Many farmers sell foodstuffs to supermarkets at prices that do not cover their production costs. The INIfair initiative calls on German Farm Minister Özdemir to rework the Agricultural Organisations and Supply Chains Act so that fair payment from supermarkets and the food industry is guaranteed.

INIfair: Make fair prices in the agricultural supply chain legally binding now!

• Many farms are still forced to sell foodstuffs to retail corporations at prices that do not cover their production costs.
• The Agricultural Organisations and Supply Chains Act, which should limit the market influence of retail corporations, is clearly ineffective.
• This initiative calls on Agriculture Minister Özdemir to improve the law in order to push supermarkets and the food industry to finally pay adequate prices for foodstuffs.

A change in the agricultural sector could not be more urgently needed! The exploitation of people, animals and the environment due to unjust structures in global agriculture is ubiquitous. Even though food prices are currently on the rise for end consumers, many farmers producing this food in Germany and elsewhere are paid prices that do not even allow them to make a living, let alone engage in more environmentally friendly production. Mechanisms to ensure stable, cost-covering producer prices in the long term are sorely lacking. The climate crisis and the dramatic loss of biodiversity are some of the greatest threats to humankind. If we allow global greenhouse gas emissions from food production to rise further, we will be unable to meet the Paris Agreement goals. In fact, climate change is already threatening our natural vital resources, food sovereignty and our health. In this context, agriculture has a key role to play. On the one hand, it is significantly affected by the effects of climate change (e.g. increasing periods of drought). On the other, agriculture itself is not only a driver of climate change due to high emissions, it can also contribute to natural climate protection and undertake environmental measures to reduce greenhouse gas emissions. 

Climate and water protection as well as animal welfare in agriculture lead to costs, which many farms can barely afford as farmers are constantly under pressure to reduce costs. To date, however, profits from the sale of foodstuffs have mostly stayed in the hands of supermarkets, online traders and wholesalers, and the food industry. Despite consumer prices that are sometimes rising exponentially, these stakeholders exert enormous pressure along the entire food supply chain – and on the global supply chain as well.

The initiative calls on Federal Agriculture Minister Cem Özdemir and the members of the German federal parliament to:

• Set up an independent, autonomous ombudsman and price observatory as soon as possible

The ombudsman would, for the first time, document producer prices and production costs, as well as calculate margins for the food supply chain and fair prices. It should record and investigate reports of unfair prices and all other unfair trade practices – including those from the Global South.

• Categorise the payment of unfair prices as an unfair trade practice within the scope of the Agricultural Organisations and Supply Chains Act and prohibit it

The law should protect all stakeholders in the food supply chain – including smallholders and workers in the Global South – from all unfair trade practices and should apply to all stages of distribution. The evaluation of the law scheduled to take place this year is an opportunity to make these changes.

• Legally anchor the ban on purchasing below production cost along the entire food chain

Such a ban – like the law adopted in Spain in 2020 and in force since December 2021 – would lead to a paradigm shift, where ethical pricing and fair sharing of value creation from farmers or producers all the way to the supermarkets is encouraged. Producer prices and wages that ensure a decent living should not be treated as a bargaining chip.

• Legally anchor the need for all supply relations to be underpinned by a written contract

Every contract – with no exception for cooperatives – must include binding and specific terms and conditions for at least price, volume and duration for the goods in question. Like all other economic stakeholders, farmers should be able to calculate their costs and ask to be remunerated for them.

• Ensure that the costs associated with effective environmental and climate protection and animal welfare as well as respecting human and labour rights can be passed on along the entire food supply chain

To this aim, it is necessary to couple the ban on buying below production costs with quality criteria such as animal husbandry labelling, so that cost-covering producer price bonuses can be implemented. This should be complemented by transparent, reliable labelling of origin and region.

• Ensure that standard rates for basic income and minimum wages are increased in the event of higher food prices

Furthermore, the use of (organic) grass-fed foodstuffs from the region should be promoted in community catering.

You can read the full list of demands by INIFAIR here (in German).

Charlotte Gengenbach, campaigner, Arbeitsgemeinschaft bäuerliche Landwirtschaft (AbL)

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