UK sets the standard on the supply chain

editorial image

Reports suggest that Agriculture Commissioner Phil Hogan is looking to the UK as an example of best practice in dealing with unfair trading practices (UTPs) in the food supply chain.

The UK system of a legislative code of practice and an independent Groceries Code Adjudicator enshrined in law is unique in Europe, and has recently become the subject of great interest in the EU as member states attempt to make their food supply chains fairer and more equitable.

Discussions on food chain issues in the EU have accelerated since the turn of the year, with a report on unfair trading practices due before both the European Parliament’s Agriculture and Internal Market committees in coming weeks. This follows on from a communication published by the European Commission in 2014.

Whilst the commission did not propose any new legislation, it committed itself to studying the different approaches taken by other member states towards tackling unfairness in the supply chain.

In the meantime, the voluntary ‘Supply Chain Initiative’ continues, albeit without the involvement of farmers due to the lack of proper independent oversight (like an Adjudicator) to take anonymous complaints and raise sanctions. Last week, Commissioner Hogan told journalists that [so far] “voluntary code of conduct has not worked” and he echoed calls from the parliament’s Agriculture Committee that the issue needed dealing with once and for all.

Irish MEP Mairead McGuiness (European People’s Party) will now present a report on the current situation, as well as proposals for future action, to the parliament on 16 April.

Commissioner Hogan confirmed his officials would produce a report on the state of play in the supply chain before the end of the year and that the UK example would be studied closely.

Super-levy repayment

extension granted

Last week, member states on the EU’s management committee voted overwhelming in favour of changing the payment structure for member states faced with super-levy fines.

Those who have exceeded their quota limit this year will now be able to repay their super-levy fine in instalments over three years following support for the proposal from the 22 member states.

The only countries to oppose the move were Bulgaria, Czech Republic and Slovakia.

The Netherlands, Belgium and France all abstained.

Those member states who are facing large super-levy fines (0.27€ per litre over the limit) – Ireland, Lithuania, Germany, Poland and Denmark – all voted in favour of the move. Mansel Raymond, chairman of Copa milk working party, welcomed the news but added that additional action is crucial.

The European Commission later confirmed that farmers were not compelled to defer their payments and that any arrangements where dairy processors paid the fine up front, and were subsequently reimbursed by producers, would still be permitted.

Milk market outlook

Last week, the European Commission presented its medium-term outlook for the milk sector.

In a presentation to the Copa working party on milk, the main headline was that milk would remain ‘white gold’ for the next decade despite the current difficult market situation.

The UK is expected to be one of the member states to see the highest increase in milk production. The commission stated that world demand was continuing to grow steadily and would increase by 12 million tons in the next ten years.

It also claimed there would be a 2.1% increase in global imports of dairy products, with the EU fulfilling most of that extra demand.

On a more global outlook, the commission said New Zealand milk production would be limited by natural constraints and that China would contribute less than during the previous decade.

However, it projected there would be significant additional demand from African and Asian countries.

In the same presentation, DG AGRI (the commission department responsible for agriculture) confirmed that it expected production of beef, poultry and pork to rise whilst the sugar market was likely to contract.