Why to protect farmers’ incomes Macron wants a “European Egalim” law, modeled after the French one

Brussels – He spoke about it in person with the President of the European Commission, Ursula von der Leyen, on the sidelines of the summit of the twenty-seven countries on Thursday, February 1, and amid the protest raging in the streets of the EU capital. A tête-à-tête on the future of European agriculture, in which Emmanuel Macron proposed to the EU leader to extend throughout the EU the French law that from 2021 regulates relations between producers, processors, and distributors along the supply chain.

“We need a stronger and more concrete Europe to protect the income of our farmers,” the French president said in the press conference. At home, between 2018 and 2021, he adopted the two EGAlim laws, by which the rules of the game in pricing and generally in negotiations between farmers and buying groups were changed.

To enable producers to earn a decent income, the EGAlim 2 law reversed the way prices are set: contracts and related prices are proposed by farmers, taking into account production costs. In addition, French legislation established an automatic price revision mechanism, a kind of indexing, that takes into account changes in the market and the costs incurred by farmers.

As of March 1, 2023, the French government further supplemented the legislation with the third EGAlim law, which provides sanctions for distributors who put undue pressure on farmers during trade negotiations to set prices.

The law, designed to ensure a fairer distribution of value in favour of producers and processors, is punctually circumvented by distributors by resorting to large European buying groups. Some transalpine supermarket chains purchase their supplies through foreign buying groups to circumvent EGAlim and strengthen their bargaining power vis-à-vis producers. Which ultimately means lowering farmers’ selling prices.

French President Emmanuel Macron with EU Commissioner for Internal Market Thierry Breton (Photo by Ludovic MARIN/POOL/AFP)

For EGAlim to be respected, there needs to be a European law modelled after the French one. “We know that the law is being circumvented by the big purchasing centres, so I fully support the President of the Republic’s proposal,” EU Commissioner for the Internal Market, Thierry Breton, said today (Feb. 5) in an interview with French television network BFM TV.

Besides, Breton’s mission is to have a European Union “increasingly governed by harmonized rules.” That is why he readily took up the suggestion of his compatriot president: “We must have a European law on the model of EGAlim, and I will fight, from my point of view, to go in this direction,” he added on BFM TV.

To “ensure that what we have done at the French level is not circumvented by these large European buying groups,” Macron has asked von der Leyen to work on creating a European health and agricultural monitoring force that would watch for incidents of unfair competition between EU member countries. In addition to the European Commission, the French president will have to knock on the door of all European chancelleries to convince heads of state and government of the merits of his proposal. First and foremost to Berlin and the big German agribusiness groups.