FOOD PRICE VOLATILITY – 08 NOVEMBER

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FOOD PRICE VOLATILITY - 08 NOVEMBER
08 Nov 2016

FOOD PRICE VOLATILITY – 08 NOVEMBER

Brussels Daily

Food price volatility: Agriculture MEPs call for new EU risk management tools

To help farmers to cope with volatile prices, the EU must develop new risk and crisis management tools and strengthen their bargaining position in the food supply chain, says a non-legislative resolution voted in the Agriculture Committee on Tuesday. The supply chain should be made more transparent and the EU budget more flexible, so that funds can be deployed faster to tackle crises, add MEPs.
“I am really happy with the result of the vote. We are paving the way for the upcoming Common Agricultural Policy. The long-term aims of the CAP must be to ensure fair standards of living for the agricultural community, stabilise markets and guarantee viable food production. That’s why we have to push for a better organisational capability in various sectors and to strengthen the contractual systems for farmers, processors, and distributors at the same time”, said rapporteur Angélique Delahaye (EPP, FR). Her resolution was adopted by 29 votes in favour to 11 against, with three abstentions
New tools to fight price volatility…

The current Common Agricultural Policy lacks effective tools to address growing market volatility and to help farmers cope with price changes, says the resolution. Existing risk management tools, such as mutual funds, income stabilisation and insurance are implemented slowly, unevenly and are poorly funded, it adds.

The EU must therefore develop new climate, health and economic risk management tools, as well using existing ones to the full, to safeguard the EU’s food autonomy, ensure competitive and sustainable farming on the continent and encourage new entrants, MEPs say. These new tools should be fairer, more efficient and responsive, but also affordable for farmers and properly funded, they add.
…and tackle crises

The EU Commission should develop complementary public and private sector tools for crisis prevention and management, along with tailored and binding early-warning systems, and study ways to prevent and combat price volatility crises through countercyclical aids, says the committee. MEPs also insist that the so-called “crisis reserve” should be kept outside the EU budget, to make it more flexible.

Farmers must be better informed about ways to make their holdings more competitive and on options available to them when it comes to risk management, market data and volatility, MEPs say. They call on the EU Commission and member states to organise awareness-raising campaigns and adapt their training programmes to this end.
Boosting farmers’ bargaining power

The resolution calls on the Commission to align EU competition policy with the specific needs of the agricultural sector and boost farmers’ negotiating power in the food supply chain by introducing standard, transparent, balanced and collectively negotiated contracts laying down inter alia prices for products and payment periods. The size of a producer organisation representing farmers in collective negotiations should ideally correspond to that of its negotiating partner, MEPs say.
Enhancing supply chain transparency

Information on prices and costs must be made timelier and easier to access for all supply chain stakeholders, MEPs insist. They call for an EU-wide electronic map providing real-time information on the availability of agricultural products, EU agricultural price observatories covering the entire chain from producer price to final retail price, and sufficient funding to enable observatories to make recommendations, too.
Next steps

The text approved by the Agriculture Committee still needs to be scrutinised by the full House, probably at its 12-15 December plenary session in Strasbourg. It should then feed into the work of the Agriculture Market Task Force, an expert group set up by the Commission to suggest ways to improve functioning of agricultural markets. In the longer term, it should also form a basis for deliberations about the next CAP reform.

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