Wednesday, June 19, 2019
Home Business Will farmers be rolled in flour despite the law?

Will farmers be rolled in flour despite the law?

A macaroon distributed during a demonstration of peasants in the Sarthe, in December 2018. – GILE Michel / SIPA

  • Trade negotiations oppose distributors' buying centers in the face of agro-food companies and cooperatives.
  • They intervene after the vote of the EgAlim law which must revalue the income of the farmers.
  • Some fear that this goal may not be achieved.

With the law from the General States of Food (EgAlim), everything had to change. The executive had promised long interviews that the text would finally allow farmers to better live their work by earning a decent income. Except that today, several actors consider that this idyllic scenario is far from being realized.

The month of February is crucial: during this period, agri-food manufacturers (who buy farmers' products) negotiate the prices of the year with central purchasing departments of the mass market (Leclerc, System U, Crossroads…). These negotiations are very important because they condition the producers' incomes. For example, if mass retailers agree to pay more, manufacturers can reduce this margin to farmers.

"Milk is the tree that hides the forest"

According to Ania, the national association of food industries, the reality is very different. "Just 15 days from the end of trade negotiations, the terrible report is needed (…) nothing has changed," she warns in a statement released Wednesday. "Retail is in a dogmatic position and is asking us to lower our prices," says Valérie Weil Lancry, legal director in charge of trade negotiations at Ania. It's hard to pay producers better when you're not making money. "On the side of supermarkets, the discourse is very different:" The discussions between E. Leclerc and its suppliers have started rather well, wrote Michel-Edouard Leclerc
on his blog end of january (…) it is useless to [nous] to make a bad trial in advance ".

To try to see more clearly, a meeting with retail, industry, and agricultural unions should take place this Wednesday in the presence of Bruno Le Maire and Didier Guillaume. Interviewed by RTL, the Minister of Agriculture was rather optimistic: "The current trade negotiations, thanks to the Food Law, mean that prices are being raised for farmers, especially for milk" . Indeed, many agreements have already been signed to revalue the prices paid to producers in this sector.

But some fear that it is only a fire of straw. "Milk is the tree that hides the forest. There is a bundle of channels, in cereals, fruits and vegetables or in meat, where nothing has happened "explained last week Richard Panquiault, general director of the Ilec (representing the big brands), in front of the senators .

Runoff … to the consumer

For Olivier Dauvers, a retail specialist, this blockage is not surprising. "The level of competition among distributors is so high that they do everything to keep their customers," he says. So the margin gain allowed by measures such as raising the resale loss threshold (PRS) or the framing of promotions on food will go into the pockets of consumers, to the detriment of farmers.

In fact, this is reflected in supermarkets by "price reductions on private label brands (MDD), promotions on non-food shelves (hygiene, drugstore, etc.) or new loyalty programs" continues Olivier Dauvers.

An unbalanced law?

"We're going to ask major retailers to behave responsibly," says Valérie Weil Lancry. We also want stronger controls and dissuasive sanctions against those who do not respect the law. On Monday, Didier Guillaume promised to solicit the mediator of the trade negotiations and to carry out at the same time controls of the DGCCRF "in the stores".

Simple announcement effect? For Dominique Amirault, president of the federation of companies and entrepreneurs in France (FEEF), which represents SME suppliers of large retailers, the law does not address a fundamental problem: the imbalance "between an upstream atomized", with thousands of farmers and SMEs in the agri-food industry, "and an extremely concentrated downstream", with five purchasing centers for mass retailers. While waiting for the balance of power to be corrected, farmers are still likely to leave the (almost) empty hands of these negotiations.

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