The European Commission yesterday (28 October) launched an inquiry into the food supply chain for unfair contractual practices imposed on small farmers by major retail chains and other buyers, in a drive to curb future food price increases and ensure farmers get a fair share of the price of end products.
The Commission report, published on 28 October, represents the conclusions of a year-long inquiry into the food supply chain.
The paper notes that “significant imbalances” in contractual relations between actors in the food supply chain have been identified. Tensions stem from differences in bargaining power and may lead to unfair trading practices, the paper says.
Therefore, the EU executive plans to investigate how farmers’ bargaining position can be strengthened vis-à-vis larger buyers “be they producers, wholesalers, retailers” or large multinational food producers.
It said small food producers’ market position could be strengthened by creating producer organisations, in the context of EU rural development policy and the post-2013 Common Agricultural Policy (CAP), for example.
Earlier this week, French President Nicolas Sarkozy said a new farm bill to be finalised by the end of the year would include the development of state-regulated contractual agreements between farmers and food industry clients for each farm sector (EURACTIV 28/10/09).
“As recent developments in the dairy market show, there is too often a disconnection between the price the farmer gets and what the consumer pays in the shops,” agreed EU Agriculture Commissioner Mariann Fischer Boel, adding that the EU needs to ensure that producers of farm products can make “a decent living”.
European food prices monitoring tool
The Commission communication also highlights “the lack of transparency of prices along the food chain” and the increased volatility of commodity prices.
To increase transparency, EU statistical office Eurostat published a first version of a European food price monitoring tool alongside the Commission communication.
The tool brings together the available data collected by Eurostat and national statistical offices on price developments in the different stages of the supply chain, and compares price developments for various agricultural commodities, food industries and chosen consumer goods.
Food supply chain forum
The Commission also plans to expand the membership, status and mandate of the current High-Level Group on the competitiveness of the agro-food industry to turn it into a forum for discussing the food supply chain.