Agriculture Minister Carola Schouten sent a bill to the Lower House on Friday with which she wants to tackle unfair commercial practices. It should give farmers, horticulturists and fishermen a stronger position in the chain.
Farmers, market gardeners and fishermen have, according to the minister, a weaker negotiating position with regard to large and concentrated market parties in the chain. This ensures that they can easily be pressured to accept discounts. According to her, this hinders farmers’ entrepreneurship and makes it more difficult to charge a fair price for the food they produce.
The previously announced plan is in line with legislation in the European Union since 2019 that addresses unfair trade practices in agriculture and horticulture. All EU Member States are introducing legislation in this area. This bill is also part of the package of measures announced in the coalition agreement to strengthen the position of farmers in the chain.
16 unfair trading practices
The Bill on Unfair Commercial Practices in the Agricultural and Food Supply Chain will ban sixteen commercial practices affecting farmers, horticulturists, fishermen and other suppliers of agricultural and food products. By ‘other suppliers’ the minister means, for example, meat processors, dairies and wholesalers who supply to retailers.
Examples of the unfair trading practices claimed by the bill will soon be prohibited are the short-term cancellation of the delivery of perishable products by the customer and the unilateral change of the delivery conditions by the customer.
In the Netherlands there will be a counter where farmers and market gardeners, as well as sales organizations, can report abuses. The Netherlands Authority for Consumers & Markets (ACM) will be conducting system supervision. In addition, the bill offers the Minister of Agriculture, Nature and Food Quality (LNV) the option of appointing a low-threshold disputes committee. Minister Schouten is now working on this.
Customers will be obliged to pay the supplier for fresh products within 30 days. For perishable products, payment must be made within 60 days. This applies to all agricultural and horticultural production, including floriculture, animal feed, seeds and starting material. From now on, the supplier of agricultural products is also entitled to written confirmation of an order. Costs of loss of quality cannot simply be recovered from suppliers.
Clarity for cooperatives
It is important to LTO Nederland that cooperatives are given clarity about how the new legislation will affect payment to members. In many cooperatives there is an advance and a supplementary payment.
LTO emphasizes that the bill is limited to ‘doing business properly’. However, it does not guarantee a cost-effective fair price for farmers and market gardeners. The advocate collects examples. Members dealing with unfair trading practices can report this, anonymously if necessary. LTO documents the experiences for when the law is in effect.