Interview Marc Jansen
'Government risks disrupting market forces'
The supermarket industry is not afraid of the planning by Minister Carola Schouten (Agriculture, Nature and Food Quality). It wants to give farmers and horticulturists more power in the chain. On the other hand, the effectiveness of this new legislation is questioned. Marc Jansen, director at the Central Bureau for Food Trade (CBL), is also concerned that the market will be disrupted.
How does the CBL view the minister's plans, and what bottlenecks do you see in the chain?
"We think it is good that farmers and horticulturists organize their own market power and we also encourage that. If you cannot operate alone, for example because you are too small, then you have to make plans and look for allies. In fact, this has been happening for over 100 years, because most farmers are united in cooperatives."
"The omnibus scheme expands the possibilities for farmers to make mutual agreements, whereby the Netherlands Authority for Consumers and Markets (ACM) turns a blind eye. That is fine in itself, as long as this does not lead to monopolies. We must be careful that not one party the market determines. Market forces are the basis of a healthy economy. Competition makes chains and companies stronger and ultimately ensures the best products and highest quality. We do find it worrying that the government is putting forward more and more ideas that could disrupt that market."
New legislation must ensure that primary producers will soon be able to make agreements and act together against unfair trading practices. Is that right?
"We are also against unfair trade practices. Parties must be able to do business with each other and fulfill agreements in a normal way. What I do find objectionable is the complete one-sidedness of the new legislation. It suggests that farmers will benefit from this, but that is not the case." the question remains. The law will prohibit certain commercial practices and prescribe at a micro level what customers are no longer allowed to do. This will limit the freedom of contract, which will especially benefit large manufacturers."
Is it a good thing that Schouten has set up the Earning Capacity Taskforce to map out farmers' earning models?
"Actually, it is the other way around that the Dutch government is going to look at the business model of entrepreneurs. Normally there is a market, as an entrepreneur you respond to that and you make a price and therefore a revenue model. In our opinion, this is mainly an attempt by the government to enforce its policy and make the market pay for it."
"I myself am a member of the Taskforce's sounding board group, which also looks at all kinds of other preconditions, such as financing and permit processes. This is being mapped out and I am curious what will come of it. It is important that this is taken into account. that the Netherlands is an exporting country."
ACM must provide insight into the pricing of agricultural products via the agro-nutri monitor. What do you expect from this?
"This is the third time that ACM has done this. The past 2 investigations yielded a fairly consistent picture, and there were no parties that made excessive money. I do not expect this study to provide new insights. It would be good if the ACM does not make it too easy for itself Don't just take a close look at 'single products' such as eggs and peppers, but also look at a product such as tomato that is used in everything and has many different purchase and final prices. the dozens of ingredients of pizza."
How does the CBL view the organization of chains, such as Vion envisions for the pig sector, in which cooperation is based on long-term agreements?
"We call this 'dedicated supply chain', in which groups of farmers and supermarkets coordinate matters. I think it is good to think along with the end customer in this way. We are also in favor of long-term agreements. By setting demands on each other, we can meet the demand from society and it also offers certainty, not only for growers, but also for supermarkets who want to be sure that the supplier can still deliver tomorrow and 1 year from now."
Does the CBL recognize itself in the noise that supermarkets do not pay for a sustainable product that takes animal welfare, climate and biodiversity into account?
"We do not recognize ourselves in that at all. Take the labels Beter Leven and Kip van Morgen and organic products, they simply pay for it. If the additional price does not reach the farmer, he would go bankrupt. I think it is a pity that these noises form a barrier for growers to switch. With the new plans, the minister puts the farmer and supermarket in direct opposition to each other, while in our opinion there is more and more cooperation and satisfaction."
What is the long-term effect of Minister Schouten's plans?
"About 80% of Dutch agricultural production is destined for export. Agreements made now, however, only apply to production for supermarkets in the Netherlands. I think that in the coming years there will be an even tougher dividing line between the farmers who the Dutch supermarket (cost plus) and producers who are dependent on the capricious world market."
Jeanette Pennings
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.