European Commissioner for Agriculture Phil Hogan has called for “a strong political campaign from stakeholders” to help secure legislation that will tackle the imbalance of power and unfair trading practices in the food industry.
In a speech to the Irish Farmers Journal Dairy Day event in Punchestown last Thursday, the commissioner highlighted the power of supermarkets, not just in Ireland but across Europe.
He highlighted the Irish example and told delegates that five supermarkets now control 90% of the Irish retail trade and traced this back to the abolition in 2006 of the Groceries Order, which had prevented below-cost selling in shops.
The commissioner took the view that arising from this “food producers and processors now had to support supermarkets”.
He said “a leading supermarket was found to be using these payments to exaggerate profit levels”, and the Irish Farmers Journal has heard recently of a supermarkets taking issue with a food industry supplier on their level of profits.
It is no longer enough for farmers to join an organisation and feel their lobbying is taken care of
He went on to tell the conference that the European Commission will publish proposals in the new year following the consultation which closed just over a week ago. It is in the Commission’s work programme for 2018 but that in itself is no guarantee of a positive result.
Part of the problem is that this issue crosses into the territory of the powerful Commissioner for Competition, Margaret Vestager.
There is also an issue of mixed views among EU member states. Some countries such as the UK have their own legislation and ombudsman while others have a strong belief in the free market and not favouring legislation of any type.
Public opinion
The commissioner’s call for a political campaign from stakeholders demonstrates the influence public opinion now has on political developments.
It does make for poor politics and lack of leadership, as the glyphosate debate demonstrates. However, it demonstrates that the loudest voices and the campaign with the biggest numbers is likely to be heard.
In a general sense, this demonstrates it is no longer enough for farmers to join an organisation and feel their lobbying is taken care of. When there are mixed levels of support for this type of legislation, every voice in favour increases the chances of it happening.
Where does the value go?
In addition to unfair trading practices at retail level, farmers are also greatly concerned about where the value goes once the product leaves the farm gate.
The IFA have suggested the EU should legislate to use something like the US model, which involves publishing stocks of product in the processing chain and the value of each product at wholesale level.
This knowledge can be captured in the US without damaging the industry and there is no reason why it couldn’t be in the EU as well.
If introduced here, it would make a huge contribution in increasing farmer confidence in the processing industry.
Dairy sector needs to manage problem of overproduction – Hogan