The EU agri-food chain Observatory starts working to restore trust and improve transparency in the food chain

The EU agri-food chain Observatory (AFCO) held its first meeting on Wednesday 17 July. Its objective is to better understand the functioning of the supply chain and bring increased transparency on prices, structure of costs and distribution of margins and added value, while respecting confidentiality and competition rules. The launch of this Observatory was first announced in March 2024 as one of the measures to strengthen the position of farmers in the food supply chain and reinforce the trust between all actors throughout the chain.

Commissioner for agriculture, Janusz Wojciechowski, opened the Observatory’s inaugural meeting by recalling the objectives of the group and the work to come. Exchanging information and taking stock of the situation in the food supply chain and, in the medium-term, developing methodologies to assess and monitor the structure of costs and the distribution of margins and added value along the chain are among the Observatory’s main tasks. During this first meeting, an initial mapping of data available on prices, costs and added value is presented and members have a first exchange of views on the situation in the agri-food supply chain in the EU and in their country.

Members of the Observatory are representatives from the 27 EU countries’ national authorities as well as from 48 stakeholder organisations operating within the agri-food supply chain. These range from farmers, input providers, food industry, traders, to transport, logistics, retail and consumers. The European Parliament, the Committee of the Regions and the European Economic and Social Committee have an observer status. The list of the AFCO members and observers is available in the Register of Commission expert groups.

The second plenary meeting will be held in Autumn of this year.

Background

Strengthening the position of farmers in the food supply chain is one of the key objectives of the Common Agricultural Policy. There are already several measures in place at EU level to ensure more fairness and protect farmers against unfair trading practices. These include the Directive on unfair trading practices that protects farmers and smaller suppliers against 16 unfair trading practices in the food chain, as well as provisions in the Common Market Regulation (CMO) Regulation supporting farmer cooperation and allowing some exclusions from competition rules laid down.

These last few years, the surge in input costs, combined with high inflation, has further destabilised the distribution of value added along the chain and has significantly increased the perceived degree of uncertainty in which EU farmers operate. The degree of trust and cooperation between actors in the food supply chain needs to be reinforced. In March 2024, the Commission announced several measures for the short and medium term to achieve that objective. The setting up of the Observatory was an immediate deliverable. By gathering representatives of all sectors and representatives from Member States, it aims to build trust and establish a common diagnosis of the state of play along the chain.

Quote

Commissioner Wojciechowski said:

In the past months, farmers across Europe raised a number of concerns about the challenges they face. One of the main issues to emerge was a sense of discontent in the functioning of the food supply chain, expressed by farmers who feel that their work is not sufficiently rewarded. It is precisely this lack of trust and confidence that the Commission wishes to address by establishing the EU Agri-Food Chain Observatory. With this new Observatory, we gather operators from across the supply chain around the same table, alongside the Commission and public authorities. Our aims are to exchange reliable information in a trustworthy manner; to deliver increased transparency on costs and margins; and to share expertise, identifying trading practices and contractual arrangements that may have positive or negative impacts on the functioning of the chain. Ultimately, the Observatory will aim to reinforce trust throughout the supply chain and thereby contribute to our overall goal: that every actor – from farm to fork – is fairly rewarded for their work.