CAP reform may lower consumer food prices by 6% in short term

CONSUMERS will enjoy some limited reduction in food prices as a result of reforms to the Common Agriculture Policy.

That's the view of John O'Connell, Department of Agribusiness in UCD, in an article published in the Irish Banking Review.

"Given that EU farmers probably receive no more than 30% of the average consumer euro spent on food, a relatively large farm-level price reduction of 20% will result in only a 6% reduction in consumer food prices. Thereafter, consumer food prices will probably continue to increase as the marketing sector continues to add more services and as unit costs in that sector increase."