French Features on Production of Agro-food Products

Luc BODIGUEL, Ressearcher-CNRS UMR 3128 Droit et Changement social

Professor-Law school of Nantes luc.bodiguel@univ-nantes.fr

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French Features on Production of Agro-food Products

Scheme: 1. French legal features on Agri-Food Chain Organization 2. French law on Genetically Modified Organisms (GMO’s)

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French legal Features on Agri-Food Chain Organization

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Scheme: 1. Agri-Food Chain Organization and Contracts 2. Integration Contracts 3. Sale Contracts

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Keywords to understand…

Agri-Food Chain Organization

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Interbranch organisations (IO)

Producer Organisations (PO)

French Agricultural Law

2007: Single CMO Regulation

2011: Reg. Milk ; Fruits and vegetables

1960-1964…: IO and Po; interbranch and «integration» contracts

Agri-Food Chain Organization

UE Agricultural Policy

From 1958: CMO: PO for few sectors

2010: Written Contracts for sale contracts: L631-24 c. rur.

2013 New Single CMO Reg. for 2014 based on COM 2011/626:

2012: written contracts for milk sector

2010: Prop. for amending Reg. 1234/2007

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HOW?

Main goal of French policy: ---to balance the agricultural markets ---to give to farmers more bargaining power

1) To avoid farmers dispersion organizing integration/concentration

2) To make partnerships more transparent

Issues: -unbalanced economics powers -prices fluctuation -End of milk quotas

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Agri-Food Chain Organization

• PO may be able to bargain with Processors and Wholesalers …

Agri-Food Chain Organization

Indirectly in IO

Directly between PO and Agro-Firm

Standart sale/production contracts

Individual sale/production Contracts

Must comply with… •Mandatory Provisions/Clauses •Mandatory written contracts

As stated in

•Regulation on Integration Contracts

•Regulation on Sale Contracts 7

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PO

Trade Firm (TF) IO

Sale Contracts

Integration contracts?

Single farmers Associationof farmers

Interbranch Agreements…

•Standard Contracts

•Integration contracts?

Agri-Food Chain Organization

Inter individual process Collective process

Association of TF

Contract between a farmer and a non farmer

For products sale For rental (tenancies) For providing services

Trade Law Tenancy Act Services Supply Law

Maybee… Integration Contract +?

double legal coat! 9

Specific law

Specific law

General law

Differences between sale and Integration contracts?

Agri-Food Chain Organization

French legal Features on Agri-Food Chain Organization

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Scheme: 1. Agri-Food Chain Organization and Contracts 2. Integration Contracts 3. Sale Contracts

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Introduction • HISTORY: After second world war: Mass demand for food; Inadaptation of

farms.

• BUT: no money in France

• RESULT: US Agro-food Companies have paid.

• LEGAL EFFECT: long term Agreement between Agro-food Comp. and farmers.

• IN FACT: abuses from agro Business.

• FRENCH DECISION: Loi n°64-678, 6 July 1964

Feed, chemicals,

animals

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• To qualify IC, contracts should include reciprocal obligations of providing products or services ... Very broad approach! – From 1976, reciprocal obligations downstream or upstream enough

Definition: art. L326-1 c. rur

More precise for breeding sector

(article L 326-3 c. rur) Farmer

Upstream Food

Company

Downstream Food

Company Price + services

Animals or eggs

Price + services

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Integration contracts are deemed to all contracts and agreements concluded between a farmer or a group of farmers and one or more

business companies

Definition: art. L326-1 c. rur

Farmer definition: article L311-1 c. rur.

Exclusion: •Coopératives •Other farmers

May be a group of contracts

A farmer or a farmers association

A business company or more than a business

company:

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Rules if integration contract: legal regime

GENERAL OBLIGATION OF CLEAR INFORMATION IN CHARGE OF THE AGRO-FOOD FIRM (Article L326-5 , L. 326-6 and cases)

– Mandatory written contract; – Obligation of preciseness; – Fixed price or fixed modalities of price; – Fixed delay to pay; – Fixed contract duration, revision and termination; – Explicitly mentioned quality of produces or supplies.

Sanction

• Nullity of the main contract and eventualy the accessories contracts (Article L326-6 );

• Suppose to come back to the situation that existed before the conclusion of contract;

• Main point: supplies provided by farmers are calculated by reference to a salary.

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French legal Features on Agri-Food Chain Organization

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Scheme: 1. Agri-Food Chain Organization and Contracts 2. Integration Contracts 3. Sale Contracts

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Definition

• Agricultural Modernisation law 2010-874 : Article L631-24 c. rur.: – Sale contract between farmer and purchaser – concern agricultural produces to be resale or processing – Law may require written contract with mandatory clauses

• Broad implementation;

• Strong legal impact.

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Mandatory Clauses

• Obligation of preciseness: • Fixed modalities of price; • Modalities to pay • Contract duration, revision and

cancellation • Produces figures • Transport conditions • Purchaser can’t give back

produces...

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Usual clauses for every sale contract

Prior Procedure

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Legal written requirement come from…

If no interbranch agreement, government Regulation

Interbranch agreement

Implementation

• Milk cow sale contracts • Article R631-7 c. rur. created by Décret

n°2010-1753 du 30 décembre 2010

• Fruits and Vegetables sale contracts • Article R631-11 c. rur. created by Décret

n°2011-1108 du 15 septembre 2011

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No Interbranch agreement right now

Sanction

If the purchaser : – Doesn’t propose a written contract to farmers – Doesn’t include mandatory clauses

Penalties: up to 75 000 € per farmer (Article L631-25 c. rur.)

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Quiet persuasive!!

French legal Features on Agri-Food Chain Organization

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To conclude: French legal tools: in accordance with legal goals. 1. But French law must comply with European law

• competition law.

2. Are contracts dissuasive enough?

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French law on Genetically Modified Organisms

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Scheme: 1. GMO legal background 2. GMO Labelling 3. Co-existence 4. Contestation 5. Liability

GMO legal background

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UE GM Policy: •Directive 2001/18/EC •Directive 2009/41/EC •Regulation (EC) No 1829/2003 •Regulation (EC) No 1830/2003

French Law: • art. L. 531-1 and R531-1 c. env.

• Law n° 2008-595 + Décret n°2008-1273.

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GMO legal background: French law

• Code de l’environnement: Articles L531-1 to L537-1 – Titre III Livre V : Organismes génétiquement

modifiés • Chapitre Ier : Dispositions générales • Chapitre II : Utilisation confinée des organismes

génétiquement modifiés • Chapitre III : Dissémination volontaire d'organismes

génétiquement modifiés – Section 1 : Dispositions générales – Section 2 : Dissémination volontaire à toute autre fin

que la mise sur le marché – Section 3 : Mise sur le marché

• Chapitre IV : Surveillance biologique du territoire • Chapitre V : Contrôle et sanctions administratifs • Chapitre VI : Dispositions pénales

– Section 1 : Constatation des infractions – Section 2 : Sanctions

• Chapitre VII : Dispositions diverses

Code rural •Livre VI : Production et marchés •Titre VI : Les productions végétales

•Chapitre III : Les plantes génétiquement modifiées. (Articles L663-1 à L663-5)

Authorization phase of GM event: political decision based on scientific evidences

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Economic aim

•Risk Management

Sanitary and environmental

Risks Assesment

GMO legal background: GM System

For confined used, release for experimentation placing on the market

Technical requirements to ensure food chains coexistence

Risk Information

precautionary approach

If authorization for GM plant to be

cultivated:

For every authorized GM uses

GM Labelling issue

If for food

•Emergency measures/ Safeguard clause •Impact on authorization •Liability

For deliberate relase of GMOs for any other purpose than for placing on the market: • Article L533-3 and L533-3-1 c. env. 1. Prior authorization delivered by government after

opinion of the Haut Conseil des biotechnologies (HCB).

2. New information may impact the prior authorization: modification, suspention, end.

3. Mayors may ask to the governement to organise meeting.

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GMO legal background: French transcription

Copy of UE Law: no specificity

Copy of UE Law: no specificity

For placing on the market of GMOs • Article L533-5, 6 ,8, 9 c. env. 1. Prior authorization delivered by government after

opinion of the Haut Conseil des biotechnologies (HCB). 2. Authorization given by another member state =

authorization in France 3. New information may impact the prior authorization:

modification, suspention, end. Public may be informed 4. The State provides information and public participation

early and effective before making decisions of authorization.

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GMO legal background: French transcription

GMO legal background: Scientific french authorities for GMO valutation

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Article L531-3

•Give opinions or recommendations on

biotechnologies, on GMOs.

•Opinions are public.

Article L1313-1

•General mission of assessment of risks to which man can be exposed through labor,

environment and food.

•Assessment of every new scientific studies or ressearch on GMO

A scientific Committee An ethics and social Committee

BUT for GM food and feed For deliberate relase and placing on the market of GMOs = if cultivation

French law on Genetically Modified Organisms

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Scheme: 1. GMO background 2. GMO Labelling 3. Co-existence 4. Contestation 5. Liability

French GMO Labelling

• 6 groups of labelling rules

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UE GM LABELLING REQUIREMENT: “genetically modified” or “produced from genetically modified (name of the ingredient)” shall appear when foods contain material which contains, consists of or is produced from GMOs in a proportion higher than 0,9 per cent.

With GM

Without GM

FRENCH NON GM LABELLING OPTION: no higher than 0,9 per cent… •Article L. 531-2-1 c. env. (law 2008)

•décret n° 2012-128 du 30 janvier 2012 on foodstuffs labeling from sectors deemed "without genetically modified organisms» (in force since 1/07/2012)

French GMO Labelling

Ingredients of plant origin – Label: "GMO free”

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EU authorization for GM maize X

A non-GM maize or 0.1% adventitious

presence

"GMO-free" label for the ingredients

involved

French GMO Labelling

Ingredients derived from livestock • Label: "fed without GMOs (0.1%)“

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EU authorization for GM maize X

A bovine non-GM or 0.1% adventitious

presence

"fed without GMOs (0.1%)“ label for the ingredients involved

French GMO Labelling

Ingredients derived from livestock • Label: “from animals fed without GMOs (0.1%)”

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EU authorization for GM maize X

Label: “from animals fed

without GMOs (0.1%)” for the

ingredients involved

Milk, Eggs

French GMO Labelling

Ingredients derived from livestock – Label: "fed without

GMOs (0.9%)“

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Ingredients derived from livestock • Label: «from animals

fed without GMOs (0.9%)”

From animals fed exclusively with food that is not subject to the labeling requirements

of Reg 22 September 2003

French GMO Labelling

Ingredients from apiculture/ beekeeping • Label: “without GMO within 3 km“.

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If ingredients that are not subject to the labeling requirements

of Reg 22 September 2003

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French GMO Labelling

Ingredients derived from plants whose species has

been GM authorized for placing on the market of the

EU

Ingredients not derived from plants whose

species has been GM authorized for

placing on the market of the EU

Ingredients not subject to the labeling requirements of the

Regulation of 22 September 2003

•Plants 0,1% •Animals 0,1%

•Animals 0,9% •Apiculture/Beekeeping

1. Ingredients of plant origin "GMO-free”

2. Ingredients derived from livestock "fed without GMO (0.1%)”

3. Ingredients derived from livestock "Derived from animals fed without GMO (0.1%)"

No Label 4. Ingredients derived from livestock "fed without GMO (0.9%) »

5. Ingredients derived from livestock "from animals fed without GMO (0.9%) »

6. Ingredients from apiculture "GMO-free within 3 km"

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French GMO Labelling

French Law provide also (except some cases): Conditions and minimum periods of feed; Prohibition of communicating on the organoleptic and nutritional figures or environmental or health qualities; Prohibition of use of certain substances in the manufacturing process; Conditions of labeling on packaging or product; Conditions of production animals "GMO-free“; Are allowed import and trade in France of products lawfully manufactured or marketed in another Member State of the EU or Turkey or any other State party to the Agreement on the European Economic Area, with an "GMO-free" or similar label, without submission to the requirements of this regulation.

French law on Genetically Modified Organisms

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Scheme: 1. GMO background 2. GMO Labelling 3. Co-existence 4. Contestation 5. Liability

Co-existence: UE background

Commission Recommendation

13 July 2010 on national

co-existence measures

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Article 26a of Directive 2001/18/EC: appropriate measures to avoid the unintended presence of GMOs) in other products.

local conditions.

non-binding recommendations

no technical measures.

National competence

Member States may define measures that aim at reaching levels of presence of GMOs in other crops

lower than 0,9 %.

= in accordance with:

1. environmental and public health, agricultural structures, local ecosystems, “GMO-free” production

and trade chains 2. integrity of the environment, specificity of traditional

and quality cultivation 3. principles of precaution, prevention, information,

participation and liability and transparency 41

Co-existence rules corresponds to a general principles:

Challenge: reconciling

such various considerations?

Co-existence: French law

Legal impact?

Freedom to consume and produce with or without GMO

Art L. 531-2-1 c. env.

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Co-existence rules corresponds to technical measures

Technical requirements ... •Distances between cultivation fields or isolation of cultivation; •Obligation to separate; •Measures to be developed all along the production chain

Under control: •Risk of total or partial destruction of crops; •Risk of fine.

2. Les Mesures de coexistence en France Co-existence: French Law

Article L663-2 et 3 c. rur

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Co-existence rules corresponds also to mandatory information:

•Inform farmers •Inform the administrative authority.

2. Les Mesures de coexistence en France Co-existence: French Law

Potential conflicts!

Risk of destruction!

Article L663-1 c. Rur.

French law on Genetically Modified Organisms

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Scheme: 1. GMO background 2. GMO Labelling 3. Co-existence 4. Contestation 5. Liability

Rejection of township Regulation when establishing GM-free areas

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Conclusion: if there is a GM authorization: no urgency to act ; no prevention; almost impossible to go on trial against the development of authorized GM crops before the occurrence of any damage

Lawful Contestation

Rejection of the lawsuits of organic producers against GM crops

Unlawful Contestation

Background: destruction of GM plants on private

and public plots by "non-GM“ activists.

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Trials Court Answer : strict implementation

of the criminal law.

Unlawful Contestation

Analysis of Court of Appeal of Orléans of 26 février 2008: 1. Rejection of the criminal irresponsibility of the

activists;

2. Prior authorization is scientific evidence;

3. The general principles are ineffective criminal.

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French law on Genetically Modified Organisms

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Scheme: 1. GMO background 2. GMO Labelling 3. Co-existence 4. Contestation 5. Liability

Liability

Recommendation of 13 July 2010 :

Matters concerning financial compensation or liability for economic damage are the exclusive

competence of Member States

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France: Article L. 663-4 c. rur.

Objective civil liability

Liability: Art.L. 663-4 c. rur.

Any farmer that have GM crops authorized for placing on the market • is directly responsible • for economic loss

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BUT several conditions have to be met:

Meaning of « to be near »?

Limitated consideration?

Otherwise, no dammage

Legal impact of contamination

• What may be compensate? • How can it be compensate • How farmer can pay: insurance? • What’s about the other operators?

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Liability: Art.L. 663-4 and -5 c. rur.

But, no Compagny

for this type of

insurance!! Thus a special

liability only for

farmers: why?

Limited

compensation:

other torts require

to use Standart

Civil and criminal

Liability law

French law on Genetically Modified Organisms

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Conclusion: In accordance with EU law: authorizations… But French specificities concern:

•Free GM label; •Freedom to consume and produce; •Coexistence rules; •Reject of prevention trial; •Strict implementation of criminal law; •Objective liability for GM farmers

French law on Genetically Modified Organisms

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Thanks for your attention…

Luc BODIGUEL, Ressearcher-CNRS UMR 3128 Droit et Changement social

Professor-Law school of Nantes luc.bodiguel@univ-nantes.fr