ECVC recommendations on Agriculture and Food Chain Observatory

Full text of the ECVC letter sent to the head of unit E in DG AGRI, to express ECVC’s recommendations to the DG AGRI Unit E on the informal European Commission expert group on Agriculture and Food Chain Observatory.

European Coordination Via Campesina congratulates the Commission for the setting up of an EU Agriculture and Food Chain Observatory. This launch offers a concrete response to the need to ensure transparency on prices, costs and margins and will provide different actors of the chain and policy makers with a solid common base of knowledge, thus ensuring they can make informed political decisions. It is also a significant step towards ensuring economic justice along the food chain, from farmers to consumers.

ECVC will be participating actively in the Observatory but wishes to ensure that its objectives and conditions will allow the mechanism to be fully effective.

With this letter, ECVC takes the opportunity to request a meeting with you, Mr Bascou, in order discuss the modalities and implementation of these recommendations.

ECVC recommends the following :

1. Data Collection:

• The Commission must equip itself with the means to obtain and analyse information on prices, costs and margins. The commission must provide broad and in-depth information that serves as the basis and official source for the decisions and work of the Observatory. This information must be gathered by public institutions, or at least managed and controlled by them, independently of private companies, to ensure the highest possible level of transparency. Experts can provide ad hoc, additional or specific information, but must not be expected to collect and provide all the data.
• The data collected must not be declared data but rather real data from contracts, including for input suppliers.

2. Role of the Observatory:

• The Observatory is a public tool which must serve to analyse and detect unwanted behaviour in the market. This will inform subsequent decision-making in public policy actions as well as by the agents of the chain. The Observatory must not only observe but also issue reports, studies and indexes which will allow, for example, references for contracts to be established.
• The Observatory should commission analysis of the main abusive practices committed, as well as on the market shares of the main companies in each link of the chain, including input supplier companies.
• The Observatory must be granted the mandate to control stock levels, at least on some strategic products (cereals, milk powder, etc.)
  Role of the experts:
• The role of Observatory Experts must be to: (a) Check the mechanisms and transparency of data acquisition, (b)Decide on the reports and analysis that must be carried out based on the data provided (c) Participate in this analysis, and Discuss the subsequent recommendations to be made.

3. Reflection on this Price Observatory with current Market Observatories:

• An umbrella Observatory that includes sectoral/product Observatories will make sense as long as it is well coordinated. Sectoral observatories have been operating at EU level for some time and should have greater capacity to develop the aforementioned tools: studies on costs, prices and margins, production cost indices, etc…

4. Consideration on functioning:

• The degree of transparency must be the same for all points in the chain. Often, a lot of information is published relating to the first link and transparency decreases further along the chain. For example, weekly prices are published at origin, but price information is not available at the outlet of the industries or on sale to the public with the same frequency or detail.
• It is important that the Observatory also takes into account imports and exports: it is necessary to have as up-to-date information as possible on the quantities, qualities, prices, and tariff rates paid on imports, especially regarding sensitive productions.
• Information on the prices, costs and margins of the input supply companies must also be provided. The functioning of supplier markets currently requires more transparency and is key to the profitability of people in the producing sector.