00:00Shop prices for groceries emerge from tough negotiations between farmers and large buyers.
00:20Very often, farmers feel taken advantage of by the food industry and retailers, claiming
00:25they're forced to undersell their products.
00:28That's why the EU Commission has made proposals to strengthen their bargaining power.
00:33This includes the enforcement of the Unfair Trading Practices Directive, which was adopted
00:38five years ago but still not fully implemented.
00:41Among those practices are late payments, short notice cancellations of perishable products
00:47and unilateral contract changes, as well as commercial retaliation by the buyer.
00:52The initiative aims to reward hardworking farmers fairly.
00:57It was claims of unfairness which led to huge farmers' protests across Europe last year.
01:03But do day-to-day grocery shoppers think they have a fair point?
01:27Let's bring in Greg Lorry, who covers agriculture policy for Euronews.
01:45Good to see you, Greg.
01:46Good to see you, Stefano.
01:48So these imbalances between the farmers and the buyers of their products, is this a new
01:53thing?
01:54Yes, we have talked about it a lot here in Brussels and in the European institutions.
01:59You remember last year, during the first semester of 2024, farmers from all around Europe gathered
02:06for demonstrations in Brussels, but also in member states.
02:09They were complaining about the surging prices of inputs like fertilizers or products to
02:15protect their plants.
02:16So it's not new.
02:18They complain.
02:19They complain also about climate constraints.
02:23So in the first step, the Commission and the EU proposed to loosen the green condition
02:30to get CIP funding, to cut the red tape regarding funding for farmers.
02:36Another proposal by the Commission is to protect the farmers from cost fluctuations.
02:41How could that be tackled?
02:43There are different proposals.
02:44One is written contracts.
02:47The buyers will clearly outline different terms like prices, quantity, delivery timelines,
02:55in order to get a picture of the market situation.
02:59There's also this idea for member states to establish a mediation mechanism to resolve
03:07disputes between buyers and farmers.
03:10In general, the Commission wants a more equitable food policy.
03:15What are the guiding principles here?
03:18The guidelines is to bring more transparency, foster dialogue between all actors, to foster
03:26competitiveness, transparency on the whole value chain.
03:34These conclusions are the result of seven-month negotiations between several stakeholders,
03:42agricultural sector, academia, rural communities, and civil society.
03:49And these conclusions will shape the Commission's vision.
03:54OK, Greg.
03:55Thanks a lot.
03:56There are roughly 9 million farms in the EU, more than 5 million less than in 2005.
04:02Almost two-thirds of these farms were small operations with less than 5 hectares in size.
04:08EU farms used 157 million hectares of land for agricultural production in 2020, 38% of
04:16the total land area of the EU.
04:19These numbers show that the food supply chain in Europe is based on rather small enterprises
04:24on the farmer side.
04:26By contrast, there are a few large companies acting, dominating the market as buyers.
04:33So how does that imbalance shape a small farmer's life?
04:40Well, what is to be taken into account in the first place is the wide diversity and
04:47the wide complexity in the whole agri-food chain.
04:50You have very large farms that are usually very well on the market.
04:56A number of them are also export-driven.
04:59And they are usually quite profitable.
05:01On the other hand, you have a multitude of very fragmented, very small farms that are
05:06struggling and those are the ones that need most attention or most help.
05:13By nature, the farmer is weaker in this bargain power, has always been and will be.
05:21It's a little bit about the size of the company, but it's also the matter of our products that
05:27are often quite fresh and seasonal.
05:30We got the UTP directive, which we welcomed, and we also now welcome the review of that.
05:43A lot of attention has been placed on unfair trading practices legislations, but one needs
05:49to understand that those laws, they state in contracts what a farmer and a buyer can
05:58agree, and what they cannot.
06:01What we should say is that those laws are not a silver bullet.
06:05You really need to look at the whole agri-food ecosystem and strengthening the players in
06:12that ecosystem in the first place.
06:14It's not only justified, it's necessary.
06:17One way of strengthening the farmer in the food chain is by working in cooperatives or
06:23in producer organizations.
06:25We are very much looking forward to the continued work of these proposals that have come from
06:31the Commission now.
06:37Retailers in particular, they want to have their shelves full for consumers to come and
06:43visit them, and they want to have choice, and they want to have good prices.
06:47For that, you need to have well-functioning supply chains.
06:52When conflicts occur, then you have mechanisms for the state or the government to intervene,
06:59but these systems should be there and used only in the last resort, between when the
07:07conflict is too bad.
07:08I think it's important that there are some sort of ombudsman or some organization that
07:15can mediate this.
07:17We also see that different countries have adopted this legislation in different ways.
07:24That's also a problem, so I think it's important that the whole Europe takes responsibility
07:29for that.
07:33A major concern of European farmers is that their margins have been eroded by surging
07:39prices of inputs, such as fertilizers and plant protection products, that ultimately
07:46increase their production costs.
07:48Whether the latest initiative from Brussels helps them attain a stronger position within
07:53the food supply chain remains to be seen.
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