Brussels, 20/02/2009 (Agence Europe) - On 17 February, the European Parliament agriculture committee adopted the report by Katerina Batzeli (PES, Greece) which addresses the issue of the differences between prices paid to farmers and the prices paid by consumers. The report, adopted by the wide majority of 33 votes to four, with two abstentions, recommends, in substance, correcting market weaknesses and encouraging direct relations between consumers and producers to ensure reasonable prices for the former and a decent income for the latter.
Following the sharp rise in food prices in 2007/2008, the difference in prices paid to the producers and those paid by consumers is such that the European institutions feel that they have to react, says the own initiative report, which will be debate by the European Parliament during the plenary in Strasbourg from 9 to 12 March 2009.
Increasing concentration and abuse of dominant position. According to MEPs, the causes of these price differences can be found in the “increasing concentration” along the whole of the supply chain and the “abuse of dominant position” apparent in retailing and, to a certain extent, at the wholesale stage.
Noting that the European Commission communication on this issue (adopted in December 2008) does not address the matter of abuse of dominant position, the agriculture committee is scathing in its criticism of practices which “constitute a serious blow to fair competition”, such as exclusivity agreements, product tying obligations, etc, and trade practices such as loss leading, greatly reduced prices and linking products. It calls for stronger European action in this area.
Price monitoring, passing on changes. MEPs welcome the Commission's proposal of a European system of monitoring of the market. They believe that such a system would register price trends across the whole supply chain and allow cross-border comparisons of similar products. The committee states, too, that falls in price should be passed on to consumers in the short term and the price rises should be more speedily passed to the producer.
Database and international monitoring centre. The committee wants the Commission to propose the establishment of a Europe-wide electronic database, that the man-in-the-street can easily access, with reference prices of products, together with energy and wage costs, rents, duties and taxes from all across Europe. It feels, too, that an international centre to monitor the costs of agricultural products, inputs and foodstuffs should be set up, in cooperation with the FAO, so that a closer eye can be kept on these data at international level.
Producer organisations and “local produce”. The Batzeli report proposes concentrating the supply of agricultural products through producer organisations, cooperatives or other similar types of organisation to rebalance farmers' clout and negotiating power in the food chain. It notes, too, that local distributors make a large contribution to reducing the huge gap between producers and consumers. MEPs, then, call for measures to be taken to further the idea of “local produce”, particularly promotions and customer awareness campaigns on the special characteristics of these products, the health and economic benefits of eating them, together with traditional forms of market support and other traditional forms of trade, which bring direct contact between consumers and producers.
In February 2008, the European Parliament adopted a declaration calling on the Commission to investigate the consequences of concentration in the European mass marketing sector and abuses by the major supermarket chains, and to take the necessary regulatory steps (see EUROPE 9605). In October 2007, when food prices were spiking, the EP passed a resolution restating the need to tackle the excessive increases being made by the mass distribution sector. (L.C./transl.rt)