Un­for­tu­nate that UTP pro­posal and Brexit co­in­cide

Irish Examiner - Farming - - COMMENT - Stephen Cado­gan EU farm­ers wel­comed the step for­ward, not­ing farm­ers get only 21% of the value of food, 28% goes to pro­ces­sors, 51% to re­tail­ers

The enor­mity of the chal­lenge taken on by EU agri­cul­ture and ru­ral de­vel­op­ment com­mis­sioner Phil Ho­gan, to help farm­ers and oth­ers by end­ing u n f a i r t r a d i ng p r a c t ic e s (UTPS) in the EU i s be­com­ing clear.

In April, he and Jyrki Katainen, Com­mis­sioner for Jobs, Growth In­vest­ment and Com­pet­i­tive­ness, pro­posed a new EU di­rec­tive to ban late p a y m e n t s fo r p e r i s h a bl e fo o d s , l a s t - m i n u t e o r d e r can­cel­la­tions, uni­lat­eral or r e t r o a c t i ve c h a n g e s t o con­tracts, and forc­ing a sup­plier to pay for wasted prod­ucts, and to per­mit other UTPS only by clear, un­am­bigu­ous up-front agree­ment be­tween par­ties (such as a buyer re­turn­ing un­sold foods to a sup­plier; a buyer charg­ing a sup­plier to se­cure or main­tain a food sup­ply agree­ment; or a s u p p l i e r p a y i n g fo r fo o d pro­mo­tion or mar­ket­ing by the buyer).

Mr Ho­gan also said: “We are look­ing to elim­i­nate the fear fac­tor in the food sup­ply chain, through a con­fi­den­tial com­plaints pro­ce­dure.” EU farm­ers wel­comed the “st e p f o r wa r d ” , n o t i n g farm­ers get only 21% of the value of food, 28% goes to pro­ces­sors, and 51% to re­tail­ers. How­ever, the pro­posal must go through the Euro­pean Par­lia­ment and the Coun­cil of M i n i s t e r s w h e re m e m b e r states are rep­re­sented.

It was wel­comed ini­tially by al­most all EU agri­cul­ture min- is­ters. To­day, the Euro­pean Par­lia­ment is be­ing asked to give the green light to its agri­cul­ture com­mit­tee to ne­go­ti­ate with the Com­mis­sion and Coun­cil on the leg­is­la­tion, or re­fer it back to Par­lia­ment for de­bate and pos­si­ble amend­ment. Some MEPS may try to delay and weaken the leg­is­la­tion in de­bate, warned Ir­ish MEP Mairead Mcguin­ness, f i r s t Vi c e - P r e s i d e n t o f t h e Par­lia­ment.

She be­lieves there is con­sumer sup­port for pro­tect­ing pro­duc­ers such as farm­ers, but warned of the ex­tent of lob­by­ing against the leg­is­la­tion, in­clud­ing un­jus­ti­fied con­cerns from con­sumer groups that it will lead to higher con­sumer prices. Con­sumers are not the only ones fight­ing against the bid to give EU farm­ers a bet­ter share of the con­sumer’s euro. Euro­com­merce, rep­re­sent­ing re­tail and whole­sale sec­tors in Europe, has asked MEPS and NGOS to try to post­pone votes on the new di­rec­tive.

De­lay­ing it could move it from the Aus­trian EU Pres­i­dency to the new Ro­ma­nian EU Pres­i­dency in Jan­uary. That could be a ma­jor set­back, even be­fore the big guns are brought to bear on this bid to strengthen farm­ers’ power in the food sup­ply chain. The Ir­ish gov­ern­ment has wel­comed the di­rec­tive pro­posal as a first step in tack­ling UTPS across the EU, bring­ing sig­nif­i­cant progress in trans­parency and pre­dictabil­ity of sup­ply ar­range­ments, with ben­e­fits for the con­sumer as well as farmer.

In ne­go­ti­a­tions, it has in­tro­duced amend­ments en­sur­ing that Ireland’s unique milk cheque sys­tem is not in­ad­ver­tently af­fected by a 30-day pay­ment rule in the di­rec­tive, and amend­ments to text that raised con­sti­tu­tional is­sues for Ireland in terms of, for ex­am­ple, the is­sue of fines and the bur­den of proof. Na­tional com­pe­ti­tion and con­sumer pro­tec­tion bod­ies will also have their say. Here, the Com­pe­ti­tion and Con­sumer Pro­tec­tion Com­mis­sion view is that their dual man­date is to pro­mote com­pe­ti­tion, and to pro­tect the in­ter­ests and wel­fare of con­sumers, and a ded­i­cated and fo­cused sec­toral reg­u­la­tor should be es­tab­lished to carry out the work of the new di­rec­tive.

The CCPC is “con­cerned about the im­pact of the cur­rent pro­pos­als on con­sumers”, and says “con­sumers could end up pay­ing more for food, for two rea­sons, first, be­cause some gro­cery mar­kets could be­come less com­pet­i­tive and, sec­ond, that the not in­signif­i­cant cost of this pro­posed di­rec­tive will inevitably be passed onto con­sumers”.

CCPC chair­per­son Isolde Gog­gin has also called for the Ir­ish food in­dus­try not to be “put at a dis­ad­van­tage com­pared to their UK coun­ter­parts which most likely will not be the sub­ject of the pro­posed di­rec­tive”, af­ter Brexit. It is in­deed un­for­tu­nate that the food in­dus­try dis­rup­tions caused by Brexit and by the new di­rec­tive co­in­cide.

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