Brussels, 27/03/2009 (Agence Europe) - On Thursday 26 March in Strasbourg, the European Parliament recommended that irregularities in the food market should be corrected and direct relations promoted between consumers and producers in order to ensure reasonable prices for the former and profits for the latter. The report by Katerina Batzeli (PES, Greece) on food prices in Europe was adopted by the European Parliament by 390 votes to 112 and 71 abstentions. Despite the existence and the vote on an alternative resolution, the report by Ms Batzeli was not amended compared to the vote in parliamentary committee last month (details in EUROPE 9845).
The EP considers that “among factors that most influence the price transmission mechanism and the gap between consumer and producer prices, increasing concentration along the whole of the food supply chain, the degree of product processing and price rises linked to other external cost factors, as well as speculation with agricultural commodities, play a determining role”. The EP reaffirms, therefore, the importance of market regulation instruments, which are more necessary than ever in the current climate.
The EP endorses the Commission's proposal to establish an “efficient European market monitoring system”, which will allow price trends and input costs to be monitored across the whole food supply chain. MEPs believe this measure could be backed by the establishment of a Europe-wide database, easily accessible to European citizens, which will give greater transparency regarding the reference price of products and inputs, energy costs, salary costs, rents and levies throughout the EU.
Furthermore, the EP considers that “the concentration of agricultural production supply by means of producers' organisations, cooperatives or other similar bodies, would make it possible to shift the balance of power within the food chain, by increasing farmers' negotiating strength, giving greater added value to their products, and shortening marketing channels to consumers”.
Bringing producers closer to consumers. In its resolution, the EP: “notes the added value of local retailer shops that provide an important contribution to bridge the gap between producers and consumers and also improve the quality of life in rural areas by creating work opportunities and reinforcing existing social links”. It also calls for measures to be taken to strengthen the concept of “local products”.
Alternative resolution is rejected
An alternative resolution to the report by Ms Batzeli, supported by the ALDE Group and other members of the EPP-ED Group (including Astrid Lulling and Christa Klass), has been rejected. Put to the vote, the resolution was backed by 131 MEPs, but rejected by 300 (and 39 abstentions). The text refused to attribute a large part of the responsibility for the considerable differences between producer prices and consumer prices to large retailers. It was also against: - an investigation into the breakdown of margins in this sector; - the creation of a European database for food prices accessible online; - and the creation of an international observatory for agricultural product prices.
European Commission fears further price surge for raw materials
During the brief debate on this report, on Monday 23 March, Louis Michel pointed out on behalf of the European Commission that the agricultural sector is going through a “real collapse” in market prices which “seriously compromises farmers' income”. The situation is particularly serious in sectors with high added value, such as meat and dairy products. Furthermore, the analysis of structural factors “makes one fear a further surge in the price of agricultural raw materials over the medium and long term”, the European commissioner for development and humanitarian aid added. In his view, by improving the working of the agri-food sector, it should be possible: - to avoid such large price rises for raw materials in the future; - and halt consumer price instability. He said he shared “most” of the concerns expressed in Ms Batzeli's report concerning the need to improve the overall working of the agri-food sector (strengthening transparency from one end to the other, providing consumers with better information and improving the breakdown of added value throughout the agri-food branch).
Mr Michel then went on to speak of the initiatives taken by the Commission, mainly highlighting the need to move forward in setting up a permanent European Observatory for the agri-food sector and food prices. Also, he said, it is necessary to go further in analysing the breakdown of added value throughout the sector.
The asymmetrical power of negotiation between agricultural producers and the rest of the sector “weighs heavily on producer margins in the agricultural sector”. From now on, an effort of clarity and comprehension regarding the question of added value distribution would be “a first step towards rebalancing the power of negotiation throughout the sector”. “It is essential for the agri-food industry and retailers in the agri-food sector to be able to continue to count on a sustainable and competitive agricultural production platform within the European Union”, Louis Michel said. (L.C./transl.jl)