New rules to protect farmers against unfair trading practices 

This article is brought to you in association with the European Parliament.

• Member states to end cross-border unfair trading practices on their own initiative 
• Farmers to receive better protection from buyers both inside and outside the EU 
• Information exchange between EU countries to coordinate responses 

On Thursday, Parliament adopted new measures to protect European farmers from unfair trading practices by buyers of agricultural products.

With 555 votes in favour, 0 against and 26 abstentions, MEPs gave their final green light to new rules that oblige national authorities to cooperate on the issue of unfair trading practices, with the aim at ensuring that farmers receive fair remuneration for their work. Cases of cross-border unfair trading practices damaging farmers and small producers of agricultural products will as a result be prevented, investigated, and punished.

Stopping cross-border unfair trading practices on member states’ initiative

To strengthen the protection of farmers, the new legislation will allow member states to intervene automatically and stop cross-border unfair trading practices on their own initiative without needing a complaint from a producer. This new system will replicate the protection regime for geographical indications in the single market.

Tackling unfair trading practices by buyers located outside the EU

To prevent operators from circumventing the law by moving outside of the EU, the new rules also seek to protect producers from the unfair trading practices of non-EU buyers. Buyers based outside the EU will have to designate “a contact person responsible for the EU” in case an investigation is opened against them. This person will be the primary point of contact for enforcement authorities and will be obliged to facilitate investigations into unfair trading practices.

Cross border information exchange

The regulation allows national enforcement authorities to inform each other about unfair trading practices or a risk of them taking place, through the internal market information system – an existing EU IT system for exchanging information between public administrations in different member states. This exchange is intended to have a deterrent effect and will ensure rapid and coordinated responses to stop unfair trading practices.

Quote

Rapporteur Stefano Bonaccini (S&D, IT) said: “We have turned what could have been a simple administrative file into a powerful act of economic and social justice. We are thus sending a clear message: farmers will no longer be forced to submit to the unfair demands and behaviours of large buyers and retailers.

Today, Europe is proving that it can listen and take action. We stand with those who need support the most, strengthening protections for small producers and making sure we have an agri-food supply chain that is fair, transparent, and free from exploitation.”

Next steps

The new rules now need to be approved by Council. They will apply 18 months after being published in the EU Official Journal.

Background

The Unfair Trading Practices (UTP) Directive adopted in 2019 protects farmers from practices such as late payments or short-notice cancellations when selling their products to big supermarkets and food processing companies. However, as around 20% of the agricultural and food products consumed in the EU come from another member state, the new regulation on cross-border cooperation among authorities responsible for the enforcement of the UTP Directive aims to improve cooperation between these authorities in cases of unfair trading practices where suppliers and buyers are in different member states.