The European Parliament published last January 19 a Resolution on the on the farm input supply chain in which it calls on the Commission and Member States to improve the transparency of farm input prices and guarantee that competition rules apply and be enforced throughout the upstream and downstream food market chain; calls on the Commission to refine its analysis of the reasons behind extreme market fluctuations and seek greater clarity on the interactions between speculation and agricultural markets, as well as energy markets and food commodity prices; stresses that this should be part of the efforts to better regulate and increase transparency and the quality of information on financial markets at global and EU level, including in the upcoming review of the Markets in Financial Instruments Directive (MiFID) and the Market Abuse Directive (MAD); and calls on the Commission to better evaluate the impact of EU legislation on the sustainability and competitiveness of European agriculture; believes that, in particular, consideration should be given to the costs of complying with legislation and the impact that this has on the availability of inputs as well as on the prices of those inputs.
For years European farmers faced high volatility in agricultural commodity and farm input prices. Between 2000 and 2010 total input costs for EU farmers climbed on average by almost 40%, while farm gate prices increased on average by less than 25%, according to Eurostat; whereas the increase in input costs within that decade reached 60% for energy and lubricants, almost 80% for synthetic fertilisers and soil improvers, over 30% for animal feed, around 36% for machinery and other equipment, almost 30% for seeds and planting stock and nearly 13% for plant protection products, highlighting the need to facilitate access to cheaper inputs for farmers, particularly from the world market. Despite this, the higher food prices do not automatically translate into higher farm incomes, mainly due to the speed at which farm input costs increase and the growing divergence between producer and consumer prices. In addtion the consumer is currently also being disadvantaged in the sense that producers are unable to pass on the exponential rise in the cost of factors of production to the big retailers, who in their case pass that rise on to the consumer with their huge profit margins.
Thursday January 19, 2012/ European Parliament/ European Union.