Welcome For Vote On Fairness In The Food Chain

07 September 2010
Alyn Smith MEP, Scottish full member of the European Parliament's powerful Agriculture and Rural Development Committee, has hailed today's plenary vote on the Bove Report on "Fair Revenues for Farmers: A Better Functioning Food Supply Chain" as a clear signal for "deeds, not words", particularly with regard to improving the bargaining power of farmers in relation to retailers and processors.

The report, which was authored by Mr Smith's group colleague, Jose Bove, and which was approved by an overwhelming majority, calls for tough mandatory action to achieve a level playing field in the supply chain.  This includes prohibiting the sale of agricultural produce below purchase price; altering competition law to allow farmers to unite to increase their selling power; the abolition of abusive marketing practices; the creation of national and EU ombudsmen to enforce codes of good commercial conduct; and the creation of a European Farm Prices and Margins Observatory to gather data about where margins and profits are being distributed.
Mr Smith said:
"Well done to my group colleague for producing such a thorough and useful report.  Until now, the European Commission has promised but not delivered: there have been reviews and high level groups, but nothing tangible in the way of concrete action, and very little in the way of admission that something in commerce matters apart from low prices to consumers.
"The Parliament has today demonstrated that there is overwhelming cross-party, cross-national support behind the principle of specific concrete proposals to alter the marketplace in favour of farmers.  This goes beyond mere transparency and better information, although these are important (and I am glad to see that my Farm Prices and Margins Observatory has been so strongly supported): clearer data alone will not secure farmers better prices or strengthen their bargaining power, or eliminate the abusive practices that put them over a barrel.
"With a five percent global price rise in food during August alone, and with thirteen dead in Maputo from food riots caused by sharp increases in basic commodities; and with volcanic ash shutting down our long distance supplies of food, it is becoming abundantly clear that food security is the issue of the new decade.  We will have to take action on a number of levels to secure adequate, safe and high quality food supplies, not just in Scotland but around the world.  Farming is in our national and global interest.  However, we cannot achieve food security if farmers are forced to walk away from their industry because they cannot get prices and conditions of work which can sustain them in employment.  Farm incomes have fallen in Europe by 28% during this economic crisis, yet the costs of many inputs that farmers rely upon, like feed and fuel, are at record highs.  "Sustainability" is a favourite word of President Barroso, but I think even he could not deny that this situation is not sustainable.  
"I'm also delighted that the Parliament voted for an independent global regulatory agency responsible for setting rules on commodities futures and taking action against speculation in food markets.  The food price spike of 2006-2008 was utterly unprecedented in the last 100 years: through war, revolution and oil crises there were fluctuations, yet nothing like on the same scale.  There is clear evidence that massive speculation in food commodities caused artificial rises in prices which led to food riots and deaths across the globe.  We must not let this happen again, and as any regulatory framework can only be effective by being global, I'm glad the Parliament has supported this." 
Positive outcomes from the vote -

  • Prohibit selling below purchase price.
  • Commission should alter competition law to help farmers increase their bargaining power by organising.
  • Abusive market practices like loss leader pricing and sales commission should be banned.
  • Promotion of fair contracting, with standard contracts useful tools.
  • National and EU ombudsmen for food retail to enforce code of conduct.
  • Uniform rules on listing fees with action against excessive fees.
  • Independent global regulatory agency setting rules on commodities futures and taking action against speculation in food markets.
  • Codes of good commercial practice for the food chain.
  • European farm prices and margins observatory should be carried out.

Negative outcomes from the vote -

  • Provision for the preferential treatment of farmer co-ops and SMEs in public procurement defeated.