Ban on Below Cost Purchasing Needed Now

IFA President Francie Gorman is calling on Minster for Agriculture Charlie McConalogue to recognise the need for additional legislative powers for the Agri Food Regulator and the need for additional measures in the EU Unfair Trading Practices Directive (UTP’s) to strengthen the position of farmers in the agri-food chain.

European Commission President Ursula von der Leyen made recent comments that farmers should be given increased protection from buyers and dominant food buyers should not be permitted to purchase agri food products below the cost of production.

Francie Gorman welcomed the recent announcement of the establishment in July of a new EU Agri-food Chain Observatory that aims to bring increased transparency on prices, structure of costs and distribution of margins in the supply chain across all EU member states. 

“Our own Minister can do more immediately with our national legislation to protect the livelihoods of farmers,” Francie Gorman said.

“Ireland is one of the only EU members states which did not add additional legislation to the EU UTP’s Directive to help stamp out practices which are putting farmers out of business, such as below cost buying from farmers and below cost selling by retailers,” he said.

“The dominance of big food buyers including large retailers operating in Ireland today have a dominant position over farmers in the food supply chain and the current legislation does not go far enough to level the playing pitch for farmers,” he added.

The establishment of An Rialálaí Agraibhia (The Agri-Food Regulator) last December was a positive first step in addressing the imbalance of power in the food supply chain in Ireland, but this office must be given significant powers to tackle the big food buyers and strengthen the position of farmers.

There is an ongoing review of the EU UTP legislation that is due in late 2025 and there is an opportunity to make all food buyers pay at least the cost of production to farmers.

“Covering the cost of production is clearly not enough. Farmers, like everyone else, have to live and they need to have a margin to have a sustainable family farm food production model in Ireland. This is step in the right direction, but it must be built on into the future,” the IFA President said.

The EU Directive on unfair trading practices entered into force on 1 May 2019 and required Member States to transposed into national law which Ireland did in 2021.

The UTP Directive bans 16 practices that can have harmful effects on the weakest actors in the chain, notably farmers and smaller suppliers.

Throughout the EU, enforcement of the Directive is gaining traction and will contribute to an ever-growing degree of protection of farmers and weaker suppliers.

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