Considerations on COM(2024)577 - - Main contents
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| dossier | COM(2024)577 - . |
|---|---|
| document | COM(2024)577 |
| date | December 10, 2024 |
(2) Various operators within the agricultural and food supply chain, active at different stages of production, processing, marketing, distribution, and retail, have developed schemes and labels to promote commercial modalities ensuring the fair allocation of value added to farmers and the creation and maintenance of short supply chains. Establishing minimum requirements for the use of optional terms describing those commercial modalities is necessary to increase the transparency and reliability of the use of those terms in the food supply chain, complementing existing food labelling rules, in particular Regulation (EU) No 1169/2011 of the European Parliament and of the Council4.
(3) In the interest of increased trust and fairness along the food supply chain, the terms ‘fair’, ‘equitable’ or equivalent terms, should be used only to designate commercial modalities that ensure stability and transparency in commercial relations between farmers and purchasers and pricing considered equitable by participating farmers, and that support and contribute to the United Nations Sustainable Development Goals, including in a manner that is consistent with Annex I of Directive (EU) 2024/1760 of the European Parliament and of the Council5.
(4) The term ‘short supply chain’ should be used only to designate commercial modalities where a direct connection exists between farmers and consumers that allows to directly exchange on the production process and the product, including by means of distance communication and/or via an intermediary who ensures such exchange at the moment of sale. Alternatively, this term may also be used where a close connection between farmers and consumers within their geographic proximity exists, including in cross-border contexts. This will incentivise consumers to pay prices that fairly remunerate farmers for what they produce, strengthen and contribute to the development of rural areas, improve transparency regarding the origin and production methods of the products.
(5) In light of market conditions, evolving consumer expectations, advances both in marketing standards and in relevant international standards, implementing powers should be conferred on the Commission to ensure uniform conditions for the use of the optional terms designating commercial modalities related to the fair allocation of value added to farmers and the creation and maintenance of short supply chains. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council6.
(6) For those same reasons, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of additional optional terms that are equivalent to the terms ‘fair’ or ‘equitable’.
(7) While Member States may retain or introduce national provisions stipulating supplementary requirements for the use of optional terms for commercial modalities, those provisions should not hinder, limit, or obstruct the use of these terms for products legally produced or marketed in another Member State.
(8) The use of written contracts plays a crucial role in the accountability of operators, raising awareness about the importance of market signals, adapting supply to demand, improving price transmission within the supply chain, enhancing transparency and preventing and addressing unfair trading practices. The rules on contractual relations in the milk and milk products sector should therefore be extended to cover products other than raw milk, while ensuring alignment with the rules on contractual relations applicable to other agricultural sectors.
(9) In order to increase flexibility for Member States and simplify the procedure for the recognition of producer organisations, thereby reducing transaction costs and improving efficiency, the rules on producer organisations should allow for their recognition following a single request covering multiple sectors and products. Moreover, to enhance collaboration between organic product producers, the establishment and recognition of producer organisations by organic product producers should be explicitly provided for. The criteria for the recognition of producer organisations and their statutes should also provide that producer organisations are established at the initiative of farmers and are controlled in accordance with rules that enable farmer members to scrutinise democratically their organisation and decisions. This should not preclude other producers that are not farmers, and non-producers from joining producer organisations.
(10) To promote further sustainable development, which is a core principle of the Treaty and a priority objective for the policies of the Union, and to ensure transparency, stability and fairness in commercial relations between farmers and purchasers throughout the supply chain, Member States should be able to recognise producer organisations that pursue specific aims with optional terms for commercial modalities, such as ‘fair’, ‘equitable’ or equivalent terms, and ‘short supply chain’.
(11) To ensure a fair standard of living for farmers, enhance their bargaining position vis-à-vis processors and other actors in the supply chain and provide for a fairer distribution of added value along the supply chain, the possibility of negotiating contract terms on behalf of their members should be extended to non-recognised producer organisations, including cooperatives, for some or all of their production. To ensure equal treatment with members of recognised producer organisations, this possibility should be subject to appropriate limits. In particular, non-recognised producer organisations benefiting from that possibility should comply with the recognition criteria set at Union level and engage in the activities set out in Regulation (EU) No 1308/2013 of the European Parliament and of the Council7, including concentrating supply and placing their members’ products on the market.
(12) To strengthen the negotiating position of recognised producer organisations and to ensure the viable development of agricultural production, recognised associations of producer organisations should be allowed to negotiate contract terms on behalf of their members, including price, for some or all of their members’ production. This possibility should be allowed, subject to the safeguard that the organisations which are members of those associations are not also members of another association of producer organisations and the volume of products covered by the activities of the association does not exceed 33% of the total national production of any given Member State. In order to maintain effective competition on the market, recognised associations of producer organisations should also not be allowed to negotiate contract terms where those associations include non-recognised producer organisations.
(13) To prevent purchasers from undermining the bargaining position of producer organisations, appropriate safeguards should be established for contacts between purchasers and members of those producer organisations. While purchasers may contact members of producer organisations, those contacts should not undermine the objectives of the producer organisations, or the concentration of supply and placing of products on the market.
(14) Interbranch organisations play an important role in facilitating dialogue between actors in the supply chain, and in promoting best practices, market transparency, stability and fairness in commercial relations between farmers and purchasers throughout the supply chain. It is therefore appropriate to include the promotion of initiatives for the inclusion of optional terms for commercial modalities, such as ‘fair’, ‘equitable’ or equivalent terms, and ‘short supply chain’ in the list of objectives that a recognised interbranch organisation may pursue.
(15) Certain Member States have decided that all deliveries of agricultural products in their territory are to be covered by written contracts between the parties. Where the Member States do not make use of this possibility, farmers, producer organisations or associations of producer organisations can request the use of written contracts. However, due to the weaker bargaining position of farmers and the fear of commercial retaliation by purchasers, it can be difficult for farmers and their associations to make such a request. To increase trust, transparency, and efficiency within the supply chain and to enable all farmers, producer organisations and associations of producer organisations to benefit from the use of written contracts, deliveries of agricultural products in the Union by a farmer, a producer organisation or an association of producer organisations to a processor, distributor or retailer should be covered by a written contract.
(16) To better take into account the signals of the market and to improve price transmission, Member States should be able to require the use of written contracts for the delivery of agricultural products by producers other than farmers, by producer organisations or associations of producer organisations, and to require that purchasers make use of written offers for contracts for the delivery of agricultural products. In the interests of simplicity and reduction of transaction costs, this Regulation should lay down certain exceptions to the required use of written contracts or written offers for contracts and allow Member States to exempt certain deliveries from the required use of written contracts or written offers, while leaving farmers and their associations the possibility of requesting the use of written contracts or written offers when there is no such obligation.
(17) The required use of written contracts for the delivery of agricultural products and the basic conditions for their use should be laid down at Union level, while ensuring that the right of the parties to negotiate all elements of their contracts is not restricted beyond what is strictly necessary.
(18) To encourage parties to reach an amicable settlement in case of disputes over the conclusion or review of a written contract, Member States should establish mediation mechanisms. Member States should inform the Commission about the mediation mechanisms in place in their territory or the establishment of those mechanisms, and the Commission may facilitate exchanges of best practices about those mechanisms.
(19) To facilitate the functioning of price transmission mechanisms, where the final price payable for the delivery of agricultural products is calculated by combining various factors set out in the contract, those factors should include objective indicators, indices or methods of calculation that are easily understandable by the parties. To avoid that farmers are forced to sell systematically below their production costs, the indicators, indices and methods of calculation of the final price should reflect changes in market conditions and production costs of the agricultural products delivered.
(20) Considering the vulnerable negotiating position of farmers and their organisations, recent instances of significant volatility in agricultural input costs and market prices, and the need for a more efficient price transmission within the supply chain, contracts with a duration of more than 6 months should include a revision clause that may be triggered by the farmers and their organisations. Such a clause should permit farmers to request after the 6 months at any moment a revision of the elements of the contract and permit them to end the contract in case no agreement on a revision is reached, without interfering with the right of the parties to negotiate other possibilities for the revision of the contract.
(21) To enhance contractual transparency and contribute to fairer trading practices, Member States should be able to require the registration of written contracts for the delivery of agricultural products.
(22) Certain vertical and horizontal cooperation initiatives concerning agricultural and food products, which aim to apply requirements that are more stringent than the mandatory requirements, can have positive effects on the objective of the common agricultural policy to ensure a fair standard of living for the agricultural community and on the objective of sustainable development of the Union. Therefore, under specific circumstances, such initiatives should not be subject to the application of Article 101(1) of the Treaty on the Functioning of the European Union.
(23) In periods of severe market imbalance, specific categories of collective actions by private operators can contribute to stabilise the sectors concerned. With a view to ensuring that private operators have the necessary resources to implement these actions, the Commission should be able to make available Union resources from the agricultural reserve to support these actions. Member States should also be able to allocate additional national resources.
(24) To enable sugar beet growers to benefit from enhanced contractual clarity and to ensure a harmonised contractual framework while taking account of the specificity of the sugar beet sector, purchase terms in contracts for the delivery of sugar beet should be aligned with the conditions for the use of written contracts in other agricultural sectors.
(25) Regulation (EU) No 1308/2013 should therefore be amended accordingly.
(26) To strengthen the position of farmers in the food supply chain, several provisions of Regulation (EU) 2021/2115 of the European Parliament and of the Council8 should be amended as regards the types of intervention in certain sectors. These amendments aim to support farmers to become or remain members of producer organisations or associations of producer organisations recognised under Regulation (EU) No 1308/2013, in light of the positive role these organisations and associations play in strengthening the bargaining power of producers. Moreover, to ensure a more efficient and targeted support of producer organisations through the CAP Strategic Plans, the possibility of an increase of the Union financial assistance to operational programmes in certain sectors should be provided for.
(27) The value of production of fruit and vegetables marketed by producer organisations compared to the total value of the fruit and vegetable production remains in certain Member States far below the Union average. Among the financial incentives available, Member States can already provide national financial assistance as provided for in Article 53 of Regulation (EU) 2021/2115 to producer organisations located in certain regions where the degree of organisation is significantly below the Union average. With a view to enhancing competitiveness, strengthening farmers’ positions in the value chain and setting up new producer organisations, a financial incentive consisting in an increase of 10 % of the Union financial assistance should be granted to producer organisations in Member States, in which the degree of organisation of producers is below 10 % for 3 consecutive years preceding the implementation of the relevant operational programme.
(28) With a view to facilitating the generational renewal in the farming sector and encouraging entrance of new producer members in producer organisations in the fruit and vegetables sector and in other sectors as referred to in Article 42, point (f), of Regulation (EU) 2021/2115, a particular incentive should be granted to young farmers and new farmers who join a producer organisation recognised under Regulation (EU) No 1308/2013. Consequently, a possible increase of 10 % of the Union financial assistance for expenditure related to investments made at the premises of a young farmer or a new producer who joins a recognised producer organisation for the first time should be made available.
(29) Given the recurrence of adverse climatic events, natural disasters, plant diseases or pest infestations in recent years, it has proven useful for producer organisations and associations of producer organisations to be able to redirect funds, including Union financial assistance within the operational fund, to interventions required to address the consequences of those events. It is therefore necessary to provide for the possibility of increasing the Union financial assistance laid down in Article 52(1) of Regulation (EU) 2021/2115 from 50% to 70% of the actual expenditure incurred, under certain conditions.
(30) In order to support the setting-up of types of intervention in the other sectors referred to in Article 42, point (f), of Regulation (EU) 2021/2115, Member States should be allowed, as of 2025, further flexibility to adjust the allocation of funds to these sectors by using up to 6 % of their allocations for direct payment.
(31) Regulation (EU) 2021/2115 should therefore be amended accordingly,
(32) With a view to ensuring that Union resources from the agricultural reserve can be made available to the Member States in order to support collective actions by private operators in periods of severe market imbalance, the possibility to use the agricultural reserve should be extended to the support of collective actions when the Commission decides that competition rules do not apply to those actions.
(33) Article 16 of Regulation (EU) 2021/2116 of the European Parliament and of the Council9 should therefore be amended accordingly.
(34) In order to give the market operators the necessary time to adapt and to allow the Commission to assess existing national schemes and practices, the application of the rules relating to the reservation of the optional terms ‘fair’, ‘equitable’ and their equivalent terms, and the term ‘short supply chains’, should be deferred by 2 years after the entry into force of this Regulation. Additionally, in order for operators to adapt their contractual relations to the new rules on written contracts, the application of those rules should be deferred by 18 months after its entry into force.