EU Agriculture Commissioner Phil Hogan has written formally to his counterpart in the Competition directorate - Alexander Italianer – expressing deep anxiety that fertiliser prices have not dropped in line with the recent falls on international oil markets.
Mr Hogan told Farming LIfe during last week’s visit to Belfast that oil prices have dropped by 46% over the past number of months, yet we have not seen any comparable trends impacting on EU and international fertiliser markets.
“In fact, fertiliser prices actually rose prior to Christmas,” he added.
“My concern is that we could be looking at another 2004 scenario, when fertiliser manufacturers were fined by the EU Commission for operating a cartel.”
The Commissioner went on to point out that he could not officially lodge a complaint with the EU’s competition directorate on this matter.
“But any officially recognised stakeholder group can,” he said. “The starting point is the gathering of hard evidence to the effect that fertiliser prices have been insulated from market forces over recent months. Once this step has been taken, I will be more than happy to bring to bear whatever influence that I can on the matter.
“There is an inextricable link between oil prices and fertiliser manufacturing costs. If one goes down, so should the other. Given current circumstances the fertiliser companies must be pressurised to explain what is actually happening within their marketplace at the present time.
“Farmers must be given every opportunity to develop sustainable businesses for the future. This means they must get realistic returns for the produce they bring to market and have access to inputs at realistic prices.
“I have already made it clear that I am prepared to introduce legislation next year, paving the way for the appointment of an EU supermarket ombudsman. This will help ensure that primary producers get a realistic slice of the cake when it comes to the farmgate returns they receive,” said Mr Hogan.
“However, I have no control over the operation of the fertiliser market, which is why I have written to DG Competition on this fundamentally important matter.”
Commenting on this development UFU President Ian Marshall said: “Fertiliser prices are something that the Union has been monitoring for a considerable time now and we have been concerned that while oil prices have dropped significantly over the past number of months, fertiliser prices have not. The Union raised this with the EU’s Agriculture Commissioner Phil Hogan when he was in Northern Ireland at the end of last week and we fully support his actions to write to his counterpart in the EU’s Competition Directorate highlighting this issue.
“There is a need for fertiliser companies to be transparent in their dealings with farmers and explain why prices have not mirrored oil price trends as well as to explain why in fact we are seeing increases in costs at a time when the exchange rate should be acting in our favour. If fertiliser companies are being opportunistic and profiteering off the back of low oil prices they should be held to account.”