Such chain agreements have been initiated in the new Common Agricultural Policy and would no longer be considered ‘cartel formation’.
In the new agricultural policy, it has become possible not only to promote climate and environmental goals in agriculture through targeted subsidies but also to allow chain-wide contractual agreements for certain products. Under the now partly outdated European rules, such contracts could be regarded as anti-competitive and/or market-distorting.
Commissioner Margrethe Vestager (Competition) was already tasked during the establishment of the Green Deal and Farm to Fork strategies to relax strict rules to enable eco-schemes within agriculture. The new guidelines clarify under what conditions agreements can be made within the agrifood sector to support sustainability initiatives.
Commissioner Vestager highlighted the need to broaden the rules within agriculture. “Agricultural production currently faces major challenges regarding sustainability, ranging from animal welfare and biodiversity to natural resources, health, and climate change.
We want to ensure that market participants in the agrifood sector can develop joint sustainability initiatives to meet these challenges, while respecting our competition rules,” Vestager stated.
Agriculture Commissioner Janusz Wojciechowski said at the announcement of the consultation round: “The transition to a more resilient and sustainable agricultural production requires better cooperation throughout the supply chain, so that farmers receive a fair return for their efforts to make their production more sustainable than what is currently mandatory.”
The intention is for the new sustainability agreements to be legally valid by the end of this year. A symposium on the topic will also take place later this spring.