Finnish MEPs Anneli Jäätteenmäki (Centre) and Nils Torvalds (SFP) have expressed their support for a directive proposal designed to improve the bargaining position of agricultural producers in the food supply chain.
“If you look at the shares everyone is getting for agricultural products, they probably aren’t divided in a way that’s fair,” says Torvalds.
“I’d say there’s something wrong if the farmer’s share of a product is maybe five per cent and the retailer’s mark-up is 42 per cent,” he adds, referring to a campaign launched last month to support domestic producers by Kesko. The retail conglomerate has raised the producer prices of a total of 30 products until the end of the year in an attempt to increase the appreciation of Finnish food and food producers.
The Finnish Commerce Federation has voiced its bafflement with certain details of the draft directive, such as the proposal to prohibit grocery retailers from forming procurement consortia to increase their bargaining power and leverage the economies of scale. Both Kesko and S Group, for example, would no longer be able to procure products for their independent shopkeepers and regional co-operatives.
“Almost all retailers are part of international procurement consortia,” reminded Janne Koivisto, a senior expert at the Finnish Commerce Federation.
Both Jäätteenmäki and Torvalds contrastively believe the proposal to be a step in the right direction and view that the bargaining position of retail consortia is unfairly strong in comparison to agricultural producers.
“I think this addresses the right issue. I hope it’ll be passed,” said Jäätteenmäki.
The European Commission similarly gauges in its proposal that agricultural producers are “particularly vulnerable” to unfair trade practices as they typically lack the bargaining power to match that of their partners downstream in the supply stream.
“This is because alternatives for getting their products to consumers are limited,” is explains.
The Central Union of Agricultural Producers and Forest Owners (MTK) has published estimates of the price structure of agricultural products. Roughly a fifth (20.3%) of the price of potatoes, for example, goes to the producer, two-thirds (67.5%) to the retail and food industry, and over a tenth (12.3%) to the state in tax revenues.
Only 3.3 per cent of the price of rye bread ends up in the pockets of the producer, however.
Aleksi Teivainen – HT
Source: Uusi Suomi