The Commission is gathering data on the “necessity and expedience” of possible measures that could be implemented at a European Union level to address or regulate “unfair trading practices with respect to agrifood products”.
The Commission noted that it is “keen” to assess the level of market transparency across the supply chain and where it can be improved. “Considering the need for some degree of competition, the consultation will help judge whether the introduction of supplementary EU market transparency arrangements is necessary,” the EC said.
Finally, the EC added, it wants to gauge interest in “producer cooperation” and the use of so-called “value sharing agreements”. This could include sharing “market bonuses and losses" resulting from changes in market prices. These mechanisms are already in use in some sectors, such as sugar.
‘Inadequate’ distribution of value
Releasing details of the consultation, the Commission suggested that there is evidence that “added value” in the food sector is not “adequately” distributed across the supply chain. It said that there are differences in bargaining power between “vulnerable operators” such as small businesses and farmers, with power concentrated in the hands of “highly concentrated” large food manufacturers and retailers.
“Farmers are the first link in the chain and without them, there would not be food to process, sell and consume. However, we notice that they often remain the weakest link,” agriculture and rural development Commissioner Phil Hogan said.
"It is to address the shortcomings in the food supply chain that we are leading the way to act, in accordance with the Commission's longstanding position to stand by European farmers."
Building on Agricultural Market Task Force findings
The consultation has been designed to build on the findings of the Agricultural Market Task Force (AMTF), which was established by Hogan in January last year.
The AMTF made a number of recommendations on how the EC can address the imbalance of power in the supply chain. These included increased transparency, legislation and enforcement to combat unfair trading practices, financial support for farmers and improved risk management tools.
Hogan suggested that these measures are being considered in order to “strengthen the role of the farmer in the food chain”.
While these suggestions added to the debate over how to protect agricultural producers, a spokesperson for the EC told FoodNavigator that it is too early to say what actionable outcomes could emerge from the consultation process. “Further initiatives will depend on the outcome of the public consultation, so we cannot speculate at this point,” the spokesperson noted.
The consultation was opened in English yesterday and will be available in all official EU languages in the “following days”. It will close in November, with further evaluation to follow. “Further process will depend on the outcome of the public consultation, so we cannot speculate on a timeframe at this point,” the spokesperson concluded.