Creation of AFCO is a win for ECVC farmer demands – but concrete and effective decisions are needed to ensure transparency and fair prices for farmers

This mechanism must be implemented with adequate conditions and objectives, to provide policy makers and different actors in the chain with a solid common base of knowledge, thus ensuring they can make informed political decisions that support the much-needed agroecological transition.

As ECVC outlined in a letter to DG AGRI Unit E before the AFCO launch, for the mechanism to be fully effective, the European Commission must ensure ambitious criteria are met regarding how the observatory data is collected and the role it and its experts will play.

Alvaro Areta, one of ECVC’s representative in the AFCO, explained “The new observatory has the potential to offer a concrete response to farmers’ demand for transparency on prices, but to do so it must have the capacity to act to regulate markets instead of only observing current malpractices or exacerbating the power imbalance of private industry actors.”

Concretely, the Commission must ensure it has the means to obtain and analyse information on prices, costs and margins, providing broad and in-depth information that serves as the official source and basis for the decisions and work of the observatory.

This information must ensure the highest possible level of transparency, allowing the observatory experts to make decisions on the reports and analysis that need to be carried out and participate in the analysis and development of recommendations. It must also issue reports, studies and indexes which will allow, for example, references for contracts to be established.

The observatory must analyse the main abusive practices committed, as well as the market shares of the main companies in each link of the chain, including input supplier companies, and must be granted the mandate to control stock levels, at least on some strategic products (such as cereals, milk powder, etc.). This power to act must also be reflected in other EU level sectoral observatories as good coordination between these observatories will be key to the AFCO functioning effectively and efficiently.

Aira Sevon, ECVC AFCO representative, also underlined the importance of ensuring access to up-to-date and detailed information, guaranteeing equal and comparative transparency at all points in the chain. “At present, for example, prices at origin are published weekly, but information on prices for industrial or retail outlets are not available with the same frequency or detail. There is less transparency the further along the chain you get, and some actors are taking enormous profit margins while farmers are struggling to survive”.

This lack of transparency and need for detailed information also applies to imports and exports, such as quantities, qualities, prices, and tariff rates, as well as information on the prices, costs and margins of input supply companies as this is key to the profitability of production sectors.

Read ECVC’s full recommendations on the observatory here.