Sustainability Agreements in the agri-food supply chain

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Sustainable development is a core principle of the Treaty on European Union and a priority objective for the Union’s policies. The Commission committed to implement the United Nation’s sustainable development goals. In line with this commitment, the European Green Deal sets out a growth strategy that aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy and commits to climate neutrality by 2050, including an emissions reduction of least 55% by 2030, compared to 1990 levels.

To achieve these ambitious goals, the Commission announced deployment across all policy areas, including agriculture and rural development. The Farm to Fork strategy proposes ambitious targets to promote the transition to sustainable food systems, actions include: reduced dependency on pesticides and antimicrobials, reduced excess fertilisation, increased organic farming, improved animal welfare, and enhanced biodiversity.

The new Common Agricultural Policy (CAP) for the period 2023-2027 supports efforts to increase sustainability in the production and supply of agricultural products through amended support mechanisms and market rules. Collective initiatives leading to agreements between actors in the agri-food supply chain have the potential to make a significant contribution to a sustainable food system, ensuring that actors in the food value chain (vertically or horizontally) collaborate effectively to deliver agreed outcomes and ultimately contribute to the achievement of the desired goals. For this reason, the new CAP contains an antitrust derogation to the prohibition of anti-competitive agreements.

The derogation allows, under certain conditions, sustainability agreements concluded between primary producers and other actors in the food value chain aimed at achieving higher sustainability standards than those required by law. These higher sustainability standards can pursue the following objectives:

  • Environmental objectives, including climate change mitigation & adaptation, sustainable use and protection of landscapes, water and soil, the transition to a circular economy, including the reduction of food waste, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems;
  • The production of agricultural products in ways that reduce the use of pesticides and manage risks resulting from such use, or that reduce the danger of antimicrobial resistance in agricultural production; and
  • Animal health and animal welfare.

The Commission is currently in the process of preparing guidelines concerning the conditions for the application of this derogation by 8 December 2023. As part of this process, in the period February 2022 – May 2022 it is carrying out a public consultation to gather relevant feedback, in particular examples of sustainability agreements that are within the derogation’s scope of application. All stakeholders are strongly encouraged to participate in that consultation to provide input to the drafting of guidelines.

This derogation does not encompass all possible areas of collective sustainability initiatives and stakeholders have the possibility to cooperate on other aspects of sustainability outside of the derogation’s scope of application under the regime of general competition rules.

Whatever their objectives, collective sustainability initiatives raise a number of challenges in terms of governance, design of objectives and standards, possible public support, etc. The future development of such initiatives depends on the knowledge and ability of stakeholders to manage these challenges.

In this context, the ENRD is establishing a Thematic Group (TG) on Sustainability Agreements which will:

  • Understand how sustainability agreements are currently framed and pursued (horizontally and vertically) through the food value chain.
  • Identify some of the challenges and barriers that collective actions around sustainability face, including in the light of regulatory changes.
  • Identify the added value of pursuing sustainability objectives through collaboration.

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