Europe’s agri-cooperatives called on the Commission on Tuesday (22 August) to increase transparency in the food supply chain and enact EU legislation to protect food producers from the unfair trading practices of their economically stronger partners.
As part of its Better Regulation drive, the EU executive launched in July an Inception Impact Assessment (IIA) on its initiative to improve the food supply chain. Meant to inform stakeholders and provoke debate on the issue, the IIA was complemented in August by opening a public consultation on how to make the food chain fairer.
Farmers have long seen the distribution of value in the food chain as unfair: high input costs and low prices leave them with only a small share of the price paid by consumers in the supermarket.
According to Copa and Cogeca, an association of European farmers and agri-cooperatives, farmers’ earnings are just 40% of the average across the EU.
In its introduction to the IIA, the Commission said this poor income distribution was “due, for instance, to differences in bargaining power between smaller and thus more vulnerable commercial operators, including farmers, and their economically stronger and highly concentrated commercial partners”.
Responding to the IIA on Tuesday (22 August), Copa and Cogeca Secretary-General Pekka Pesonen called for European legislation “to improve farmers’ positioning and to stop unfair trading practices”. He stressed that voluntary initiatives developed by retailers and processors had failed to deliver results for farmers.
“It is unacceptable that farmers get for example only 20% of the price of a piece of steak when they are the ones who do the majority of the work in producing it,” Pesonen said.
Copa and Cogeca also called for greater transparency in the food chain. This could help farmers to make better-informed decisions and improve their bargaining power with commercial partners.
Agriculture Commissioner Phil Hogan conceded that Europe’s food supply chain did not always work in the interests of the producers themselves. While the entire food chain relies on the work of farmers, “they often remain the weakest link” in that chain, he said.
Joe Healy, the president of the Irish Farmers Association (IFA) said, “Government cannot afford to wait any longer to provide direct support for beef farmers and mushroom growers who are being impacted today by the Sterling depreciation. Unless action is taken promptly, irreparable damage may be caused to the viability of beef farmers and mushroom producers”.
Mr Healy said, “I have written to Minister Michael Creed to highlight the need for urgent Government and EU action.
“It is imperative that the Government now seek EU support for farm level measures that will counteract the price drops being experienced, which are arising directly from the Sterling depreciation, independent of other normal market forces.
“IFA clearly signalled the need for this support at our Brexit event in April, in the event of the kind of significant Sterling devaluation that has now occurred.”