A new regulation against unfair business practices in the food chain is set to compel retailers to show their profits, according to Fine Gael MEP Sean Kelly.
The representative for Ireland South said the new legislation, expected to be published this spring, is aimed at bringing more financial transparency to the food chain – allowing more profit to go back to the primary producer and farmer.
Sitting down with AgriLand in Valencia, Spain, at the European People’s Party group meeting, Kelly said he is confident the new legislation – which European Commissioner for Agriculture and Rural Development, Phil Hogan, is currently working on – will bring more “fairness” to the agri-food industry.
“They are hoping to publish the new legislation before May and obviously transparency is going to be an issue.
I’d be expecting a key element whereby processors and retailers will have to reveal their profits per animal and that an end will be put to things like ‘hello money’ and some discriminatory measures that might be used against producers.
“Primary producers are very vulnerable and I think that it is only by attacking the issue in a legislative way that you can actually bring the fairness that is required,” he said.
Kelly says the legislation will be a very welcome move at farm level.
“Anything that brings transparency, fairness and accountability where people can see where profits are going is welcome. If one section is making massive profits and the others – like the primary producers – are not even making profits sometimes, obviously then something has to happen,” he added.
Opposition to legislation
However, Kelly also anticipates that the looming legislation will ignite strong opposition and lobbying at industry level.
That’s why it hasn’t happened up until now; every trick in the book has been used to make sure that it won’t happen.
“They were talking about voluntary code and so forth; but, it’s quite obvious that unless there is legislation at European level – which will now be coming, hopefully, to the system – we will not really get the results that we want, which is fairness across the board.
“There will be proposals that will compel retailers to at least show their profits, the way they operate and more accountability in relation to what is going back to the primary producer, waste and the way that will be dealt with. It will be very comprehensive,” Kelly said.
He added that the commissioner will be consulting with all stakeholders on the proposed changes.
Commissioner Hogan previously highlighted that there is a “clear imbalance of power” between producers and retailers with the farmer’s share on food spend being “continuously squeezed”.
Last year, the commissioner set up the Agricultural Markets Task Force – an initiative which proposed a number of concrete ways to strengthen the position of farmers in the food supply chain.
After consulting with the public and all stakeholders on a number of issues relating to farmers’ position in the food supply chain – including: unfair trading practices; market transparency; and producer cooperation – the commission established a number of policy options and effective enforcement regimes to tackle the problem head-on.
Other recommendations are expected to include: enhancing cooperation among farmers; facilitating farmers’ access to finance; and improving the take-up of risk management tools.