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Farmers, retailers sign 'fair price' agreement for produce
November 14, 2017 / 6:11 PM / 5 days ago

Farmers, retailers sign 'fair price' agreement for produce

PARIS (Reuters) - French farmers, food producers and retailers signed an agreement on Tuesday to improve relationships throughout the food chain, notably by ensuring that farmers be paid a fair price for their output, they said.

The so-called charter of commitment is part of a wider field-to-fork review promised by President Emmanuel Macron to appease farmers, an important constituency in French politics, who have long complained of being hit by squeezed margins and a retail price war.

Most of the main retailers operating in France signed the charter at the French agriculture ministry, notably Carrefour (CARR.PA), Casino (CASP.PA), Auchan [AUCH.UL] and unlisted Leclerc which had expressed reluctance in signing an agreement.

Other parties included French farm cooperatives, food producer groups, farm unions and industry representatives.

Macron announced last month some of the measures he would push for as part of a wider food bill. But a law is not expected until early next year, after the price negotiations in the food chain that have just kicked off in France.

One of the main measures agreed on Tuesday is that price fixing would start with producers, based on market prices and production costs which would be taken into account by manufacturers and suppliers and passed on to retailers.

“If a butter producer comes to us and tells us that milk prices have soared 30 percent we commit to pass on the increase,” an Auchan spokesman said.

“Will this mean a rise in prices for consumers? Not necessarily.”

Last year a third of farmers earned less than 350 euros ($403) a month, the Agricultural Mutual Assistance Association (MSA) said, a third of the net minimum wage.

Farm unions welcomed the agreement but stressed that there was still a need for a wider law to include measures promised by Macron such as minimum prices for food products and limiting promotions that tend to squeeze farmers.

“‘Good intentions’ alone cannot transform years of unbalanced relationships in terms trade negotiations,” said Coop de France, which brings together 2,600 farm cooperatives, calling on the government to take further measures for farmers.

Reporting by Sybille de La Hamaide, editing by David Evans

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