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Where does the money go?

TIME WILL tell how much the new national food policy for Scotland can deliver.

It makes much of a new partnership approach between the major retailers, farmers and food processors – and if those commitments can be delivered, it will be a boost for the industry and for consumers who want to support the industry in Scotland.

In Brussels, there is also a focus on the food industry, but it may be too late in the day for real progress to be made.

The present commission is due to end in October, although that may be delayed until the future of the Lisbon treaty is resolved. This will change the shape of the commission and its powers. What happens depends on the referendum on the treaty being held in Ireland.

Much of the running on the food industry is being made by farm commissioner, Mariann Fischer Boel. She is due to step down from her post, although there is an outside chance she may remain in Brussels. There can be no question that she has been a popular and effective commissioner, and one reason is her ability to make complex issues simple.

Mrs Fischer Boel is committed to improving labelling so that farmers can gain from the higher standard of European food, by highlighting its advantages to consumers. She is also committed to finding out why retailers fare so well, when farmers are doing so badly across Europe. She began raising this issue last year, with what was a very simple argument. She said the price of food had rocketed in 2008 because of the global increase in grain prices. This she accepted, but she challenged retailers to explain why when that boom was over she was still paying the same price for bread in Brussels.

She has returned to that theme on a number of occasions, most recently when defending what the commission as doing to support the dairy market through intervention and export subsidies. She added that, if farmers were unhappy, they should focus on the retailers, and their tactics of driving down prices. She said that last year when milk and grain prices were at record levels, the price of food increased by 17%. Since then, she said, it had only fallen by 2%, while the price farmers are paid for milk had halved in some member states.

The commissioner has already asked for two studies to look at what happens to the consumers' euro or pound spent on two products – pig meat and dairy produce. She wants to know where along the food chain that goes. It is clear she believes too large a share is staying with the retailers, as a result of the pressure they put on suppliers. These studies have been welcomed, not least because farmers and food processors believe there is no real understanding of the pressure they face from the major retailers.

However they know the retailers are adept at avoiding these issues and delaying the publication of similar reports. They also know it is almost certain Mrs Fischer Boel will go, and that there is no guarantee a new commissioner will run with this issue.

However, the MEPs who make up the new agriculture committee of the parliament have a golden opportunity to please both farmers and consumers by making sure this investigation remains high on the Brussels agenda. Beyond that, the challenge is to make something happen when the results are known. The commission cannot impose price controls across Europe, or indeed interfere with issues that are the responsibility of national governments. However, given that many retailers operate across the EU, the commission does have a role to play in ensuring that competition works as it should, and that farmers and food processors are not the losers in a food chain where the division of power favours retailers.

In practical terms, the commission could create some form of trans-European retail ombudsman, but the biggest thing it could deliver would be regular information on what happens to those consumer euro and pounds. The industry could then use this as it sees fit to let consumers know who gains and who loses when they shop. It was the 16th century when Francis Bacon said ‘knowledge is power' but that applies as much today as then – and armed with the knowledge of what really happens in the food chain, farmers and processors could use that information to get consumers onto their side.

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