The European Union’s newly established Agri-Food Chain Observatory (AFCO) intends to “bring together Member States and European Institutions, to increase transparency on prices, structure of costs and distribution of margins and added value.”
September 4, 2024
One month on from its first meeting, work has begun on restoring trust and improving food chain transparency that has been dented by recent protests by French farmers and small food producers dissatisfied with rules governing remuneration, among other grievances.
“AFCO’s main tasks include exchanging information and taking stock of the situation in the food supply chain,” explained a spokesperson for the European Commission (EC).
“In the medium-term, (AFCO will) develop methodologies to assess and monitor the structure of costs and the distribution of margins and added value along the chain.”
With the second plenary meeting scheduled in autumn of this year, it is hoped that member states and stakeholders take heed of the comments made by the Commissioner for agriculture, Janusz Wojciechowski.
Here, he made direct reference to the farmer protests in early 2024, which highlighted significant discontent with the functioning of the food supply chain.
“One of the main issues to emerge was a sense of discontent in the functioning of the food supply chain, expressed by farmers who feel that their work is not sufficiently rewarded,” he said.
“With this new Observatory, we gather operators from across the supply chain around the same table, alongside the Commission and public authorities.
“Our aims are to exchange reliable information in a trustworthy manner; to deliver increased transparency on costs and margins; and to share expertise, identifying trading practices and contractual arrangements that may have positive or negative impacts on the functioning of the chain.
“Ultimately, the Observatory will aim to reinforce trust throughout the supply chain and thereby contribute to our overall goal: that every actor – from farm to fork – is fairly rewarded for their work.”
Measures proposed by the Commission include stronger enforcement of EU rules that govern unfair trading practices (UTPs) that especially impact farmers and small food producers.
The protests by French farmers highlighted the inconsistencies of the food supply chain in the European region, placing it back in the consciousness of consumers and producers.
The issue was last on the political agenda back in 2019, where the EU introduced a directive governing against these trade practices. Member states that adopted the directive into national law often employed stricter rules than those set by the EU.
Italy is one example, where the country adopted UTP-preventative laws that demand agreements between farmers and food firms must be transparent, fair, and reciprocal of performance.
Under these new rules, French dairy group Lactalis was fined €74,145 by Italy’s Ministry of Agriculture for alleged “unfair practices” concerning the prices paid to farmers for supplying milk.
Likewise, in February of this year Greece proposed a clampdown on time of payments with new legislation regulating the commerce of agriculture and food between suppliers and buyers that includes efforts to address the bargaining power of large supermarkets.
“The EU has already adopted several measures to help correct imbalances in the chain while preserving the fundamental principle of market orientation,” said the EC’s spokesperson. “The EU strengthens farmers’ position in the food supply chain and combats certain unfair trading practices.”
“Furthermore, the EU also encourages farmers to organise into producer organisations (POs) and cooperatives to strengthen their bargaining power in the market and negotiate fairer terms with buyers.”
The spokesperson pointed out that in order to ensure that agricultural markets were functioning correctly and to monitor their development, the Commission gathered information from EU countries and stakeholders.
“The creation of the EU Agri-Food chain Observatory (AFCO) precisely aims to contribute to reestablishing trust and increasing transparency on prices, costs and margins in the supply chain.”
