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ACM launches study into price-forming mechanism in food supply chain

At the request of the Minister of Agriculture, Nature and Food Quality (LNV), the Netherlands Authority for Consumers and Markets (ACM) has launched the monitor on the price-forming mechanism in the food supply chain. It takes many steps for our food to get from farm to fork. For each of these steps, the monitor will show what price that undertakings have paid when buying their products, and what the selling price was. The monitor will also describe the differences in price breakdowns between several non-organic products and their organic varieties. Six products will be initially covered: onions, white cabbage/sauerkraut, tomatoes, pears, milk, and pork. This is a cross section of the agricultural products grown and consumed in the Netherlands. Next to the price-forming mechanism, the monitor will also look into the trends and developments on the agricultural markets.

Wageningen Economic Research will collect the data on behalf of ACM. Each year, ACM publishes the results. The monitor will be carried out for at least two years. The first report will be published in mid-2020. Market participants will be contacted and asked to take part in the study.

What information will the food-supply chain monitor collect?

The monitor will look at the purchasing and selling prices in each step of the food supply chain. More specifically, the study includes questions such as: how much do onion packers pay farmers for a kilo of onions? Is there a difference with organically grown onions? How much do they charge for packing, and for what price do they sell, for example, the packed onions to intermediaries? Questions such as these will make it clear how each euro that consumers spend on food is distributed over the different steps in the chain.

Why conduct a monitor?

Many farmers and growers believe they have little influence over the prices that they can charge for their products. Some producers say that the requirements with regard to animal welfare and sustainability are raised, while their revenues do not increase commensurately. Minister of Agriculture, Nature and Food Quality Carla Schouten wishes to strengthen the position of farmers in the food supply chain, and make sure that nothing will stand in the way of farmers and growers to make their production processes more sustainable. ACM’s monitor will provide insight into the prices in the various steps of the food supply chain and into the differences between organic and non-organic varieties, so the public debate can be held on the basis of facts. The monitor will also look into mechanisms underpinning the price-forming process, so that the differences between, for example, undertakings, product varieties and seasons can be explained better.