SMK introduces sustainability fee for On the way to PlanetProof

SMK, the organization that manages the independent label On the way to PlanetProof, has made agreements with supermarkets on making the sustainability fee transparent for farmers and growers incurring additional costs for more sustainable cultivation and certification. Aldi, Lidl, Jumbo and Superunie have agreed to include the sustainability fee in the purchase price, making it visible on purchasing contracts and invoices. The arrangement makes sure that the sustainability fee remains transparent throughout the supply chain and is paid to farmers and growers. The specific fees are published by SMK and are based on research carried out by an independent organization. 

The sustainability fee is set for unprocessed  fruit and vegetables and potatoes, and is of great importance in enabling farmers and growers to take further steps in sustainability. SMK intends for other On the way to PlanetProof product groups to follow. SMK is very pleased with the cooperation of the supermarkets and looks forward to farmers and growers receiving clarity on compensation for sustainability costs. Rewarding the efforts of growers is also a prerequisite for further sustainability.

ACM

Prior to establishing the sustainability fee, SMK requested a preliminary review from the Netherlands Authority for Consumers and Markets (ACM) regarding competition law. ACM concluded that there is no restriction on competition, allowing SMK to introduce the sustainability fee regulation and make agreements with supermarkets. More information. 

Structure of the sustainability fee

The sustainability fee is intended to cover the average costs to meet the requirements of On the way to PlanetProof. The independent research agency CLM has calculated the additional costs per hectare based on three components:  

1. The costs resulting from the above-legal requirements of certification, such as the use of more sustainable techniques or means of production; 
2. The administrative costs/time investment;  
3. The certification costs (inspection costs and certification fees).  

The research agency verified the results of the calculations with growers’ advisory groups. The calculations were based on averages such as farm size and the company’s level of innovation. This analysis covered five different product groups: arable farming, open-field vegetables, fruit cultivation, greenhouse horticulture and cultivation in growth rooms. Based on the additional costs per hectare or square meter and the average yield of Class 1 products per hectare or square meter, the sustainability fee per unit of product was then calculated.

Implementation of the regulation

The amounts of the sustainability fee for unprocessed fruit and vegetables, and potatoes have been published. From now on, supermarkets have time to arrange the sustainability fee in collaboration with their supply chain partners. The sustainability fee will be applicable to all purchases by participating supermarkets starting no later than 2025. Later this year, the regulation will also be incorporated into the Chain of Custody requirements, and it will be determined how the implementation of the regulation by supermarkets and trading companies will be assessed. The amounts of the sustainability fee will be independently evaluated annually and adjusted if necessary. Thereby, these amounts will be indexed and revised based on the (above-legal) requirements of the certification scheme and feedback from practice.