The legislation responds to challenges faced by farmers including increasing risks, rising input costs, more stringent production requirements and poor incomes. The proposals, published December 2024, followed widespread farmer protests and a subsequent Commission ‘non-paper’ recommending a series of measures to improve the position of farmers in the supply chain, along with recommendations from the Strategic Dialogue on the Future of EU Agriculture, concluded in September 2024.

So, what is included in the final legislation?

Contractual relations

Under the legislation, written contracts will generally be required for the delivery of all agricultural products, including milk and milk products in the EU. Requirements the milk and milk products are outlined under Article 148, and for other agricultural products, Article 168 of the CMO.

Written contracts must:

• be made in advance of delivery
• be in writing
• include the price payable for delivery. Price should be static and set out in the contract or calculated by combining various factors set out in the contract including objective indicators, indices or methods of calculation. Price should reflect changes in market conditions and production costs.
• Include the quantity and quality of agricultural products to be delivered.
• Outline payment details and arrangements for collection/delivery of products. 

However, there are some exceptions.

A written contract is not be required when products are delivered by a member of a PO or cooperative to the PO or cooperative of which it is a member, but only if the PO or cooperative transparent rules for determining the price and the rules have been adopted democratically.

A written contract is also not required when delivery and payment takes place simultaneously or if the delivery is made for free or if product is disposed which is no longer fit for sale. However, a farmer, PO or an APO can always request a written contract.

Member States can decide that a written contract is not necessary in other cases including:

• Where the first purchaser of agricultural products is a micro or small-sized enterprise as outlined under Recommendation 2003/361/EC (employs <250 people and an annual turnover < EUR 50 million).
• The total value of the delivery is below a national threshold, which must be < EUR 10,000.
• The delivery and payment of the agricultural products concerned take place simultaneously or, for justified reasons, at the latest within 3 working days
• Delivery concerns agricultural products subject to seasonal supply, demand fluctuations or perishability.
• Delivery concerns agricultural products that are subject to traditional or customary selling practices

Member States will also be required to establish a mediation mechanism where no mutual agreement to conclude a contract is reached. This aims to ensure that an amicable settlement can be reached in case of dispute.

Purchase terms for sugar beet

Purchase terms for sugar beet are amended so the sector is aligned with the contract requirements for other agricultural products.

Sugar beet contracts must:

• Be made in writing for a specified quantity of beet before delivery
• Delivery contracts can be pluriannual. Where a contract has a minimum duration of more than 12 months, it must include a revision clause that can be triggered by the farmer, farmers' association, PO or association of producer organisations APO.

The rules on pricing are also enhanced.

• Contracts must provide for the price to be determined using objective, accessible and understandable indicators, indices or calculation methods that reflect market developments, production costs affecting farmers' remuneration, quantities delivered, and the quality or composition of the sugar beet.
• Member States may establish and publish relevant indicators, including on the basis of data from interbranch organisations, the EU Agri-food Chain Observatory (AFCO) or other objective sources, although contracting parties remain free to use those or other indicators.

Protection for meat terms

31 meat terms are provided protected designation to enhance transparency. The following terms are protected:

1. beef 2. veal 3. pork 4. poultry 5. chicken 6. turkey 7. duck 8. goose 9. lamb 10. mutton 11. ovine

12. goat 13. drumstick 14. tenderloin 15. sirloin 16. flank 17. loin 18. ribs 19. shoulder 20. shank 21. chop 22. wing

23. breast 24. thigh 25. brisket 26. ribeye 27. T-bone 28. rump 29. bacon 30. steak 31. liver

 

Additionally, the term ‘meat’ cannot be used on cell or tissue culture derived foods.

Optional terms for commercial modalities

To enhance transparency and reliability within supply chains, the legislation introduces specific conditions for voluntary use of the terms "fair," "equitable," and "short supply chain."

The terms ‘fair’ and ‘equitable’ can be used only if stability, transparency, and equitable pricing for farmers are ensured, and one or several of the UN Sustainable Development Goals are pursued. The term ‘short supply chain’ can only be used where there is a direct connection between the farmer and final consumer of the product or there is a close connection and geographical proximity between the farmer and consumer.

Marketing standards 

Marketing standards can now be introduced for “all sectors in which edible parts of animals are produced and in particular the beef and veal, pigmeat, sheepmeat and goatmeat, and poultrymeat sector”. This will allow strengthened origin labelling.

Agreements and concerted practices of recognised interbranch organisations

To simplify things for small farmers and to encourage young people into the industry, the amendments allow producers to request EU Commission opinions on the compatibility of sustainability-related agreements, with additional objectives phased in over time. This could allow an exemption from Article 101(1) of the Treaty on the Functioning of the EU (competition rules).

Amendments to statues of POs

Several amendments have been introduced to allow greater flexibility regarding PO membership and strengthens requirements relating to democratic governance and farmer control. This includes that producers can be members of numerous POs, and that POs must be farmer led and members must be able to democratically scrutinise the organisation's activities, decisions and accounts. 

Agreements and decisions during periods of severe imbalance in markets

When there is a severe imbalance in the market, the amended legislation allows the Commission to allocate support from the agricultural reserve.