Last week, the European Commission urged farmers to come forward with tales of unfair trading practises (UTPs) as it launched a pan-EU consultation to achieve a fairer food supply chain. Producers and other stakeholders are encouraged to address the shortcomings and unjust practises that are holding them back so the Commission can examine what might be needed.
Speaking to Produce Business UK, Copa and Cogeca Secretary-General Pekka Pesonen explains how the impact of UTPs are often higher when it comes to perishable goods such as fruit and vegetables –– which is why the European farming cooperative is demanding legislation to solve the problem once and for all.
“For example, it can happen that a supermarket agrees with a farmer at the start of the season to supply them with 20, 000 lettuces, but then due to other circumstances, the supermarket representative turns round at the last minute and cuts the order by half stating that consumers are eating less than expected,” Pesonen tells PBUK.
“This leaves the farmer in a very difficult position as he has planned his production for 20,000 lettuces and yet he is forced to accept 10,000 and there is nothing he can do about it.
Pesonen, who welcomes the Commission’s consultation but says that it doesn’t go far enough, adds how late payments is another mainstream UTP within the industry.
“This also often happens in the fruit and vegetable sector. For instance, the farmer sells his nectarines to the supermarket which are sold within a few days yet, even if the supermarket gets paid immediately, the farmer will only be paid 60-90 days or more later. Is that fair?
“The supermarket will be profiting from the money that he owes to the farmer. That is why we need legislation at EU level that defines UTPs and with independent oversight and enforcement by an authority to combat them and apply significant sanctions to those that break EU law”.
Voluntary schemes “do not work”
Pesonen believes that the huge imbalance of power in the food supply chain leaves Copa Cogeca with no choice but to call for legislation to curb UTPs.
Moreover, he claims the Supply Chain Initiative (SCI) –– an optional scheme developed by retailers and processors with the aim to increase fairness in commercial relations along the food supply chain where members agree on a set of principles –– is ineffective and introducing any other kind of non-mandatory programme is pointless.
“Market transparency also needs to be increased,” he adds. “Improved information will enable all operators in the food supply chain to make more Informed decisions.”