Hogan objects to rising fertiliser costs while crude oil prices keep falling

EU farm commissioner, Phil Hogan, has vowed to tackle the problems in the food supply chain, delivering a better deal for farmers in the process.

Addressing the Irish Farmers Association on its 60th anniversary today, Mr Hogan (pictured) said he was determined to tackle the problems of a food supply chain which was currently causing farmers to pay too much for inputs such as fertiliser, even at a time of falling oil and gas prices.

“How is it,” he asked,” that even though crude oil prices have fallen by 45% since last June, and gas is doing the same, I see that fertiliser prices are going up by 7% in 2015?”

All players in the food chain needed to realise that producers must get a decent return, he added, announcing that he would be meeting soon with the EU’s competition commissioner, Margrethe Vestager, to “investigate any breaches of competition law”.

“It is clearly obvious that highly concentrated input suppliers have real pricing power and are using that power,” he said. “It looks to me that the margins being extracted are far higher than can be justified particularly considering the current benign backdrop on energy prices.”

As such, he argued, the present EU Supply Chain Initiative was not covering “all the relevant actors”.

“I will not hesitate to call for changes so that farmers are not put out of business arising from the squeeze on their margin of profitability,” he said.

“All players in the food chain should realise that it is imperative that producers get a decent return for their raw material. Without producers none of the downstream businesses would even exist.”

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