The implementation of the draft law on the capping of markups for a wide range of agri-food products and agricultural inputs will generate a far too harsh intervention in the commercial policies of economic agents and a major interference in the business models of each actor, consider the representatives of the Romanian Crop Protection Association (AIPROM).

„The Romanian Crop Protection Association (AIPROM) expresses its concern about the draft Emergency Ordinance proposed by the Ministry of Agriculture and Rural Development, according to some media sources, regarding the capping of markups for a wide range of agri-food products and agricultural inputs, including plant protection products. We believe that the implementation of this normative act generates a far too harsh intervention in the commercial policies of economic agents and a major interference in the business models of each actor, resulting in the impairment of economic mechanisms of price formation and the ability of producers and distributors of plant protection products to respond effectively to demand. The negative consequences of such an approach are currently unquantifiable, but their degree of probability is all the greater as they will have repercussions on the entire chain of production and distribution,” reads a press release issued by the organization sent to AGERPRES on Tuesday.

AIPROM draws attention to the fact that the promotion of a legislation establishing price control measures in such a broad field, agricultural and food products, fertilizers, feed and pesticides, will affect the reputation of Romanian agriculture in the European Union and will reduce the level of investment so necessary for the transition from an agriculture based on the export of raw materials to an economy based on the production and export of products with high added value.

The representatives of the Romanian Crop Protection Association further draw attention to the fact that the temporary cap on markups may jeopardize the economic stability of market operators, especially distributors, and may have an impact on food safety in Romania.

The Minister of Agriculture, Florin Barbu, has recently announced that all products processed in Romania will benefit from a cap on markups, with a draft ordinance in this regard to be launched for debate in the coming period, and then approved by the Government.

The measure has provoked contradictory reactions, being contested by the Romalimenta Federation, the Association of Large Commercial Networks in Romania (AMRCR), the Concordia Employers’ Confederation and the Romanian-German Chamber of Commerce and Industry, and supported by the Association of Operators in Organic Farming – BIO Romania.

In this context, last week, the head of Agriculture said that a new discussion with representatives of the food industry on the capping of the markup will take place this week. He said that he wants to have „a fair dialogue” with both processors and retailers in Romania, and pointed out that this decision will not affect the businesses of processors and retailers in Romania.

AIPROM, was established in 2002 and represents over 85% of the Romanian plant protection products market. AIPROM is also a member of CropLife Europe.

AGERPRES