Unfair Trading Practices legislation will not fix the agriculture crisis

Over the last week, various assertions have been made about the relationship between the farming crisis and commercial dealings in the supply chain. These create connections which are simply not supported by facts

- Experts and widely published data show that the current milk and livestock crisis is structural and comes from farmers increasing production (in some member states more than 20% more compared with 2015) at a time of collapsing prices and low demand;

- Retailers have only limited influence in markets where they have very few direct relationships with farmers. In the case of liquid milk or fresh meat, only a small proportion of production (less than 20%) ends up in retail, with the rest going into manufacturing and catering;

- UTPs are being addressed through national legislation and the Supply Chain Initiative, which was agreed with farmers, who subsequently declined to sign up to it; today over 1200 companies including a critical mass of retailers have joined the initiative.


In order to meet ever-changing consumer demand, retailers need and support a farming sector which is:


- better organised: the countries least affected by the crisis are also countries where farming is better organised – e.g. through cooperatives or producer organisations;

- more responsive to consumer demand: today in certain countries affected by the crisis, demand for organic milk or pigmeat is not being met by farmers domestically and the organic products have to be imported;

- more responsive to market signals: by maintaining high production levels, producers are only serving to drive the market price down further; this has to stop. Retailers are keen to share market information with farmers to help them plan, and to encourage them to add value on the farm to meet increased demand for locally-sourced or artisanal products.


In these circumstances, we ask policy makers:

- to maintain a market-oriented CAP that respects the single market and open competition, and supports producers in adjusting to market signals;

 - to reduce the unnecessary administrative and financial burdens which add to farmers’ production costs;

- to encourage a structured supply chain dialogue among sectors, including manufacturing, e.g. through interbranch organisations, to better anticipate consumer needs;

- not to forget that markets are about the needs of consumers, many of whom are still struggling to make ends meet since the economic crisis.

Retailers are an easy target, but the wrong one in seeking a scapegoat for a crisis which is internal to the agricultural market; reducing the level of competition or adding further regulatory burdens at any stage of the supply chain will only come to the expense of consumers through higher prices, less choice and less innovation.