A task force recommended the introduction of basic protections including maximum payment periods and mandatory written contracts ©123RF
A task force recommended the introduction of basic protections including maximum payment periods and mandatory written contracts ©123RF

Farmers need protection from unfair buyers

15 November 2016

The EU should put in place new rules to protect farmers from unfair trading practices, a task force has said.

The Agricultural Markets Task Force (AMTF) said that while voluntary initiatives had been useful to a degree, they have not completely eradicated the “fear factor” farmers face when making a complaint.

As part of a series of recommendations made in a report to the European Commission (EC), AMTF said EU level legislation should be introduced to provide basic protection against unfair practices, including maximum payment periods and mandatory written contracts. 

It also said an enforcement regime should be introduced, potentially in the form of an adjudicator, with the power to conduct their own investigations into unfair practices.

Phil Hogan, the EU commissioner for agricultural and rural development, welcomed the report and said he would consider it “with a view to delivering the appropriate policy response”.

AMTF, formed of 12 independent experts, was established by the EC in January this year in response to rising concerns that greater market orientation of EU policies and increasing trade liberalisation were leaving EU farmers more exposed to changes in the global food supply chain. It was tasked with improving farmers’ position and voice.

Its report recommended:

  • adopting measures to improve market transparency, including mandatory price reporting
  • improving risk management toolkits to make them “more attractive and coherent” to farmers, as well as educating farmers on how to use futures markets to reduce risk
  • simplifying regulations around cooperative bargaining “so that farmers do not need to hire legal counsel when planning to cooperate”

The National Farmers' Union (NFU) welcomed the AMTF’s recommendations, in particular the calls for greater market transparency.

“The NFU has often raised the issue of the black hole in market data on the processor-buyer end of the supply chain which stifles trust, collaboration and the development of market risk management tools.” said Meurig Raymond, NFU president.

“Adopting [mandatory price reporting] has the potential to create a much more joined up approach to managing market risk in the UK and the European Union.” 

Raymond also said many of the recommendations in the report were also relevant to the UK and called on both the EU and the UK government to “accept these suggestions and come forward with legislative proposals to enact them”.

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