‘Supermarkets enjoy super-power over farmers on price’ – Hogan

Farm leaders have rowed in behind a compelling speech from European Commissioner for Agriculture and Rural Development, Phil Hogan, on supermarket “super-powers” over farmers.

Speaking at a Food Safety Authority of Ireland (FSAI) conference on ‘Safeguarding The Food Chain’, Commissioner Hogan highlighted that a “clear imbalance of power”,  between producers and retailers, has resulted in the farmer’s share on food spend being “continuously squeezed”.

Concretely, supermarkets in particular now enjoy ‘super-power’ due to the twin effect of increased globalisation and a high level of concentration within Europe. This gives them disproportionate leverage over primary producers.

“The imbalance of bargaining power between price setters and price takers is stark, leading to a situation where there is a real ‘fear factor’ for farmers of commercial retaliation, late payments and other headaches,” he said.

“Existing mechanisms such as the EU Supply Chain Initiative are not perceived by farmers to have any real teeth as they are voluntary, and lack serious consequences for retailers engaging in unfair trading practices,” he told attendees at the event in Dublin Castle.

As someone who grew up on a small family farm, commissioner Hogan said he understands that the bottom line comes first.

“If farmers don’t get a fair price for their work – if they can’t make a decent living – then we have a real problem.”

Our consumers can only be guaranteed a reliable food supply if farmers are guaranteed a reliable income and a fair share of the pie.

He warned that the importance of a well-functioning food supply chain has become a pressing issue at EU level, with a number of policy options and effective enforcement regimes currently under consideration to tackle the problem head-on, and to strengthen the voice and position of the farmer.

Other recommendations include: increasing market transparency; enhancing co-operation among farmers; facilitating farmers’ access to finance and improving the take-up of risk management tools.

“Regulators and policymakers can never afford to lose sight of one salient fact: Without the primary producer, there is no food supply chain. And primary producers can only do their vital work if they receive a fair buck for their work,” he said.

John Comer, president of the Irish Creamery Milk Suppliers Association (ICMSA), welcomed the commissioner’s speech as “a step towards a very long overdue re-balancing of power and margins” in the EU’s food supply chain.

The ICMSA expresses unqualified support for any moves by the commission to curb the abusive dominance obvious to anyone looking at ‘who-gets-what-and-for-what’ within the EU’s food supply chain. I hope fairness for farmers is on the way.

Meanwhile, also speaking at the conference, Mairead McGuinness, MEP and vice-president of the European Parliament, described the scale of food fraud as “alarming”, with potential to “get worse” unless efforts are made to strengthen co-operation between regulators and police forces.

She stressed that such co-operation is key to the effectiveness of new food regulations to take effect in 2019.

The romantic notion of the hayfield of the past, and the farmer at the gate, is far removed from the reality of today’s intensive agriculture.

“The food supply chain of today is more complicated and more global, with many opportunities for fraudsters to make a killing by mislabelling, using cheaper and sub-standard ingredients and worse still, placing unsafe food on the market – all in the interests of a quick buck.”

“We need systems that are more rigorous to close gaps which allow food fraud to occur but better still we need risk assessments to target areas where fraud is more likely to occur and stop the fraudsters in their tracks,” she said.

She warned that Brexit poses a real challenge around food authenticity, not just on the island of Ireland but between the EU and the UK.

“We need the UK to stay within the EU food regulatory system. If there is a divergence then food fraud could escalate and standards drop,” she concluded.