Realistic prices should underpin food supply chain, says EU report

Its report, Food Prices in Europe​, concluded: “Anticipation of low prices in the production chain ultimately restricts the investment and innovation capacity of agro-food suppliers as well as consumer choice. The Commission must take these factors and their side effects into account in the medium- and long-term and abandon its exclusive focus on the immediate benefits of low prices​.”

Focusing on achieving low food prices would keep the food chain on the wrong track, as it is today, continues the report. Instead, it is essential that the price/value relationship remains at a realistic level.

Rock bottom prices​

Rather than rock bottom food prices, consumers benefit the most from realistic prices which best ensure the quality, quantity and service they have come to expect.

But the report adds that a strategy designed to reduce the volatility of prices is appropriate because it would allow greater reliability and predictability in the food supply chain.

Although it’s impossible to restrict investments in basic food commodities, which usually take place via stock exchanges, the report urges that a means must be found of mitigating the effects of factors which do not reflect actual demand. That’s because they disrupt significantly supply chains of agricultural products.

Moving on to consider the question of food safety, the report highlights the importance of food self sufficiency in Europe, underpinned by well-funded researched research and development. “For this to happen​ (European food safety), a high degree of self-sufficiency is necessary. In turn, sustainable agriculture can only be ensured by means of research and development, innovation, and technological development, and for this to happen, CAP​ (Common Agricultural Policy) resources are essential.”​

While acknowledging the EU’s responsibilities to food supplies to developing countries, the report warns that its main task is to ensure supplies to its citizens of a full range of safe foodstuffs and that should be achieved by reducing dependence on world markets, and preserving autonomy.

Achieving this objective is vital because, says the report: “Food is the main force which holds society together; it is of strategic importance, and enjoys considerable consumer trust​.”

For those reasons, production conditions must be organised in such a way so as not to threaten long-term sustainability.

Firmer Footing​

The resources necessary to move food production onto a firmer footing should be organised to encourage adaptation to market conditions. And policy-makers should make it “obligatory to provide information and cooperate, and taking rural development issues into detailed consideration​.”

Meanwhile, the report recommends that background analyses should be carried out, followed by a precise action plan drawn up, and competences and responsibilities defined.

The report was written by Jozsef Kapuvári, president, Trade Union Federation of Food Industry Workers (EDOSZ).

A full copy can be found online here​.