EurActiv.com Correspondent's Choice

This story about agriculture market subsidies was published by EurActiv on 22nd September 2010.

As farmers receive an ever smaller share of their income from sales of food products, making them dependent on subsidies, EU politicians suggest strengthening their bargaining power in the food supply chain and increasing their income from the market.

Although prices of agricultural produce have tended to fall in recent years, threatening the livelihoods of European farmers, consumers have mostly failed to reap the benefits of cheaper food.

In a study, the European Commission notes that agricultural ingredients represent only 5% of the final cost of a loaf of bread, for instance.

Meanwhile, the final shelf price of foodstuffs is increasingly influenced by other costs such as energy, transport, processing and labour.

According to EU farmer’s lobby Copa-Cogeca, unfavourable market conditions and rising input costs have led farmers’ average incomes to drop to about half the earnings in other economic sectors over the last decade.

The EU executive has expressed concern about the situation and is investigating growing concentration in the food processing and retail sectors to see whether potential abuses by dominant players on the market are affecting farming incomes.

Brussels has also identified “weak transparency and price transmission across the food chain” as problems to be addressed in its November paper on the post-2013 Common Agricultural Policy (CAP).

Earlier this month, the European Parliament called on the EU executive to take action to ensure that the “abuse of market power is redressed”.

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