The National Federation of Dairy Industries (Fenil) has filed a lawsuit before the Supreme Court requesting the annulment of the prohibition of buying at a loss contained in the recent Food Chain Law and its successive extensions.
As reported by Efeagro, Fenil understands that the law fails to comply with the regulations of the Common Organization of Agricultural Markets (OCM) on free negotiation of prices. Specifically, it claims the nullity of the content of royal decree 374/2022, on hiring in the dairy sector, which requires that the farmer not sell milk to the industry below its effective cost of production.
Fenil considers that prohibiting purchases at losses “collides head-on” with said article and restricts “unnecessarily and disproportionately the autonomy and business freedom” of the parts.
The UPA is person in the cause
With this maneuver, Fenil intends to continue buying milk from farmers below cost, a measure that, they say, it benefits even them, despite the fact that all the agrarian organizations have always been in favor of this prohibition. In fact, as soon as they heard the news, UPA has appeared in the case and will testify this Wednesday in the Supreme Court to, as they have exposed this Tuesday, “defend the Law of the Food Chain and oppose arguments” to Fenil.
According to the employer, prohibiting the purchase at a loss harms the “less efficient” farmers who, with this new law, cannot face the occasional excess supply.
According to Fenil, due to its “cyclical nature, producers are not going to be able to lower their prices below costs to guarantee the collection” of milk, so “it is easily understood that the restriction of the standard leads to a result opposite to that intended..
Due to this restriction, the dairy employer assures, the industry “does not have the means to control the veracity or accuracy of the information on the actual costs of production communicated” and “there is no objective concept of ‘effective cost of production’so that each farmer may or may not take into account what they consider appropriate at any given time”.
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