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Spanish government to address farmers' protests by guaranteeing profit margins

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MADRID (Reuters) - Spain’s leftist government on Tuesday approved a series of measures to ensure that farmers, who have been protesting for weeks against low food prices and precarious working conditions, are not forced to sell their produce at a loss.

In recent weeks agricultural producers have staged marches across dozens of Spanish towns, blocking main roads for hours in protests that in some cases led to clashes with police. [nL8N2AL4AL]

The protests in Spain are part of a broader pattern of agricultural discontent across the European Union where farming subsidies have emerged as a point of contention in budget negotiations in Brussels.

Under the proposed law, sales contracts would be indexed to production costs, ensuring that farmers do not have to sell at a loss, Agriculture Minister Luis Planas said after the weekly cabinet meeting. Spain’s Socialist-led minority coalition government also comprises the far-left Unidas Podemos.

The measures aim to give farmers and ranchers more power in negotiations with supermarkets and large distributors.

The bill aims to limit heavy discounting by supermarkets as retailers will only be allowed to sell below the production cost if the expiration date of a perishable product is close, but they will not be able to pass the loss on to the farmer.

“There is a clear imbalance in the food production chain, the government’s aim is to restore balance between all the links and ensure a transparent price system,” Planas said.

The bill also gives temporary workers in some Spanish regions more grounds to request subsidies.

“The government believes it is possible that prices don’t rise (for the consumer) and at the same time that farmers get a fairer price for their products,” Planas said.

Reporting by Emma Pinedo, editing by Andrei Khalip and Grant McCool