RETAILERS ARE charging consumers up to five times the prices paid to farmers for basic foodstuffs, according to a new report published by the Irish Farmers Association (IFA).
A farmer gets just 20 per cent of the retail price of cheese, 33 per cent of the price of milk, and 36 per cent of the price of potatoes despite the fact that they bear the largest proportion of the costs involved, the report states.
Over the past 15 years, the farmer’s share of the retail price has declined significantly, the report says; from 51 per cent to 27 per cent for pig meat, for example, and from 60 per cent to 50 per cent for beef.
The report notes that many of the products surveyed require only minimal packaging with little or no processing, and normally spend no more than a few days on supermarket shelves.
While individual shares of prices for wholesalers and retailers are not broken down, the report says powerful retailers are in the strongest bargaining position within the food supply chain.
The IFA says a collapse in farm incomes has seriously jeopardised the ability of farmers to maintain output.
It claims aggressive competition for market share by retailers is undermining the price received by farmers to the point where the sustainability of family farm production is in jeopardy.
“The large retail groups in Ireland and across the EU through their buying power are forcing down the prices paid to food suppliers to totally unsustainable levels, yet their food businesses remain very profitable,” the report states.
If present trends continue, the food supply chain will break down and consumers will be exposed to price increases and volatility, it adds. According to the IFA, average farm incomes last year were just €13,000, with the average incomes of full-time farmers at €16,000.
“This collapse in farm incomes has seriously jeopardised the ability of farmers to maintain output levels and provide for their families,” said IFA president John Bryan.
“Primary producers, as the key providers of our food, are not getting fair play in the food supply chain and their viability is being seriously threatened.”
The IFA says a statutory code of practice is needed to ensure that retailers treat suppliers fairly and ban practices such as below-cost selling and arbitrary payments demanded by retailers, such as hello money and “pay-to-play” money.
It also wants the Government to appoint an independent supermarket ombudsman. It says it has no confidence in the body which will result from the proposed merger of the National Consumer Agency and the Competition Authority to fulfil this role.
“It is clear the Competition Authority, or any merged agency of which it forms part, would be totally unsuitable to implement properly a statutory code of practice or role of ombudsman given that the authority does not recognise the current problems in the food supply chain.”
The report says loopholes in labelling legislation which mislead consumers and short-change producers must also be remedied.