Fairness in the food supply chain: EC welcomes support for greater price transparency

12 Sep 2019 --- The European Commission (EC) will adopt new measures to introduce greater transparency through improved price reporting along the food supply chain. After banning unfair trading practices and improving the conditions for producer cooperation, earlier this year the Commission presented the third element to improve fairness in the food supply chain: stepping up the collection of prices of agri-food products at different stages along the supply chain to see how prices are determined.

The new measures agreed yesterday will apply to the meat, dairy, wine, cereals, oilseeds and protein crops, fruit and vegetables, olive oil and sugar sectors.

Following the latest debate in the Committee of Common Market Organisation, the measures will be adopted by the Commission in the coming weeks and will apply from January 1, 2021. 

Greater transparency will allow different actors to make more informed choices and improve the understanding of price formation and the development of trends along the food chain. It can also support better business decisions, including better management of risk, and improve trust.

“Increasing market transparency is about providing more information, on more products, more often. By doing so, we will give greater balance to the chain and ensure more efficient decision-making,” says Agriculture and Rural Development Commissioner Phil Hogan. “Increasing transparency is also about fairness: we are allowing equal access to price information which will bring greater clarity on how the food supply chain functions.”

“Supplemented by the recently adopted directive banning unfair trading practices, as well as to the improvements to producer organization legislation from 2017, these rules will strengthen the role of farmers in the food supply chain, a key objective for the Commission,” Hogan adds. 

A significant amount of information is already available regarding agricultural markets which includes production and consumer prices, volumes of production and trade. There is little information available on markets that operate between farmers and consumers such as food processing or retailing. This creates an asymmetry of information between farmers and other actors of the food supply chain and can put farmers at a significant disadvantage when doing business with others, notes the EC.

The collection of data will rely on systems and procedures already in place, used by operators and member states to report market information to the Commission. Each member state will be responsible for the collection of price and market data. 

Representative prices will be reported to achieve cost-effectiveness and to limit the administrative burden.

Member states will submit the data to the Commission, who will then make the information available on its agri-food data portal and EU market observatories.

An EU-wide opinion poll published in February 2018 also showed that a great majority of respondents (88 percent) considers that strengthening farmers' role in the food supply chain is important. Previously, 96 percent of the respondents to the 2017 public consultation on the modernization of the CAP agreed with the proposition that improving farmers' position in the value chain should be an objective of the EU's Common Agricultural Policy.

Edited by Gaynor Selby