Fischer Boel: Food prices out of touch with the reality for farmers

FOOD prices seem rather out of touch with the reality at the end of the food chain, European Agriculture and Rural Development Commissioner Mariann Fischer Boel has noted.

In her web-blog, she said the belief that farmers get lots of money for their products is clearly not the case at the moment. “But I can understand how people, whose main association with the word milk price is that of a litre of milk in the supermarket, would get such an idea.”

Ms Fischer Boel said every time she goes back to Denmark she is stunned by the price of bread at the local bakery and at the high food prices in general. “And if we take a quick glance at the rest of Europe, prices may not be as elevated as in Denmark, but they still seem rather out of touch with reality at the other end of the food chain.”

Ms Fischer Boel said right now milk farmers all over Europe are struggling with low prices. For example, a typical Belgian farmer is paid 25 cent per litre of milk. When that litre of milk reaches a Belgian supermarket, the price tag easily reads €1.25, or five times as much.

And the picture is the same in many other European countries, although consumer prices for dairy products have started to fall in some member states.

She said the European Commission has already taken a number of measures to help farmers affected by the crisis. But, at the same time, the situation also calls for the entire food chain to be scrutinised.

“Who is profiting from the growing gap between farm and consumer prices? How much? It is not only dairy farmers, who get a declining share of the consumer price. The situation is the same for bread and meat.

“That is why I am very content that the commission will now set up a price monitoring system for bread, milk and a meat product.

“We will keep track of price developments from farm to fork throughout Europe and hopefully this will ensure that no one is tempted to abuse their market position at the expense of farmers and consumers,” she said.

Ms Fischer Boel said, when the price of wheat went up last year, she wondered quite publicly why bread prices skyrocketed, when the share of wheat in the cost of producing bread was relatively low.

“Back then, I was told by industry that the share of agricultural raw material was in fact much higher and that rising energy prices also had an impact.

“Now with wheat and energy prices having dropped dramatically during the last year, I think it is legitimate to wonder again and ask: why aren’t bread prices following suit?”