OHP Act: fairer price for non-cooperative farmers

The main tool for complaining livestock farmers is the Unfair Commercial Practices Act (UCP), which results from a European directive. On the one hand, this law was not introduced for nothing, because farmers, but also other groups in the economy, sometimes lack the necessary protection. However, the question is whether the law will do what it is intended to do. In France, there has been experience for a long time with a kind of precursor to the UCP, the Loi Egalim. The experiences with this are disappointing, because the law appears to be easy to circumvent.

Cooperatives excepted
When it comes to the Dutch dairy sector, it quickly becomes clear that the OHP Act only looks at private milk processors. Cooperatives are more or less excluded in advance, because these are already partnerships of farmers. The fact that not everyone is always heard within these clubs and that improper pressure can be exerted there and sometimes things do not go well, is the responsibility of the cooperative itself.

Competitive advantage of cooperatives?
The question is whether the OHP Act (and the claims that result from it) does not give cooperatives a competitive advantage in advance. Formally, there may be a risk that private individuals will have to provide more openness about commercial affairs than cooperatives.

Perhaps these kinds of considerations played a role in the hesitation of the ACM and the OHP Disputes Committee to intervene. However, it became clear at the beginning of this week that the ACM wants At Lactalis Leerdammer things are done differently and suppliers are more involved in the pricing. Earlier, the Disputes Committee OHP made a ruling in a case between initially Holland Dairy Producers and Vreugdenhil Dairy Foods. The scope of this was more or less the same, but the consequences are different. Lactalis was given a penalty, Vreugdenhil was sent a binding ruling, but without a fine or something like that. In both cases, the processor must provide more insight into the formation of the milk price and consult more regularly.

Vreugdenhil has barely had time to respond to the ruling. Lactalis Leerdammer says it will take the ACM ruling to heart, but is also appealing the same ruling. So it remains to be seen what the profit of this case is for the suppliers.

Do not determine milk price together
Good consultation with farmers is always sensible and important. A dairy chain in which processors and suppliers see each other as opponents will never be the strongest. Without cooperation and coordination, it will not work, even if this is not ingrained in the corporate culture. Another thing is that dairy companies can hardly be forced to put their entire commercial assets on the table. This is a tension in the OHP law. It is also not to be expected that dairy farmers will have a say in the milk price on a monthly basis. Processors must also retain their commercial freedom.