August 12, 2020

The Government prohibits “loss sale” and misleading promotions and insists that prices will not rise

The Government has given verde green light ’to a royal decree that adopts certain urgent measures to guarantee fair prices to farmers and ranchers, which includes the prohibition of‘ sale at a loss ’and promotions of a misleading nature. “Destruction of value is prohibited in each element of the chain, neither the industry nor the distribution can sell below the price that has cost to produce it, with the exception of perishable products to avoid food waste, ”said Planas, who has insisted that there will be no increase in consumer prices.

“The Government believes that this is possible. If each one assumes his responsibility within the chain, it is perfectly possible that prices do not increase and that, at the same time, there may be a better remuneration for his work to farmers and ranchers, ”he said. In the press conference following the Council of Ministers, Planas has affirmed that the Government has responded in a “record time of three weeks” to the urgent demands of farmers and ranchers, whose claims “have a reason for being and have to be addressed”. “Farmers and ranchers have mobilized for legitimate claims of fair prices, which have been answered with an agricultural dialogue table, many of these claims are right and have to be addressed,” said Planas.

“The Government is a government of dialogue and action, which has heard good arguments and that is why we respond with this royal decree,” said the head of Agriculture, who has highlighted, among the factors that have caused the price problem , the volatility in supply and demand, the growing international competition and the climatic situation, to which is added the atomization against industry and distribution when negotiating prices. “There is a clear imbalance in the chain and the Government wants a rebalancing between the links and a transparency in the formation of prices, ”said Planas. Planas has recognized that production costs have increased in recent times, which resulted in an “imbalance” between the links in the food chain, with particular damage to farmers and ranchers, who, in their opinion, were in a “more unfavorable” situation. Among the main measures approved are the prohibition of ‘sale at a loss’ and of commercial promotions of a misleading nature and, as the main novelty, to force each operator to pay a price equal to or greater than the production cost of the product to the immediately previous one. Likewise, it is prevented that the operator who makes the final sale of the product to the consumer can pass on to any of the previous operators their business risk derived from their commercial policy regarding prices offered to the public.

Likewise, in anticipation of the requirement of the current European regulations on the subject, the publicity of serious and very serious infractions is foreseen, with dissuasive but also punitive purposes. In the case of the sanctions imposed by the General State Administration, this publicity will be given through the website of the Ministry of Agriculture, Fisheries and Food. The inclusion of the cost of production in the price as a minimum element of the contracts is also foreseen as an outstanding novelty. In the original Law, the set of objective factors is taken into account in the composition of the price, verifiable, not manipulable that must be expressly established in the contract, although it does not expressly include a factor that is considered essential for determination such as the cost of production. In order to ensure compliance with these premises, the standard incorporates an exemplary list of elements to consider for farms – such as seeds, fertilizers, pesticides, energy or machinery – and indices that, among others, can be used to ensure that objectivity in its determination, such as those published by the Ministry of Agriculture, Fisheries and Food. Likewise, the rule includes a more fractional taxation on the payments of young farmers for the aid of the Common Agricultural Policy (CAP), which they can now pay in four years. Consequently, the IRPF regulations are adapted to allow, in this case, as in other analogs, to pay taxes in several years. It is a measure that, being its very relevant effects, has zero cost for public coffers because it allows the payment of the tax along the annuities of execution of the aid, without decreasing the final volume of public revenue but adapting it to the framework temporary when help is received.

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