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How to reliably implement the German Supply Chain Due Diligence Act

How to reliably implement the German Supply Chain Due Diligence Act

BVA e.V. and VdG e.V. inform agricultural traders in their seminar series “Good to know in agricultural trade”

Berlin/Hamburg, January 27, 2022. What are the risks in my supply chain? How do I set up a complaints management system? And how can I generally make my company legally compliant in terms of due diligence? These and other questions were the content of a three-hour online seminar on January 25 on the new supply chain due diligence law held by the Bundesverband Agrarhandel (BVA) e.V. and the Verein der Getreidehändler der Hamburger Börse (VdG) e.V.. As part of their online seminar series “Good to know in agricultural trade”, the two industry associations gave companies the opportunity to receive concrete action recommendations by experts and gain clarity.

“For many companies, there is often still uncertainty about the extent to which they are affected by the new law and what adjustments are necessary in their business,” explains BVA Managing Director Martin Courbier, who moderated the seminar. “With this seminar, we were able to provide concrete, practical support and help clarify pressing questions.” The associations had invited speakers who showed how implementation succeeds from a company perspective, as well as two experts from the “Helpdesk on Business & Human Rights“. As a free support service of the German government, the helpdesk advises companies of all sizes on the implementation of human rights due diligence processes. The speakers explained the requirements of the law and presented useful online tools: The CSR Risk Check helps assess the local human rights situation as well as environmental, social and governance issues in individual countries and for different commodities. The SME Compass supports the implementation of due diligence processes in companies. “The first step is to identify the risks in your own business area and in the supply chain and to counter them with appropriate preventive and remedial measures,” says Sabine Peters-Halfbrodt, a consultant at the Helpdesk on Business & Human Rights. “A change in perspective also helps to gain a comprehensive view of the situation: What impact do the company’s operations have on the people who may be affected by the company’s activities?” As a conclusion of the seminar, it became clear that although the implementation of the requirements is very individual, companies can receive a lot of help that will facilitate the process.

“For many companies, there is often still uncertainty about the extent to which they are affected by the new law and what adjustments are necessary in their business.”

Under the name “Good to know in agricultural trade”, BVA e.V. and VdG e.V. have been offering practical online seminars for members and non-members since the beginning of 2021. Upcoming topics include financial topics, such as credit protection and customer creditworthiness, or carbon farming. The associations provide information on the seminars on their websites.

Bundesverband Agrarhandel e. V.

The Bundesverband Agrarhandel e.V. (BVA) (Federal Association of Agricultural Trade) represents the interests of the agricultural trade in Germany. The BVA member companies qualitatively process the agricultural raw materials supplied by agriculture, such as grain and oilseeds, by drying and cleaning them and market these products as food and animal feed in Germany and abroad. They also sell seed, crop protection agents and fertilizers as well as animal feed to the agricultural sector. Agricultural trade thus plays a crucial role in the agricultural value chain.

Über den VdG e.V.:

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:

Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0)40-369879-12
E-Mail:

Picture: Miltiadis Fragkidis / Unsplash

Prices for agricultural commodities are rising – what’s behind?

Prices for agricultural commodities are rising – what’s behind?

World market prices for agricultural commodities are at their highest level in over 10 years (1). As of November 2021, the price index for agricultural commodities had increased by 27.3 percent since the same month last year. Cereals in particular have increased significantly – by 3.1 percent compared to October 2021. We already notice this when grocery shopping at the supermarket. Food prices recently rose by 4.8 percent – exceeding the general inflation rate of 4.5 percent.

But what is the cause of this seemingly unstoppable price trend that industry experts have been observing since last year?

Demand exceeds supply

The simple apparent reason is that globally, demand has exceeded supply over an extended period of time, since around 2017/2018. This has reduced stocks around the world that had previously served as a buffer, compensating fluctuations in supply and demand. This discrepancy is initially attributable to a combination of economic growth and lower production in individual regions: Weather-related poorer harvests, particularly in Brazil, Canada, Russia and the USA, led to lower availability of cereals and oilseeds on the markets. At the same time, the economies in the USA and China grew and with them the demand for raw materials. Demand also piled up globally during the first phase of the Corona pandemic, which unloaded through 2021. But other factors are paying into the current trend.

Biofuel quotas drive demand for vegetable oils

For example, the U.S. election in 2020 led to a shift in the country’s environmental policy: More biofuels were to be blended with fossil fuels. These biodiesel mandates briefly increased demand for vegetable oil significantly. Palm, soy, corn and canola, in particular, are used to produce biofuels. In the meantime, the government around Joe Biden has reduced the blending volume again, which could contribute to an easing of the market. This has also been helped by the fall in crude oil prices in the meantime. However, if crude oil prices continue to rise, as they have since the middle of the year, biofuels will become more interesting again and their availability could decline again.

Gas and input prices fuel production costs

Gas has also become steadily more expensive over the past few months, driving up the cost of producing agricultural commodities. However, it is not just agricultural and food production itself that has been affected by the rise in energy prices, but also the production of inputs. Fertilizer production in particular requires a lot of gas as a raw material and energy supplier: In the production of ammonia and nitrogen fertilizers, gas accounts for up to 80 percent of production costs. Current production shortfalls could even impact the 2022 harvest. In addition, major fertilizer exporters, such as Russia and China, have now begun regulating nitrogen fertilizer exports through quotas. This further curbs availability.

In the short term, only higher global production would help against the demand overhang. However, this will be affected by unpredictable factors, such as weather, and limited by external variables, such as energy and input availability. As a result, consumers will still face rising food prices in the coming months.

Photo: Robert Wiedemann / Unsplash

1: FAO = Food and Agriculture Organization of the United Nations

BVA e.V. and VdG e.V. hope for constructive dialog with Green-led ministries BMEL and BMU

BVA e.V. and VdG e.V. hope for constructive dialog with Green-led ministries BMEL and BMU

Berlin / Hamburg, 9 December 2021. Yesterday, the new federal government was put into office. The Bundesverband Agrarhandel (BVA) e. V. (Federal Association of Agricultural Trade) and the Verein der Getreidehändler der Hamburger Börse (VdG) e.V. (Grain Traders Association of the Hamburg Stock Exchange) congratulate the new Chancellor Olaf Scholz and his ministers from the SPD, the Greens and the FDP. The agricultural traders had paid particular attention to the appointment of the Federal Ministers for Food and Agriculture (BMEL) and for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMU) in the recent weeks. Both were now given to the Greens: Cem Özdemir will head the BMEL in the future, Steffi Lemke the BMU.

“The fact that both ministries are now headed by people from the same parliamentary group gives reason to expect that they will work together more effectively in the future,” predicts Martin Courbier, Managing Director at BVA e.V.. “From Cem Özdemir, we hope that he will remain true to his objective line even on controversial agricultural issues. I perceive him as a politician with integrity and trustworthiness who is not afraid to address things openly and honestly. That will be good for the debate on the future direction of agriculture and farming. And Steffi Lemke, as an agricultural scientist, also brings expertise for BMEL topics, which is a good prerequisite for constructive talks between the ministries.”

“The fact that both ministries are now headed by people from the same parliamentary group gives reason to expect that they will work together more effectively in the future,”

Managing Director at BVA e.V.

Christof Buchholz, Managing Director at VdG e.V., hopes that the newly led ministries will proceed in a future-oriented manner, recognize the importance of international agricultural trade for global food supply and strengthen innovations: “High-yield regions must be optimally utilized. Food must then be distributed internationally to balance supply and demand. In this way, fewer resources are consumed than it would be the case with production aimed at pure self-sufficiency. Free international agricultural trade is essential for this. Innovations, such as new genomic techniques, must also be strengthened. Innovations help ensure that Germany remains competitive in agricultural production, improves its sustainability even further and maintains its position on the world market.”

Bundesverband Agrarhandel e. V.
The Bundesverband Agrarhandel e.V. (BVA) (Federal Association of Agricultural Trade) represents the interests of the agricultural trade in Germany. The BVA member companies qualitatively process the agricultural raw materials supplied by agriculture, such as grain and oilseeds, by drying and cleaning them and market these products as food and animal feed in Germany and abroad. They also sell seed, crop protection agents and fertilizers as well as animal feed to the agricultural sector. Agricultural trade thus plays a crucial role in the agricultural value chain.

Verein der Getreidehändler der Hamburger Börse e.V.

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:
Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0) 40-369879-12
E-Mail:

Picture: Deutscher Bundestag / Tobias Koch

Dramatically rising energy prices – future German government must create prospects

Dramatically rising energy prices – future German government must create prospects

Berlin/Hamburg, 05.11.2021 – The dramatic rise in energy prices will inevitably lead to higher food prices if future coalition leaders do not set the right course. Therefore, the Bundesverband Agrarhandel e. V. ( Federal Association of Agricultural Trade) and the Verein der Getreidehändler der Hamburger Börse e. V. ( Grain Traders Association of the Hamburg Stock Exchange) addressed the negotiators of the traffic light coalition yesterday together with eight other associations of the agricultural industry. The associations called on the politicians to give high priority to the affordability of energy supply in the current coalition negotiations.

The production of fertilizers, for example, is very energy-intensive. Increased energy prices are realized throughout the food value chain and their impact on consumer prices is exacerbated by exorbitant increases in fertilizer prices. Some industrial companies have already announced that they will cut back on fertilizer production because it is currently no longer economically feasible. If crops cannot be supplied with the necessary amount of nutrients due to insufficient availability, there is a risk of harvest losses.

The problem of rising energy prices is not only an acute one, but a structural one: the associations pointed out that the competitiveness of the German agricultural industry is also threatened by some national and European legislative procedures in the field of energy policy. For example, in the Fuel Emissions Trading Act-Carbon Leakage Regulation, numerous industries are missing from the list of beneficiary sectors. From the point of view of the associations, this list requires a fundamental review and expansion. In the agri-food sector, there is a real danger of migration abroad, especially of organic farms that trade over longer distances anyway. The sectors eligible for aid and the aid levels are also to be massively reduced as part of the amendment to the guidelines for state aid for climate, environmental protection and energy. Many companies, which will thus be excluded from the special compensation scheme under the EEG, will thereby be placed in a worse position in international competition.

In addition, the new version of the EU Energy Taxation Directive provides for higher minimum taxation for fossil fuels. As a result, further increases in costs are to be expected, especially as gas will remain indispensable as a bridging technology for some time to come.

To ensure that companies in the agricultural sector can continue to make their contribution to climate protection, they need operationally sensible margins and planning security. The future German government is called upon to ensure this and thus make its contribution to ensuring the production of high-quality food in Germany in the future as well.

Bundesverband Agrarhandel e. V.
The Bundesverband Agrarhandel e.V. (BVA) (Federal Association of Agricultural Trade) represents the interests of the agricultural trade in Germany. The BVA member companies qualitatively process the agricultural raw materials supplied by agriculture, such as grain and oilseeds, by drying and cleaning them and market these products as food and animal feed in Germany and abroad. They also sell seed, crop protection agents and fertilizers as well as animal feed to the agricultural sector. Agricultural trade thus plays a crucial role in the agricultural value chain.

Verein der Getreidehändler der Hamburger Börse e.V.
The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Further information:
Bundesverband Agrarhandel e. V.
Martin Courbier
Secretary General
Invalidenstraße 34,10115 Berlin, Germany
Tel.: +49 30 2790 741-0
E-Mail: zentrale@bv-agrar.de

www.bv-agrar.de

Verein der Getreidehändler der Hamburger Börse e. V.
Christof Buchholz
Secretary General
Adolphsplatz 1, 20457 Hamburg, Germany
Tel: +49 40 36 9879-0
E-Mail:  www.vdg-ev.de

Picture: Matthew Henry / Unsplash

VdG e.V. formulates positions for the Federal Election 2021

VdG e.V. formulates positions for the Federal Election 2021

Hamburg, 2 September 2021. The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) formulates four recommendations to the future German government on the occasion of the federal elections in 2021: International agricultural trade should be strengthened and high-yield regions should be leveraged. Innovations in agricultural production and trade should be enabled and promoted. New breeding techniques (NBT) would have to be clearly legally defined at EU level in order to create legal certainty for companies. The European supply chain law should be based on the standards of the supply chain due diligence law of the Federal Republic of Germany. The new German government should also advocate these goals at EU level.

1. The new German government should strengthen high-yield regions and international agricultural trade in order to secure Germany’s supply of diverse agricultural products and contribute to the global food supply.
For some months now, prices for cereals and oilseeds have been at a historically high level. To prevent this from becoming permanent and ultimately having an impact on consumer prices, sufficient production is needed. Agricultural products should therefore be produced primarily where resources are available in sufficient quantities and can be used efficiently. In many regions of Germany, the conditions for high and sustainable production are in place. The climate and soil favor the cultivation of many agricultural products, such as wheat, barley, rye or rapeseed, and technical expertise, skilled workers and infrastructure also contribute to good yields. Other products can be optimally produced in other regions of the world. International trade then creates a global balance between supply and demand. Both – high-yield regions and agricultural trade – must be leveraged and strengthened in a sustainable manner.

2. The new federal government should facilitate and promote innovations that make agriculture and multilateral trade even more efficient and thus help to ensure that sustainably produced, high-quality and affordable food is globally available to the world’s population.

In order for agriculture and the food value chain to meet increasing sustainability demands in the future, they need new technologies, digital systems, low-risk crop protection products or even New Breeding Technologies (NBT). The potential of such innovations must be harnessed by recognizing existing systems and creating appropriate legal regulations.

3. The new German government should advocate the clear legal definition of new breeding technologies (NBT) at EU level in order to create legal certainty for companies and to continue to allow imports from countries that already use NBT.
Not only do New Breeding Techniques, such as Genome Editing, offer potential in application that currently remains untapped, but outdated EU law also affects trade. For example, in the U.S., one of the world’s most important grain exporting countries, genome-edited plants without foreign genetic material are not subject to GMO regulation and are consequently not labeled. To date, it has also not been possible to identify in a generally valid way whether raw materials originate from genome-edited or conventionally bred plants. This poses major challenges for companies that trade or process raw materials internationally, which in turn are associated with a high degree of legal uncertainty. EU law must be modernized in such a way that importers gain legal certainty and Germany and the EU are fully connected to the world market.

4. The new German government should play a role in the drafting of a supply chain law at EU level and work to ensure that its standards are based on the German Supply Chain Due Diligence Act.
With its Supply Chain Due Diligence Act, the Federal Republic is a pioneer for legal regulations to strengthen human rights and environmental due diligence obligations in business activities. The aim is to create a level playing field and standards for all EU countries in order to ensure compliance with human rights and environmental standards in supply chains, an acceptable burden on companies and fair competition.

Verein der Getreidehändler der Hamburger Börse e.V.

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:
Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0) 40-369879-12
E-Mail:

Picture: Claudio Schwarz / Unsplash

Trade in Change – The Hamburg Grain Exchange from its Birth to Today

Trade in Change – The Hamburg Grain Exchange from its Birth to Today

It was 1558: Hamburg merchants obtained the right from the “Honorable Council of the City of Hamburg” to establish a place for themselves at the bridge Trostbrücke in Hamburg’s former harbor area. At that time, it connected the bishop’s old town around the Cathedral and St. Peter’s Church with the count’s new town. Here they met on a daily basis to compare qualities and to trade. This was the hour of birth of the Hamburg Stock Exchange, one of the oldest German stock exchanges. Even then, the Hamburg Stock Exchange was characterized by two ideas: an international orientation combined with a strong sense of community.

Tradition, coupled with a constant willingness to innovate and adapt to the changing market, is still the guiding principle of Hanseatic traders today. And many exchanges have survived from that time to this day: the Hanseatic Securities Exchange, the Coffee Exchange, the exchanges of the insurance industry and house brokers, and so also the Hamburg Grain Exchange. The grain exchange is the last active “commodity exchange” in existence.

The stock exchange serves the trading business

But what is actually the task of a commodity exchange? Originally, it was to promote the economic interests of the members of the exchange. The Hamburg Grain Exchange, for example, provided a forum where traders and brokers initiated and brokered transactions in grain, oilseeds, animal feed, pulses or seeds.

Today, the Hamburg Grain Exchange still serves the agricultural trading business. Among other things, it issues the Hamburg feed contract bill and other form contracts. These are intended to help settle contracts fairly and prevent disputes. They are publicly available and can be downloaded here. Every Tuesday, the grain exchange’s quotation commission also establishes the spot market prices franco Hamburg for several types of grain, feed and pulses and publishes them as price guidance for the industry. The Grain Traders’ Association of the Hamburg Stock Exchange is the responsible body of the Hamburg Grain Exchange. It also manages its business.

The exchange remains alive even in times of digitalization

In the past, grain traders met every day with their samples. Today, market participants come together three times a year for interregional exchanges at the Hamburg Chamber of Commerce: Every January, April and August, up to 700 participants crowd into the exchange hall. They peruse the offerings of exhibiting companies, share market information and discuss it, close deals and network. Today, daily trading is largely done via the Internet, e-mail and telephone – life on the exchanges has changed, but the face-to-face meeting has not lost its value. It still paves the way for smooth business transactions today. We are happy to contribute to this and to keep exchange life in Hamburg alive with all exchange visitors.

The Supply Chain Due Diligence Act – From a voluntary commitment to a cross-border standard

The Supply Chain Due Diligence Act – From a voluntary commitment to a cross-border standard

International trade helps to reduce poverty. This has been observed where countries have expanded their imports and exports in recent years and thus connected to the world market. But the increasingly ramified, global supply chains bring challenges – and responsibility for all players. Are living and working conditions fair? Are wages appropriate? Who monitors compliance with human rights and environmental standards? The German Supply Chain Due Diligence Act is intended to ensure a transparent and sustainable supply chain in the future.

In 2016, the German government issued the National Action Plan for Human Rights and Business. Many companies had responded to this with individual voluntary commitments. In 2020, the German Federal Ministry of Labor and Social Affairs and the Federal Ministry for Economic Cooperation and Development asked more than 2,000 German companies what measures they had already implemented on a voluntary basis. The results were disappointing – for example, compliance with human rights could often still not be guaranteed, especially among suppliers. As a consequence, the German government announced the Supply Chain Due Diligence Act, which has now been passed by the Bundestag and Bundesrat in June. It is to be published in October and is expected to come into force at the beginning of 2023. Initially, it will only apply to companies that employ at least 3,000 people in Germany. One year later, this threshold is to drop to 1,000 employees.

Many companies are already voluntarily committed to fairness and transparency in their supply chain – with voluntary commitments or certifications. However, they have tended to be at a disadvantage compared with companies that invest less in this area. The law now aims to change this and create equal standards for all in Germany.

The German Federal Republic is thus one of the pioneers among the EU countries, alongside France and the Netherlands, among others. As a logical consequence, however, a law at European level is also essential to create a level playing field beyond national borders. The EU Parliament has already taken the first steps in this direction: A proposal for a so-called EU due diligence law is to be launched before the end of this year.

Foto: Julian Mora / Unsplash

Annual General Meeting, the Association of Grain Traders of the Hamburg Stock Exchange

Annual General Meeting, the Association of Grain Traders of the Hamburg Stock Exchange

Rising prices and positive signals from Brussels – At its Annual General Meeting, the Association of Grain Traders of the Hamburg Stock Exchange reports on the industry and the work of the association.

Hamburg, 8 June 2021. At the Annual General Meeting of the Association of Grain Traders of the Hamburg Stock Exchange e.V.. (VdG e.V.), the industry of wholesale and international trade in grain, oilseeds, feed and pulses came together today. The companies met in a hybrid event partly online and partly in the Hamburg Chamber of Commerce, which is also the headquarters of the federal association.

“In recent years, more cereals and oilseeds have been consumed worldwide than produced. The current resurgent demand can therefore not be met from stocks – prices are going through the roof.”

Association chairman Thorsten Tiedemann shed light on the current tight market, in which food and feed prices are repeatedly hitting new records: “In recent years, more cereals and oilseeds have been consumed worldwide than produced. The current resurgent demand can therefore not be met from stocks – prices are going through the roof.” The rainy spring in Europe has at least supported plant growth in the fields. Good yields could dampen the price trend somewhat.

Chairmen Jaana Kleinschmit von Lengefeld and Andreas Schiwek reported from the Food and Feed Safety and Market and Agricultural Policy sections. Kleinschmit sees the results of the European Commission’s study on New Breeding Techniques, published on April 29, as a positive signal: “The EU must adapt its legislation on New Breeding Techniques to the state of the art in science. Otherwise, Europe will lose touch with the world market. Moreover, if we want to achieve the goals of the Green Deal, innovative methods must be available to us.” Andreas Schiwek outlined the association’s position on the planned German supply chain law, saying, “We are advocating that responsibility should not rest solely on companies. Politicians must develop solutions that are acceptable to all. It is also important to involve consumers and make them aware of the implications of their purchasing decisions.”

VdG Ordentliche Mitgliederversammlung

VdG Managing Director Christof Buchholz reported from the office that the arbitration court of VdG e.V. is meeting regularly and meanwhile again without restrictions. It is the oldest in the industry and, with around 25-50 cases handled annually, also the most frequently called upon. The numerous specialist seminars and committee meetings that the association offers its members have taken place entirely digitally in recent months, he said. “Together with the Federal Association of Agricultural Trade (Bundesverband Agrarhandel e.V.), we also launched the public online seminar series ‘Gut zu wissen im Agrarhandel’ in January,” Buchholz said.

Verein der Getreidehändler der Hamburger Börse e.V.

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:
Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0) 40-369879-12
E-Mail:

BVA and VdG welcome UTP directive as framework regulation for fair cooperation in agricultural trade

BVA and VdG welcome UTP directive as framework regulation for fair cooperation in agricultural trade

Berlin/Hamburg, 17 März 2021. The Federal Association of Agricultural Trade e.V. (BVA e.V.) and the Grain Traders Association of the Hamburg Stock Exchange e.V. (VdG e.V.) see the UTP Directive as an urgently needed legal framework to curb unfair trading practices in the agricultural and food supply chain. The aim must be to create a level playing field between trading partners and to eliminate any market imbalances in favor of more competition.

“Fair dealings with contractual partners must finally be embodied in law,” emphasizes Christof Buchholz, Managing Director at VdG e.V.. “Legislators cannot rely solely on voluntary commitments by companies, but must create a suitable framework.” The minimum protection standards established in this way could be further expanded by the individual companies in each case. At the same time, he said, trading partners should still be given a certain amount of flexibility in shaping their contracts within the legal framework. “Bilateral contracting, as the smallest unit in the trade chain, thrives on agreements that are individually tailored to the two parties. This makes them efficient,” Buchholz said.

However, the two federal associations complain that the draft law inadequately addresses unequal market conditions. “It is unclear why the regulations only protect companies with annual sales of up to 350 million euros,” raises BVA managing director Martin Courbier. “Fair trading conditions cannot be a question of company size. Moreover, the proposed sales scale complicates the regulation and leaves loopholes open.”

In practical implementation, according to BVA e.V. and VdG e.V., it is important that the burden of proof for unfair conduct does not lie solely with the weaker contracting party. Even in cases of justified suspicion, the buyer should have to prove that he has acted properly. The anonymity of the complainant must also be guaranteed throughout the entire process. In these points, the draft must be improved, demand BVA e.V. and VdG e.V. Then the law could actually improve the situation for all agricultural trading companies along the supply chain.

The Unfair Trading Practices (UTP) Directive is a 2019 EU-level directive designed to prevent unfair trading practices in the agricultural and food supply chain. These include last-minute cancellations of goods, late payments and other transactions in which buyers can exploit unequal power relations with suppliers. In November 2020, the German cabinet approved a bill to transpose the EU directive into German law. The law must be passed by May 2021.

Bundesverband Agrarhandel e. V.

The Bundesverband Agrarhandel e.V. (BVA) (Federal Association of Agricultural Trade) represents the interests of the agricultural trade in Germany. The BVA member companies qualitatively process the agricultural raw materials supplied by agriculture, such as grain and oilseeds, by drying and cleaning them and market these products as food and animal feed in Germany and abroad. They also sell seed, crop protection agents and fertilizers as well as animal feed to the agricultural sector. Agricultural trade thus plays a crucial role in the agricultural value chain.

Verein der Getreidehändler der Hamburger Börse e.V.

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Further information:

Bundesverband Agrarhandel e. V.
Martin Courbier
Secretary General
Invalidenstraße 34, 10115 Berlin, Germany
Tel.: +49 30 2790 741-0
E-Mail: zentrale@bv-agrar.de
www.bv-agrar.de

Verein der Getreidehändler der Hamburger Börse e. V.
Christof Buchholz
Secretary General
Adolphsplatz 1, 20457 Hamburg, Germany
Tel: +49 40 36 9879-0
E-Mail: www.vdg-ev.de

Picture: Annegret Hultsch for VdG e.V.

Supply Chain Law must be bearable for all companies

Supply Chain Law must be bearable for all companies

Hamburg, 16 Februar 2021. The Grain Traders Association of the Hamburg Stock Exchange e.V. (VdG e.V.) welcomes the fact that the Supply Chain Law is to create a regulation that aims to ensure fair working conditions, compliance with human rights and environmental protection measures along the entire value chain. However, it must be ensured that responsibility is borne sensibly and fairly by all market and political players. Companies must not be burdened and disadvantaged unilaterally, stresses the German association, which represents international wholesale and foreign trade in cereals, oilseeds, animal feeds and pulses.

“Particularly in agricultural trade, global supply chains are indispensable to ensure food availability. Multilateral trade already promotes prosperity and better living conditions for many people. This includes ensuring fair working conditions and remuneration at all stages. Human rights are non-negotiable and the agricultural trade industry is committed to upholding and enforcing the required due diligence obligations,” explains Christof Buchholz, Secretary General at VdG e.V.. “However, the responsibility must not rest solely on the companies; it is also up to politicians to develop enforceable solutions.” Regulations on liability suits, for example, would have to be formulated in the law in a comprehensible and clear manner in order to continue to give companies legal certainty. Consumers should also be made aware of the power of their purchasing decisions and be involved in responsibility.

The Supply Chain Law initially addresses companies that employ 3,000 people in Germany. After one year, this threshold is to drop to 1,000 employees. Buchholz: “We can understand this consideration. Because of their capacities, large companies are certainly in a better position to meet requirements to a certain extent without being overly burdened. However, we also see the danger that the resulting bureaucratic pressure will be indirectly passed on to small and medium-sized companies, which will be almost impossible for them to cope with.” The law would have to formulate clear guidelines here so that responsibility is distributed appropriately enough to be bearable for the respective company. Especially now, during the pandemic, many companies are already under enormous pressure. This should also be taken into account.

In Germany, there are already regulations under civil and competition law that provide extensive protection for contracting parties in the supply chain. “National laws only help to a limited extent,” said Christof Buchholz. “In addition, the Supply Chain Law must not put German companies at a competitive disadvantage compared to international companies. We therefore urgently appeal to politicians to establish a joint solution at European level.”

In 2016, the German government had issued the “National Action Plan for Human Rights and Business.” In response, many companies were already taking individual steps in the form of voluntary commitments to meet the requirement to link and implement human rights in the supply chain and thus make it more sustainable and transparent. In 2020, however, a survey of over 2,000 German companies by the Federal Ministry of Labor and Social Affairs and the Federal Ministry for Economic Cooperation and Development showed that compliance with human rights is still not guaranteed, particularly among suppliers. As a consequence, the German government announced the Supply Chain Law, which is now to be implemented during this legislative period and is expected to come into force at the beginning of 2023.

Verein der Getreidehändler der Hamburger Börse e.V.

The Verein der Getreidehändler der Hamburger Börse e.V. (VdG) (Grain Traders Association of the Hamburg Stock Exchange) is the federal association of international wholesale and foreign trade in cereals, oilseeds, feeds and pulses and has been the official voice of the industry at the world trading center of Hamburg for over 150 years. It acts as a service provider for its members and also as a partner for administration, politics and business in Berlin, Bonn and Brussels.

Press contact:

Verein der Getreidehändler der Hamburger Börse e.V.
Anika Nicolaudius
Public relations
Adolphsplatz 1
20457 Hamburg / Germany
Tel: +49 (0) 40-369879-12
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