According to the Netherlands Authority for Consumers and Markets (ACM), farmers, processors and supermarkets should make more agreements about the production and sale of sustainable agricultural products. The chairman of the board of the cartel watchdog, Martijn Snoep, repeated today that there are ‘from farm to fork’ cooperation opportunities that are hardly used. This concerns, for example, mutual agreements about the price of a product.
Such price fixing is often prohibited because it can lead to unfair competition. The ACM is precisely the body that supervises this in the Netherlands.
But in the case of ‘green’ agricultural products there are exceptions, Snoep said today during a meeting reported by Het Financieele Dagblad. The symposium in The Hague was intended for representatives of the agricultural sector and the supermarket sector, among others. For example, if they want to agree on a higher price for a sustainably grown product, this has been possible since the end of 2021 under certain conditions.
Green goals
Last September, ACM already found that farmers, horticulturists and supermarkets are often reluctant to make use of this option, because they fear that they will violate competition rules. It is also not the case that “everything is possible at once”, a spokesperson for the regulator explains when asked. “It is indeed a sector of which we think: more is possible, make use of it. But parties must meet certain conditions.”
Suppose that agricultural companies, wholesalers and supermarkets mutually agree on a fixed price for a green product, then they must demonstrate, among other things, that that price is necessary to achieve a certain sustainability goal. Examples include animal welfare goals or the use of fewer pesticides.
In any case, the following applies: in order to qualify for legal cooperation, the parties must go beyond the sustainability standards that they must comply with according to the law. They also have to show that the ‘green goal’ cannot be achieved in any other way, so that a price agreement is really necessary for this.
Agricultural agreement
The prices of agricultural products are an important point of discussion in discussions about making the agricultural sector more sustainable and the nitrogen crisis. Many farmers say that they cannot or hardly go green, because this makes their production more expensive, while supermarkets do not compensate them for this. In recent years, farmers have repeatedly blocked distribution centers of supermarkets to draw attention to this.
The agreement between the government and the agricultural sector, which Agriculture Minister Adema wants to conclude, also discusses the price of agricultural products. Adema wrote to the House of Representatives in November that making the food system more sustainable is a task for “the entire chain”, so not only for the farmer, but also for suppliers, processors, banks and supermarkets. According to him, these parties will play a role in, among other things, “organizing a cost-covering price for the farmers”.
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