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New Food Price Legislation Needed, Say MEPs

by 5m Editor
29 June 2010, at 12:24p.m.

EU - New legislation is needed to ensure fair returns to farmers and transparent prices to consumers, by enforcing fair competition throughout the food supply chain, said Agriculture Committee MEPs yesterday (28 June).

Suggestions as to how to ensure fairness throughout the food chain, by tackling dominant positions, unfair commercial and contractual practices and late payments, and also by improving the bargaining position of farmers, are set out in a report drafted by José Bové (Greens/EFA, FR) and approved with 32 votes in favour, four against and two abstentions. This report responds to a Commission communication on reforms needed to improve farmers' returns and consumer price transparency.

New legislation, including penalties, to enforce fair competition

Penalties and a complaint mechanism should be put in place to discourage unfair behaviour by market players, says the committee. To monitor relations between producers and retailers and if necessary re-balance them, an EU-wide instrument could be put into effect through specialised bodies in the Member States. Actions to be taken should include an analysis of possible misuse of private labels, i.e. on retailers' 'own brand' products, and a pilot project to create a European 'observatory' of farm prices and margins, it adds.

The Commission is urged to propose legislation to limit dominant market positions at every stage of the supply chain, 'including the food processing industry and retailers', says the text, which adds that companies engaging in unfair practices should be 'named and shamed'.

Compulsory reporting for top buyers

Top European traders, processors, wholesalers and retailers should have to report their market shares on key food items annually, and the Commission is urged to make a proposal to this end. This would allow all market players to estimate demand and supply trends, say MEPs.

The recently approved European food price monitoring tool should be made more user-friendly and cover a larger number of food products, so as to offer better comparability of data and make prices more transparent both for consumers and for farmers, adds the committee.

Fairer contracts and an end to late payments

Standard contracts could be useful tools in preventing practices such as the alteration of contract terms, late payments, resale at a loss and unjustified listing fees, say MEPs. In some sectors, these contracts could even be made compulsory.

Specifically, the Commission is urged to examine the effects of 'contract farming', imposed by buyers, which can weaken farmers' bargaining position. Finally, the committee asks that the Commission table legislation to reduce the maximum period allowed for payments from buyers to producers to 30 days for all.

Finally, the text asks the Commission to report on the issue of wasted food, which on some estimates accounts for up to 30% of food produced, and to launch a campaign to raise awareness of the value of food.

In the chair was Rares-Lucian Niculescu (EPP, RO) and the Rapporteur was José Bové (Verts/ALE, FR).