Changes from report parliamentary committee draft to plenary report

Strengthening farmers’ position in the agri-food value chain is still one of farmers’ main demands following the protests in Europe in early 2024. Faced with a highly fragmented farming sector, while actors downstream are grouped into powerful structures, farmers find themselves in a weaker position of power and have very limited bargaining power.

In light of that asymmetry, balanced power relations in the value chain must be restored. The proposed reform of Regulations (EU) No 1308/2013, (EU) 2021/2115 and (EU) 2021/2116 by the European Commission achieves that to some extent by introducing a number of mechanisms designed to put producers in a stronger position.

Among the planned developments, the amendment of Regulation (EU) No 1308/2013 introduces the possibility of using new terms like ‘fair’ and ‘equitable’. While that approach is a step in the right direction, since it allows farmers to use marketing tools to add value to their products, the current definitions of those terms are too vague. There is a risk that more demanding national systems will be made weaker. The criteria for how those terms are used should therefore be made clearer.

A number of elements could also be introduced to improve the definition of the term ‘short supply chain’. Firstly, the direct connection between producer and consumer should at least involve European production in order to prevent products imported from third countries from bypassing the scheme. Secondly, the number of intermediaries should be limited and geographic proximity should be specified to include distances or transport time as criteria.

Contracting is one of the cornerstones of the European Commission’s proposal. It is essential in the milk sector, where it enables more transparently regulated trade relations in a market where farmers have to deal with considerable price fluctuations. The principle of contracting must also be supported in other farming sectors, while providing the possibility for derogation if a Member State’s farming sector so requests. Derogation does not affect the possibility granted to farmers, producer organisations (POs) and associations of producer organisations (APOs) to request that a contract be drawn up. That derogation could not be applied to the milk sector. The sugar sector should also be able to continue to enjoy some of its own specific characteristics.

In a number of sectors, the need to be able to set up POs, depending on the product’s final destination, is necessary to ensure certain sectors are strengthened with regard to first purchasers. At the same time, the Commission’s proposal to introduce specific POs for organic production does not seem suitable, because it could pit production models against each other.

The Commission’s intention to grant producer organisations that have not been recognised possible derogations from competition law is a measure designed to simplify and safeguard many existing practices. However, the system should be regulated to benefit non-recognised producer organisations by starting a recognition process. The possibility of derogations from Article 101 TFEU rules for associations of producer organisations if they do not carry out a real economic activity is also a step forward. However, simply taking account of national production could act as a brake in certain sectors, and an alternative threshold of no more than 5 % of European production for ‘managing’ associations of producer organisations should be introduced.

With regard to competition law and the derogations provided for in Article 210a, the concept of ‘sustainability’ should be defined in more detail in order to assess the three following aspects of sustainable development: economic, social and environmental. In particular, it is proposed that objectives be added with regard to farms’ economic resilience, fair remuneration for producers and the preservation of rural areas.