The price of the groceries we buy are the result of tough negotiations between large purchasers and farmers. But farmers very often feel taken advantage of by major retailers, claiming they are forced to undersell their products.
To ensure that farmers get their fair share, the EU Commission has made proposals to strengthen their bargaining power.
The Commission wants to better enforce existing rules penalising late payments, last-minute cancellations of orders for perishable goods and unilateral contract changes – as well as preventing commercial retaliation by powerful buyers.
The initiative aims to reward hard working farmers fairly. It was just such claims of unfairness which drove farmers onto the streets in protests across Europe last year. Many day-to-day grocery shoppers think they have a fair point.
There are roughly nine million farms in the EU, more than five million less than in 2005.
Almost two thirds of these farms are small operations less than 5 hectares in size. EU farms cover 157 million hectares of land for agricultural production in 2020, 38 % of the total land area of the EU.
These numbers show that small farms are a crucial part of Europe’s food supply chain. By contrast, the market is dominated by a few large companies on the buyers’ side.
Another major concern of European farmers is that their margins have been squeezed by the surging cost of inputs such as fertilisers and pesticides, which ultimately increases the cost of production.
Whether the latest initiative from Brussels helps them attain a stronger position within the food supply chain remains to be seen.
