Europe: ECVC puts forth concrete suggestions to guarantee fair prices to peasant farmers

In a press release issued on 27th February, the European Coordination Via Campesina demanded an obligation at the EU level to ensure prices paid to farmers cover the costs of production, including a decent income for the work of farmers and agricultural workers and their social security contributions.

Here are the highlights;

ECVC firmly believes that the EU Unfair Trade Practice (UTP) directive (implemented in Spain) offers several pragmatic steps to guarantee fair prices for farmers’ products. It actually obliges each link of the food chain to cover its production costs, starting with producers. ECVC has demanded that this directive be taken up at the EU level in order to strengthen it.

Through the law, producers have the right to anonymously report anyone who purchases their produce at a price below their production costs, which they self-determine for their products on a case-by-case basis. It can result in hefty sanctions. During the first quarter of 2023, the Spanish government announced that 55 companies had been sanctioned, ECVC noted.

Another aspect of the directive is the Origin-Destination Price Index (Indice de precios origen-destino – IPOD) that is published every month to check the abuse of power and the imposition of prices below production costs by agro-industry and distributors. This index started off back in 2008 as an initiative of farmers and consumer organisations, and it illustrated the difference between prices paid to farmers and by consumers. This difference amounted to more than 500%, indicating that the greatest beneficiaries of market deregulation have been the strongest operators (generally large-scale distributors) and the most disadvantaged were peasant farmers and consumers.

ECVC also demanded that EU should ensure high level of public control and price transparency through instruments such as Food Information and Control Agency (FICA) that to carry out ex officio inspections of compliance and execution of contracts, on price abuses – and – The Chain Observatory, which is responsible for carrying out price and cost studies along the value chain of each agricultural and animal production.

Prices by law must cover production costs in each link of the chain, starting with the farmer and the cost must include a decent income for farmers and all agricultural workers.”, noted the press release.

Among other proposals, ECVC also demanded that the selling at a loss be prohibited. Farmers must be paid in a maximum of 30 days when they sell a perishable product and 60 days if products are processed. Sanctions must be significant if the above points are not complied with. Price observatories at national and European levels must provide net margin levels by brand and manufacturer. There must be transparency on commercial negotiation conditions.

Finally, this law will not be completely effective without addressing international trade, removing the WTO from agriculture and stopping free trade agreements. A new trade framework based on food sovereignty should be implemented to enable the relocation of agricultural production and prevent national production from competing with imports that maintain low prices. Furthermore these free trade agreements deepen the climate and biodiversity crises and damage food systems in Europe and the rest of the world.

To read the detailed press note, click here.