Fischer Boel warns on widening gap between retail and farmgate prices

THERE is a potential problem if prices paid to farmers are low while food prices in the shops are high, European Farm Commissioner Mariann Fischer Boel has warned.

Writing in her internet blog, she said consumers have probably felt from time to time that they’ve been watching a kind of magic trick in relation to food prices.

“They get the car and the kids back from the weekly food shopping, and turn on the TV to see images of demonstrating farmers.

“Their own wallets just got a lot lighter in the supermarket but the farmers’ wallets are apparently not getting any heavier. So where did the money go?”

Ms Fischer Boel said although farmers get substantial help of various kinds from the EU, they basically make their money by selling what they produce.

“And we’ve seen problems in recent months. Following the now-famous spike of 2007, farmgate prices began to fall sharply as early as the second quarter of 2008. On the other hand, prices in the shops started to come down only recently.”

She said there has been a lot of talk in recent months about the food supply chain.

A communication published this week by the European Commission sets out steps to help solve this problem and others in the food supply chain.

The European Food Prices Monitoring Tool will help people to see what a kilo of pork costs in one country compared with the country next-door.

It will also show how the price of that pork develops as the meat moves along the supply chain from farm to slaughterhouse, to the processor, and finally to the customer’s shopping basket.

Ms Fischer Boel said the EU must do what it can to boost farmers’ bargaining power in the supply chain.

This week’s communication has some more general suggestions.

“Among other things, we need to step up our efforts at EU level to ban unfair contractual practices: for example, powerful businesses should not feel that at the drop of a hat they can just rewrite contracts which they have already signed.

“But the issue of bargaining power, whether in the situation of signing a contract, or otherwise, leads me to a wider point: farmers need to work together,” she said.