Commission starts setting up the Agriculture and Food Chain Observatory

The European Commission has launched the call for applications to set up the EU agri-food chain Observatory (AFCO). The creation of this Observatory that will look at production costs, margins and trading practices was announced mid-March 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.

Its objective is to bring increased transparency on prices, structure of costs and distribution of margins and added value in the supply chain, while respecting confidentiality and competition rules. Building trust between all stakeholders and public authorities is essential to ensure all actors are fairly remunerated for their contributions and work in the agri food supply chain.

The Observatory will gather up to 80 members, representing national authorities in charge of agriculture, fisheries and aquaculture or the food supply chain, as well as organisations representing stakeholders active in various stages of the chain – from farmers, input providers, food industry, traders, to transport, logistics, retail and consumers. In the medium term, it is expected that the work of the Observatory will allow to develop methodologies to assess and monitor the structure of costs and the distribution of margins and value added along the food supply chain. The existing agri-food data portal will be expanded to publish new relevant indicators, available to all online. This could include data on costs and margins at the different stages of the food chain. This new observatory will complement the work of the existing market observatories for agriculture and fisheries.

Members will also exchange information about trading practices affecting positively or negatively the smooth functioning of the supply chain. Case studies for certain products or sectors could also be shared.

The call for applications is open until 13 May. Organisations who apply must be registered in the Transparency Register to be appointed. The Observatory is expected to hold its first meeting in July 2024, chaired by the Directorate General of Agriculture of the European Commission. The Observatory will meet at least twice per year in plenary, with additional ad hoc meetings on specific topics to be organised too, if need be. In line with its transparency principles, all relevant documents (including the agenda and the minutes) will be published on the Register of expert groups. The Observatory is established for an initial duration of five years, renewable.

Background

Reinforcing the position of farmers in the food supply chain is one of the key objectives of the CAP. There are already several measures in place at EU level to ensure more fairness and protect farmers against unfair trading practices. While the degree of trust and cooperation between actors in the chain is increasing, the full implementation and enforcement of the available policy tools take time, and more needs to be done. This is why the Commission presented to the Council and the European Parliament in March several options for actions that could be taken forward in the short and medium term. The proposal to set up an Observatory on production costs, margins and trading practices was warmly welcomed by agriculture ministers in the Council meeting of 26 March 2024. Heads of State also called on the Commission to keep up the work to strengthen the position of farmers in the food supply chain in the latest European Council meeting.