COMAGRI 2 May 2017

Study'Agricultural Interbranch Organisations in the European Union' (Arcadia International, LEI Wageningen)

Presentation by DG Agri, Unit G 1 – governance

of the agri-food markets

Annette Kliemann

Interbranch organisations (IBOs)• Self-regulation tool to govern the food chain

• Vertical entities which cover at least production and one other stage of the food chain (manufacturing and/or distribution/ retail)

– Delineation with producer organisations

– IBOs do not engage themselves in a commercial activity

• IBOs stimulate dialogue between food chain operators and with MS bodies. They are a medium to share knowledge and best practices and can help increasing market transparency.

• IBOs existed in fruit and vegetables, tobacco and olive oil sector for some time. 2013 reform made rules on IBOS applicable to all agricultural sectors.

Study on Interbranch Organisations in the EU

• Objective of the study: Mapping exercise, what is the status quo of IBOs in the Union ?

• Three main topics

• Overview about national legislation

• Inventory on the existing IBOs (1/6/2016)

• Analysis of the role which IBOs play in the food supply chain, factors which influence their functioning and benefits offered by IBOs (5 case studies)

National legislation on IBOs

Regulation 1308/2013 is directly applicable, but 19 MS* adopted national laws with more details on

- Recognition process and objectives

- Extension of rules and rules on representativeness of the IBO

- Extension of fees (and possibly sanctions for non-payment)

France has a long tradition of IBOs. But also NL, vertical cooperation in form of productschappen

10 MS adopted legislation after 2013 reform

*AT, BE, BG, CZ, CY, DE, EL, ES, FR, HR, HU, IT, LV, MT, NL, PL, PO, RO, SK

Inventory of existing IBO

• IBOs recognised only in 8 MS (FR, ES, EL, HU, IT, NL, PT, RO).

• Currently 123 IBOS (119+4) exist.

• 63 IBOs in France, 27 in Spain.

• 85 national IBOS, 38 regional IBOs, mainly in the wine sector.

• New development: one transnational IBO for the tobacco sector, recognised in Italy.

• Historically, IBOs have been often created in response to a crisis or urgent problem for the product. Challenge then: how to work beyond the crisis…

Inventory of existing IBO

Sectorial distribution

Source: Arcadia International

Budgets vary

Source: Arcadia International

Funding can come from subsidies, but also – quite importantly –from extensions of fees, 'contributions voluntaires obligatoires'

Inventory of existing IBO

• Representativeness of the various chain levels rarely reaches 100%, but higher for primary production, between 80-95%

• Modern retail less represented

• Top objectives of IBOs

• Improvement of knowledge, sharing of best practices (e.g. contracts), create transparency

• Promotion of consumption of the product

• Research activities (on the product, but also digitization, logistics)

• Interlocutor of government bodies

Reasons why some MS neither have legislation or IBOs

• Lack of awareness and knowledge, operators uncertain how to start

• A certain distrust towards vertical cooperation

• Slow uptake of horizontal organisation forms such as producer organisations

• On the other hand, strong cooperative structures or existence of functioning vertical structures in a MS might not create an 'appetite' for creation of IBOs in addition to existing cooperations

• Lack of understanding what the benefits of an IBO could be

Analysis – What influences the functioning and effectiveness of an IBO?

• (Lack of) stable income base, funding, extension of fees

• (Lack of) awareness, how to start…

• Size of the IBO – consensus harder to find within larger IBOs

• Multiplication of IBOs – who represents the chain ?

• Clear identification of tasks of the IBO

• Clear rules – also in the field of competition – facilitate their work

• Relationship with State authorities, in particular for recognition and extension of rules and fees

• Transparency is key (on extension of rules and fees, on research)

Analysis – Benefits of the IBOs

• Benefits of IBOs not only for farmers, but for the entire chain

• IBOs= platform for supply chain actors to discuss

• Dissemination of knowledge, share best practices, training

• Promotion of product, helping finding export markets, develop standards, including contracts, relevant research

• Speak with one voice and act as interlocutor of the chain with e.g. government bodies. Entry point for discussing regulation and its impact on the sector.

• Avail of certain CMO provisions, such as 210 CMO

More information

Interbranch organisations

https://ec.europa.eu/agriculture/producer-interbranch-organisations/interbranch-organisations_en

Conference on interbranch organisations

https://ec.europa.eu/agriculture/events/conference-role-interbranch-organisations-food-supply-chain_en

Study on interbranch organisations

https://ec.europa.eu/agriculture/external-studies/2016-interbranch-organisations_en

Interbranch organisations (IBOs)Important provisions in Regulation 1308/2013 (CMORegulation):

• Article 157,158 CMO : Recognition (by MS)

• in a specific agricultural sector

• account for a significant share of the economic activities ina given geographic area

• Recognition obligatory for certain sectors (tobacco, oliveoil, olives, milk, 161, 162 CMO)

• Article 164, 165: Extension of rules and of fees to non-members

• Representativeness

• MS decides on whether rules are extended, notifies COM

• Article 210: Exemption from the competition rules undercertain conditions

• Notification to COM