The Spanish agri-food industry is at a crucial moment in its present and future development. At the same time as the negotiations of the CAP 2021-2027, it is important to remember that the overhaul of the Chain Law 12/2013, which regulates the commercial relations of the operators in the food chain, is in full swing. It is not advisable, by the way, from a correct legislative systematic, that at the time of the processing of the Draft Law of RD Law 5/2020, that modifies the referred Chain Law, on urgent measures in the matter of agriculture and feeding, also in transposition is the Directive 2019/633, relative to the unfair commercial practices in the relations between companies in the agricultural and food supply chain, that equally modifies the Chain Law. In other words, the same law is currently being amended through two different procedures and in parallel. 

Such a situation is not reasonable and does not provide legal certainty to a matter as highly relevant as the law that regulates all commercial relations of all operators in the food chain. 

There are numerous challenges facing the industry in this matter, many of which were introduced ex novo by the very amendment of RD Law 5/2020, with the establishment of the cost of production as the cornerstone in the protection of the value of the food chain, which far from providing solutions and certainty, generates doubts, inefficiencies and involves practical market intervention.

Precisely for this reason, the transposition of Directive 2019/633 is the appropriate channel not only for covering the regulatory dossier of yet another regulatory transposition, but also for making this work a useful, modern and appropriate amendment which, in the pursuit of unfair commercial practices, addresses the problem of unfair competition posed by producers in third countries outside the Community, free and unrestricted by the limitations and restrictions of domestic producers; the correct drafting of clear rules on payments for agricultural products and foodstuffs, making a clear distinction between perishable and non-perishable products, the treatment of which has a direct impact on the economic viability of the supplier. Likewise, such transposition should be used to address unresolved issues that have become even more complex since the entry into force of RD Law 5/2020, such as determining which operator, buyer or seller is responsible for proving compliance with legal obligations in the face of possible sanctioning procedures, a circumstance on which the Royal Decree casts not a few shadows. 

Of course, the core issue will be the scope of the effective cost of production introduced by RD Law 5/2020, or the possibility of observing situations of exceptionality in the application of this criterion as a fence for the protection of the value of the food chain. 

In short, the Spanish agri-food sector is proving to be a fundamental pillar in our economy, which is nevertheless facing great clouds in the coming months: the announced cuts in the CAP or the imposition of tariff policies by the United Kingdom, among others. In view of this situation, we must take advantage of this transposition to provide the agri-food industry with a modern law, which respects the best commercial and protective practices, but which can be reconciled in any event with respect for freedom of agreement, free competition, efficiency and flexibility, otherwise we will achieve precisely the unwanted objectives.

You can read the article in Cinco Días.