Following last year's farmer protests across Europe, the European Commission proposed measures to improve things for agricultural producers. EU member states are currently forming their positions on these issues, and Estonia's Ministry of Regional Affairs and Agriculture has sought feedback from the country's relevant associations.

"The issue we're addressing is the fact that the food supply chain consists of different parties: primary producers, the processing industry and retail chains, and prices are determined between them," explained Madis Pärtel, the ministry's deputy secretary general for bioeconomy.

"It often happens in price negotiations that those at the lower end of the chain — the primary producers — end up in a weaker position compared with the other participants in the chain," he continued. "The Commission and the Estonian government have been trying to find a solution to this problem."

However, feedback from the Estonian Traders' Association (EKL) and the Estonian Chamber of Commerce and Industry (EKTK) indicates there is confusion about what issue they are actually attempting to solve.

"We believe that, barring an extremely compelling reason, the EU should intervene as little as possible in business-to-business relations," said Ireen Tarto, a legal adviser at the EKTK. "The current initiative suggests that the position of agricultural producers needs to be improved immediately, and that measures must be implemented without delay. However, it isn't entirely clear to us what exactly constitutes such a critical issue right now."

For instance, one requirement included in the initiative mandates that producers must start drafting written contracts, raising the question of whether verbal agreements are currently such a major issue that it requires urgent intervention. Tarto had even more examples to cite.

"If the goal is to improve agricultural producers' position, but one provision in the initiative allows member states to set a minimum validity period for contracts between parties — this could instead lead to a situation where [the producers'] position may not improve at all, as retail chains could decide they don't want to purchase products from a smaller agricultural producer," she pointed out.

Chamber legal adviser: EU shouldn't be doing this

According to the chamber's legal adviser, it appears the impacts of this initiative have not been fully analyzed.

She noted that it's actually unknown whether this initiative will even have any impact at all, or whether it will have a positive impact at all.

"Or how it will affect all the other businesses involved in this initiative — not just agricultural producers," Tarto added. "This is a pretty big concern here right now. Currently, it's interfering in business-to-business relations for no compelling reason, and that is useless. The EU should not be doing this."

At the ministry, the deputy secretary general emphasized that talks are still ongoing in Brussels, where the Commission is providing further explanations about its initiative, adding that the Ministry of Regional Affairs and Agriculture likewise has questions that have yet to be answered.

"For example, the Commission is proposing the introduction of certain mediation mechanisms," Pärtel noted.

"What I mean by this is that if, for example, a primary producer and a retail chain were to have any disputes, then there should be some kind of mediation mechanism in place before they take the matter to court," he explained. "However, we don't fully understand who this would be and what their functions would be in mediating these disputes. These are some of the details we lack clarity on, and we have yet to take a position on whether this would ultimately be good or bad."

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