top of page

Backing farmers and suppliers - the Agricultural Organizations and Supply Chain Act.

Updated: Jun 28, 2023


Eye of a cow

The Agricultural Organizations and Supply Chain Act in brief


Paying late, ordering first and then canceling at short notice - this kind of approach poses a major challenge to producers or suppliers, especially when it comes to quickly perishable foods. But such unfair trade practices are now having a hard time in the food chain. This is because the Agricultural Organizations and Supply Chains Act (AgrarOLkG) has been in force since June 9, 2021.


Thus, the Agricultural Market Structure Act (AgrarMSG) from 2013 was adapted to the so-called UTP Directive (Directive 2019/633), which was adopted by the European Parliament and the Council of the European Union in April 2019 (Source).


By prohibiting certain business practices, the main aim is to protect producers and suppliers with annual sales of 350 million euros or less. For example, according to the AgrarOLkG, buyers may no longer pass on storage costs to suppliers or return unsold goods and cancel orders for perishable agricultural and food products at short notice. This should enable equal negotiations and contracts and thus lead to more fairness throughout the supply chain (Source).


Although both laws require companies along the supply chain to scrutinize each other more closely, the Agricultural Organizations and Supply Chain Act is not to be confused with the Supply Chain Due Diligence Act (LkSG). While the AgrarOLkG serves to protect companies from each other, the LkSG focuses on protecting human rights along the supply chain (Source).


More info on the Supply Chain Due Diligence Act? Go this way.



More sources to read and delve into:


Comments


bottom of page