The European Commission has launched a public consultation on a draft proposal to amend the guidelines around how agri-food businesses can form sustainability agreements with one another.
Agreements between companies that would restrict market competition or drive up prices are largely prohibited by the Commission’s Treaty on the Functioning of the European Union.
However, some agreements made between companies in the agricultural industry may be exempted from this prohibition, if they are deemed absolutely necessary to achieve sustainability standards.
The draft guidelines being proposed by the Commission aim to clarify how operators in the agri-food sector can design joint sustainability initiatives in line with existing regulations.
Speaking about the possibility of updating the guidelines, Janusz Wojciechowski, commissioner for agriculture said:
“The transition to more resilient and sustainable agricultural production requires reinforced co-operation within the actors of the whole supply chain, ensuring that farmers get a fair economic return for their effort to enhance sustainability beyond what is currently mandatory.
“We hope that the farmers, together with other actors of the supply chain will make use of this exclusion when designing their sustainability agreements.”
Proposed changes to the guidelines
The proposed amendments would define the scope of the exclusion, allowing it only between an agricultural producer and other key operators along the supply chain. An agreement between operators that does not include a primary producer would not be allowed.
Agreements are only eligible if they contain a goal of achieving a sustainability standard. The Commission’s proposal outlines that there would be three categories of these sustainability standards, and an agreement would have to fit into one of them to be exempt.
These are: Environmental protection, reduction of pesticide use and antimicrobial resistance, and animal health and welfare.
The drafted guidelines also state that to qualify, a sustainability agreement would have to make an improvement to the chosen area that is greater than the improvement that would result from the EU’s existing agreements.
Finally, the Commission’s draft guidelines would require parties in the agreement to assess whether or not any restrictions to market competition will result, and if so, does the benefit of the agreement outweigh the negative impacts of these.
The public consultation will remain open until April 24, 2023, after which the Commission stated it will take on board the comments made, before making any chances it feels are necessary.
Overall, it is hoped that the updated guidelines will be finalised and ready to adopt by December 8, 2023.
Submissions under the public consultation can be made on the Commission’s website.