PRACTICAL PROBLEMS OF HARMONIZING MONITORING MARKET TOOLS: SOME PROPOSALS FOR NEXT STEPS Roma 19/12/2012 Fabio Del Bravo ISMEA – Market’s Services Area

Loss of farmers bargaining power For 100 euros of families domestic spending in agricultural products (mainly fresh fruit and vegetables), only 20 euros go to the Agriculture branch and 73 euros is the marketing share (for transport and distribution); in addition, families spend 7 euros for imported agricultural products. Part of the farm share is used for buying inputs needed in the chain production process (7 euros), while 12 euros is the value added, needed to pay taxes and salaries, to cover capital consumption and for the farmers operating surplus.

The deep CAP changes

 Communication “Food prices in Europe” COM(2008) 821 final,  Communication “A better functioning food supply chain in Europe” COM(2009) final, from which was born, with Commission decision of 2010, the High Level Forum for a better functioning food supply chain  The constitution of the High Level Group on Milk that has led to the so called “Milk Package” Reg. CE 261/2012  Communication “The CAP towards 2020” COM(2010) 672 final The milestones that have led to the new paradigm

Main issues through which seems to be developing the new paradigm of CAP 1.The horizontal and vertical integration through producer organizations and interbranch organizations to enhance the structures and the relative market power and improve the bargaining position of the agricultural component of chain and simplify the relationships along the supply chain 2. Contractual relations, to arrive at a real contractual economy taking into account the peculiarities of the market 3. Risk management, which takes into account the changing climatic conditions but also the need to intervene in situations of contingent and localized market crisis 4. Market transparency, as backdrop to ensure the proper functioning of food chain and prevent the opacity can hide or encourage unlawful vantage points

An example of compromise between accuracy and reliability of data and ready availability: ISMEA’s agricultural costs monitoring tool

The prerequisites for data quality Data and information have to be developed by a trusted third party faced to the market participants. Different solutions are possible, but this third party has to : Not participate to the market Have a good knowledge of the relevant market and its players Ensure the security and confidentiality of individual information to have the confidence of stakeholders

Topics related to the comparability of data Product category Product presentation (packaging) Different step of exchange Frequency of price monitoring Taxes (VAT first of all) are considered? There is a bonuses and penalties system on quality level? Which is level of concentration of supply? Different timing of market production campaign

Further complications related to the extension of monitoring to the entire supply chain Different structure of the supply chain from country to country Different ways of processing and different final products The level of concentration of supply chains which, in some cases, makes it difficult a price collection without interfering with the right to privacy inherent trade policies and pricing of individual companies The cultural approach through which actors in the supply chain face the issue of transparency is reflected in the terms of participation in the project or not