In recent decades (and in recent years even more quickly), fruit and vegetable producers have responded to the demands and concerns of the market by introducing new varieties and betting on biological control and organic production. We meet the demanding certification requirements and standards imposed by commercial distributors and we will continue to do so in the future. It is imperative. We have undertaken a "green revolution" in a short time, with responsibility and with much effort.
However, commercial distributors (our main customers) continue to put a lot of pressure on the prices at origin. These are not set by taking the production costs into account, but by reducing margins from the sale price to the public, which means that prices often stay below the grower's costs. This makes the future sustainability of our profession very difficult, generating also a great economic uncertainty in the sector as a whole. In fact, there are already big changes underway in the productive model for fruit and vegetables that respond to the scarce margins for the first link in the chain (when there is actually any profit) and which big companies and big investors profit from; firms that occasionally have their capital outside the sector, as opposed to the family model of agriculture.
Are we doing anything to correct this situation?
The administrations, and much of the sector, usually mention a commercial organization at origin as the most appropriate solution. At COAG, we believe that this direction is the best: concentration at origin to deal with the concentration of buyers and thus move forward in the value chain. We cannot resign ourselves to the idea that no matter how much we concentrate, they are going to be even more so. Our cooperatives and businesses must grow and we must stop trampling on ourselves.
But we must go further. EU regulations on fruits and vegetables offer possibilities that we are not taking advantage of. The Associations of Fruit and Vegetable Producers Organizations (AOP) can jointly devise the planning, organization, exchange of information and the marketing of the production, counting also with crisis management mechanisms; for example, product withdrawals funded through operational programs. The regulation allows for joint decisions to be made to improve the marketing and to tackle price crisis situations, without breaking with the competition rules.
It is time for us to assume our own responsibility. Everyone must undertake what they can do and know how to do. For our part, we will not stop trying to persuade producers to join producer organizations so that the marketing of horticultural products can be improved and so that we can defend ourselves better in a market dominated by the large European distributors. We, as producers, must become aware of our strength if we stand together. We are a strategic sector that cannot make war on an individual basis.
But, at the same time, the sector devoted to marketing at origin needs to implement all the systems available to it at the single CMO in order to defend the prices at origin and be able to manage price crises in a joint and coordinated way. It is incredible and unfortunate that, for certain products, we have a quota well above 50% during certain periods of the marketing campaign, and yet we fail to defend our prices. We have instruments and the need for collaboration is imperative. Inaction and lack of adaptation to the market will only lead to the disappearance of our model as we know it.