s Agriculture and Rural Development committee was speaking following today’s publication of the commission’s long-awaited proposal for a directive to tackle UTPs.

Although the Midlands-North West representative has broadly welcomed the draft legislation – presented by EU Commissioner for Agriculture and Rural Development Phil Hogan – he “fears” the proposals do not go far enough to address inequalities in price negotiations faced by farmers.

The commissioner chose to present minimum measures with the stated intention that the co-legislators will strengthen it.

“Why not start from the other position, whereby the commission presents a strong and robust proposal, and allow us to fight to maintain the maximum support for farmers during the legislative process?

“The commissioner’s response effectively indicated that this was as good as he could secure among his fellow college members – suggesting that he has some work to do on his negotiating skills,” he said.

A fair price?

The proposal details effective enforcement provision measures – including sanctions – that can be imposed by national authorities where infringements are established.

It highlights that smaller operators in the food supply chain – including farmers – are vulnerable to UTPs employed by partners in the chain where they often lack bargaining power and alternatives to get their products to consumers.

The UTPs to be banned include:
    • Late payments for perishable food products;
    • Last-minute order cancellations;
    • Unilateral or retroactive changes to contracts;
    • Forcing the supplier to pay for wasted products.

Carthy questioned the speed at which such measures could be introduced.

“It is often in the contract negotiation phase that farmers feel the most pressure from factories and supermarkets. So, under the current proposal, it is likely that half of these UTPs will continue to be seen in the future.

“Remember that these negotiations regularly involve individual farmers across some of the largest and most powerful corporations in the world. Farmers are depending on UTP legislation to protect and support them in their bid to secure fair terms.

I do not believe that the commissioner can look any farmer in the eye and tell them that they will now receive a fair price for their product on the basis of this proposition.

Carthy stressed that agriculture is likely to remain the only sector in which it is commonplace for producers to sell their goods below the cost of production.

This, he says, is the reason why UTP legislation is so vital.

“Farmers are being forced to use Common Agriculture Policy (CAP) payments to make up the difference between the cost of production and the shrinking payments from buyers.

Essentially this means that EU money is ending up in the hands of corporations who employ oppressive tactics.

“Cleary the system is broken. This is why I have consistently called for national and EU legislation to ban the selling of products below the cost of production,” he said.

Following French footsteps

The MEP said he has been closely following the recent proposal in France, which regulates minimum buying prices and limits bargain sales.

“The minimum will mean the product must be sold at least for the purchase price plus 10%. Retailers will also not be able to discount a product more than 34% of its price.

This proposal is not perfect; but, it is a step in the right direction to place farmers on an equal footing and should be examined by Irish authorities.

One way or another; he claims the directive will not be transcribed into national law until well into the year 2020.