The European Commission has launched the call for applications for the establishment of the EU Agri-food Chain Observatory (AFCO).

The creation of this Observatory, which will analyze production costs, margins, and trade practices, was announced in mid-March as one of the measures to strengthen farmers' position in the food supply chain and enhance trust among all actors throughout the chain.

Its objective is to bring increased transparency on prices, cost structures, margin distribution, and value-added in the supply chain, while respecting confidentiality and competition rules.

Building trust among all stakeholders and public authorities is essential to ensure that all actors are fairly remunerated for their contributions and work in the agri-food supply chain.

The Observatory will bring together up to 80 members, representing national authorities responsible for agriculture, fisheries, and aquaculture or the food supply chain, as well as organizations representing stakeholders active in different stages of the chain - from farmers, input suppliers, the food industry, traders, to transport, logistics, retail, and consumers.

In the medium term, it is expected that the Observatory's activity will allow for the development of methodologies for assessing and monitoring cost structures and margin and value-added distribution along the food supply chain.

The existing agri-food data portal will be expanded to publish new relevant indicators, available to all online. This could include data on costs and margins at different stages of the food chain. This new observatory will complement the activities of existing market observatories for agriculture and fisheries.

Additionally, members will exchange information on trade practices that positively or negatively affect the smooth functioning of the supply chain. Case studies for certain products or sectors may also be shared.

The call for applications is open until May 13. Applying organizations must be registered in the Transparency Register to be appointed. The Observatory is expected to hold its first meeting in July 2024, chaired by the European Commission's Directorate-General for Agriculture.

The Observatory will meet at least twice a year in plenary, with additional ad-hoc meetings on specific topics, if necessary. In line with its transparency principles, all relevant documents (including agendas and minutes) will be published in the Expert Groups Register. The Observatory is established for an initial period of five years, renewable.

Strengthening farmers' position in the food supply chain is one of the key objectives of the CAP. There are already several measures in place at EU level to ensure more fairness and to protect farmers against unfair trading practices.

While the level of trust and cooperation among chain actors is increasing, the full implementation and application of available policy tools take time and need to be further done.

This is why the Commission presented to the Council and the European Parliament in March several short and medium-term action options. The proposal to establish an Observatory on production costs, margins, and trade practices was warmly welcomed by agriculture ministers at the Council meeting on March 26, 2024.

Heads of state also urged the Commission to continue efforts to strengthen farmers' position in the food supply chain at the latest European Council meeting. (Photo: Dreamstime)