Fresh data shows decline in farmer share of consumer price for food

Alison Healy, Food and Farming Correspondent

The share of the supermarket price that European farmers receive for food has fallen from 31 per cent to 21 per cent over a 16-year period, according to figures from the European Commission.

The figures were supplied to Fine Gael MEP Maireád McGuinness who described the decline in farmers' share of the consumer price as "dramatic". She said the figures showed that the producer share dropped from 31 per cent in 1995 to 24 per cent in 2005 and to 21 per cent by 2011.

"The 2011 figures compiled by Eurostat show that farmers receive 21 per cent, the food industry gets 28 per cent and the remainder, 51 per cent, goes to food retail and food services," she said.

“Receiving slightly more than one-fifth of the price consumers pay for food is an insufficient share for those who provide the lion’s share of the input. Farmers invest the greatest effort and time of all stakeholders in the food chain and also carry the greatest risks, including weather impacts.”

She said it confirmed what had been suspected for some time and it was worrying to see that the trend was moving in the wrong direction.

“At the same time we are demanding that farmers invest in more sustainable food production systems sensitive to concerns about the environment and use of scarce national resources. These demands cannot be met by relentless pressure on producer prices and their margins.”

Ms McGuinness said the imbalance in power between producers and retailers and other layers of the food supply chain is an issue that must be urgently addressed.

“The powerful in the food chain are imposing conditions on the powerless in an unfair manner, leading to reduced margins, impossible specifications demand and poor returns for investment outlay.”

Her comments follow a commitment by EU commissioner for agriculture Phil Hogan on Tuesday to introduce legislation to clamp down on unfair practices by supermarkets.

He said he was looking at new models and new frameworks in legislative terms that would concentrate the minds of all parties in the food chain. He also cited one proposal to fine retailers up to 1 per cent of turnover for unfair practices.

Mr Hogan said an EU voluntary code of practice was clearly not working.