Habemus Food Chain Law! Without surprises, the Congress of Deputies has given the final green light this Thursday to the Senate amendments to the reform of the Law 12/2013, of August 2, on measures to improve the functioning of the food chain, known as ‘Law of the Chain’. In this way, the parliamentary process ends and the Lower House puts an end to the reform process that began in early 2020 as a result of the historic mobilizations of farmers and ranchers throughout Spain. The renewed standard, which adapts the European directive on commercial practices, enshrines the prohibition of producers selling below their costs of production and introduces exceptions for the case of the Canarian banana, faced with stiff competition from multinational banana companies and their low prices.
What’s more prohibits selling at a loss, regulates commercial promotions and reinforces the role of AICA (Food Information and Control Agency).
The ‘yes’ of Congress comes in the midst of agitation in the countryside, when there is little left to know the calendar of the demonstrations promoted by the main agrarian organizations Asaja, COAG and UPA against escalating production costs and demanding that the new standard be rigorously applied. Precisely the deployment of this Law, pioneer in the European Union when it was approved in 2013, is entrusted to the Minister of Agriculture Luis Planas as the main measure to solve the difficult situation facing the Spanish countryside. This Thursday, in a brief intervention before the Plenary, Planas stressed that this Law «marks a before and after in food chain regulation » and has considered it as “an important advance” for the sector. Despite which, he has recognized that the new rule “alone will not guarantee that all problems are resolved”, but hopes that it will be useful for current business relationships.
Less optimistic have been expressed both from the opposition (PP, Citizens and Vox) and from the partners of the Executive. While the ‘popular Joaquín María García assured that lhe great promises of reform “will be unfulfilled”Since its regulation “does not guarantee one euro,” ERC deputy Xavier Eritjá already assured that “it will be time to reform it again.” For his part, the president of the Agriculture Commission and PNV deputy Joseba Agirretxea acknowledged “A bittersweet taste” with the rule and found that the substantive issues could not be resolved.
Similarly, one year after the reform comes into force, it is foreseen that six months after its entry into force, the Ministry of Agriculture will publish the criteria on the different factors involved in production costs of agricultural and fishery products and that in the first year of its validity, this Ministry prepares a report on the application of this norm.
Prices above production costs
Specifically, the standard establishes the modification introduced in the heat of early 2020 ‘tractorates’ for which producers will not be able to receive remuneration below their production costs. In the parliamentary process, nuances have been introduced for a sector as particular as that of the Canarian banana, which will see this obligation made more flexible in the face of strong competition from multinational banana producers whose merchandise is placed in the Spanish market at very low prices.
It is not the only novelty. The new regulation also prohibits, in its transposition of European legislation, practices such as selling at a loss, the payment deferrals of agricultural or food products that exceed the legal term and the cancellation of orders within 30 days prior to delivery. It also regulates commercial promotions so that they are mutually agreed between suppliers and distribution.
A strengthened AICA
In another chapter, the standard reinforces the role of the AICA (Food Information and Control Agency) not only from the sanctioning point of view, broadening the assumptions, but it also makes this body the main interlocutor with the European authorities.