The four agricultural organisations within Belpotato.be have written to the FPS Economy (the Belgian ACM) about irregularities with potato contracts. Several buyers have unilaterally reduced the contracted volumes, which is causing great concern among farmers. The FPS Economy confirms receipt of the letter and emphasises that unilateral changes to contracts are prohibited. An investigation has now been launched to analyse possible infringements.
The unrest in the potato sector continues. Boerenbond, ABS, FWA and Fiwap have asked the FPS Economy in a letter for mediation and investigation. "Many of our members report that buyers do not adhere to contractual agreements", the organisations state. They give specific examples of situations in which contracts were unilaterally amended.
A common practice is that buyers call to say that the market has changed and that they have to reduce the contract quantities by 20 percent. Regardless of the farmer's reaction, a few days later an e-mail follows with an amended contract, in which the farmer's signature has already been added without his consent. "This is in violation of the legislation on unfair commercial practices."
In other cases, customers send an email announcing a 15 percent reduction, without providing an amended contract. However, the wording implies a tacit agreement, since only an opportunity is offered to ask questions, without specifying a deadline for responding. "This is also an unauthorized unilateral contract amendment."
In addition, farmers are sometimes pressured to sign a contract within seven days. Then, more than a month later, they receive a message that the contract quantity is still being reduced by 10 percent, while the buyer himself had not yet signed the contract. "Waiting a month for confirmation is unreasonable, especially when the farmer only gets seven days to consider it."
Bad timing and impact on the sector
The timing of these practices exacerbates the situation. Farmers have already drawn up their cultivation plans and concluded seasonal leases. Investments in seed potatoes, fertilizers and crop protection products have also already been made. This makes switching to other crops almost impossible. In addition, seed potato growers and traders report that buyers are purchasing less seed potatoes than contractually agreed.
With the planting season approaching, this uncertainty is causing major problems. The agricultural organisations are asking the FPS Economy for action and consultation, both with them and within Belpotato.be. Within this trade organisation, the 'contracts' working group, led by the FPS Economy, worked on refining and updating the code of conduct for contracts in the potato sector. Now that it appears that buyers are ignoring these rules, the organisations are calling for a mediating role within the sector.
FPS Economy: unilateral changes are prohibited
The FPS Economy confirms receipt of the letter and reports that the Economic Inspectorate had already opened an investigation following media reports. "Unilaterally changing agreements falls under the blacklist of unfair commercial practices in the agricultural and food supply chain and is prohibited." The ongoing investigation must determine whether such infringements have actually taken place. Due to the secrecy of the investigation, the service cannot say more about this at the moment.
Christophe Vermeulen, CEO of Belgapom, supports the call to reconvene the 'contracts' working group within Belpotato.be under the leadership of the FPS Economy. He emphasises that the sector federation is prepared to fully cooperate with the investigation.