A MAJOR study of the food supply chain shows that producing farmers are not making a profit and on average are getting just a third of the final retail price.
The report by the Irish Farmers Association claims the actions of the retail multiples in aggressively competing for market share are undermining the price received by producers to the point where they are putting the sustainability of family farm food production in jeopardy.
It warns unless this is addressed, it is only a matter of time until the food supply chain breaks down and price increases and volatility for consumers become the norm.
“Globalisation and lack of regulation in the banking sector led to the breakdown of financial markets. The same can happen in the food supply chain unless effective action is taken now,” the report said.
The report, Equity for Farmers in the Food Supply Chain, outlines what is needed to bring the primary producer up to break even.
IFA president John Bryan, speaking at the launch of the report in the Mansion House, Dublin, said the clear message to retailers, processors, Government and the European Union is that the food supply chain is broken because farm families cannot survive on prices below the cost of production.
“Farmers are the ultimate price takers at the opposite end of the food supply chain from powerful retailers, which are dictating uneconomic price levels to producers.”
Mr Bryan said an average increase of little more than 5% in the farmer’s share of the current retail price would provide producers with a viable income.
Retailers, processors and food suppliers, in addition to providing real value to consumers, must ensure that primary producers are treated fairly. The evidence shows clearly that this is not happening, he said.
Mr Bryan said the Government and the European Commission must address the market failure in the food supply chain by new regulation and the proper enforcement of existing competition law to tackle anti-competitive conduct.
“The new statutory code of practice promised by the Government must enshrine the principle of fair trade for farmers in the grocery trade by providing a means for the more equitable share-out of the consumer price across the food chain,” he said.
Mr Bryan said the Government must also legislate for an independent ombudsman, who would have the power to demand information from retailers while maintaining the anonymity and confidentiality of suppliers who make complaints.
He said the retailers were in danger of destroying the benefits to consumers of a secure supply of Irish and European food.
“Irish farmers are proud to produce food in an environmentally sustainable way, to the highest standards of traceability, quality, safety and animal welfare, in the world.”
Other proposals cover proper labelling and the auditing of commitments to source Irish products.
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