C’est Qui Le Patron? (Who’s the Boss?) : French consumers find a way to deliver fair farm prices
Farmers lose out in the food chain
The invasion of Ukraine by Russia, the raging war and the Western sanctions which are being rolled out in retaliation are sending already fast rising energy, 
feed and fertiliser costs into overdrive. With farm input costs skyrocketing, food inflation is now a problematic and worsening reality. Consumers already challenged by energy and fuel price rises, now have to contend with food price inflation further eroding their budgets.
The extent to which food price increases get passed on to consumers will depend on just how aggressively retailers seek a competitive advantage through low retail price offerings when shoppers’ budgets are squeezed. Experience suggests farmers’ returns inevitably get eroded, and their share of retail value reduced, catching them in an unsustainable squeeze of falling prices and increasing costs.
The current Ukrainian crisis is making matters worse, but the issue is more fundamental and several European and national policy initiatives in recent years have sought to address it. Regulations have been adopted by the EU to outlaw at least some unfair trading practices in the agri-food supply chain. These were implemented in Ireland in the Grocery Goods Regulations and the Unfair Trading Practices Regulations. In France, the EGAlim legislation introduced in 2017 was very ambitious, providing food production costs benchmarks to regulate the prices paid to farmers while limiting price-based retail promotions. The Common Agricultural Policy, since 2013, provides for the recognition of producer organisations to strengthen the power of primary producers in the food chain, giving them a degree of latitude in competition law. Producers are encouraged to come together to manage supply and collectively negotiate prices to improve returns.
However, despite the legal recognition of the problems, retailers have continued to compete for market share by squeezing retail food prices, especially those of fresh foods, dairy, meat, fruit and vegetables. Even if they take the hit short term, over the long-term, the trend towards a reduced margin for farmers continues unabated. This is clearly evidenced by the USDA Food Dollar Series, which measures the share of farmers’ remuneration in the food value chain. As the graphic outlines, in the period from 1993 to 2019, the share of every Dollar spent on food which goes back to farmers has fallen from 17.5 cents to 14.3 cents – a fall of 18%. This trend has been uninterrupted in the last 10 years.
Meanwhile, the USDA production cost series suggests that in the last 20 years, milk production costs have increased 26%, wheat by a whopping 86%, and beef (cow/calf) by 45%.
Trends in Europe also reveal an ever tightening cost-price squeeze. The reducing market value share and the increasing unit production costs are pushing farmers globally to expand and intensify or get out of the business.
French farming in crisis
The period around 2013-17 saw a major economic and social crisis in the French agriculture sector. Production costs were rising while price pressure from processors and retailers, and the destabilisation of international markets, including the end of the milk quota regime, collapsed farm prices. What ensued were massive financial losses on farms and rural socioeconomic deprivation which fed into the “Gilets Jaunes” protest movement.
It coincided with the rise of what even the French call “agribashing”, with French societal expectations finding increasingly extreme expression from some quarters. Social media amplified shrill, often ill-informed criticism of pesticide use, animal welfare practices, and modern farming in general, with some extremist groups such as L214 even undertaking and defending actions of sabotage on farms. This was taken sufficiently seriously by the French government to justify the creation of the Demeter Cell – a special section in the French national police in charge of responding to attacks on farms.
For all the toxicity of the atmosphere, there was also those who understood that this was a fundamental crisis of the French food systems, which required real solutions.
The best evidence of this was the major national policy development conversation known as Les Etats Généraux de l’Agriculture, which was promised in his election manifesto by now President Emmanuel Macron. In 2018, it resulted in the implementation of the EGAlim Law referenced earlier. This requires production costs to be taken into account in farm price formation and restricts price-based promotions by retailers among other measures to protect farmers. A broad ranging and ambitious piece of legislation, it also includes measures aiming to increase food security and self-sufficiency in France, improve diets through education and labelling, increase animal welfare standards, and strengthen the focus on locally produced and organic food marketed through short distribution circuits.
An original French initiative: C’est Qui Le Patron?! (Who’s The Boss?)
The income (and agribashing) crisis affected French dairy farmers particularly 
hard. Milk prices fell chronically below production costs – with comparable milk prices to those experienced in Ireland through the period, but lower production scale per farm and significantly higher costs (38-40c/l costs for conventional milk in the main production regions, 45-56c/l for mountain areas and organic systems – sources CNIEL and FADN), the situation was dire on many farms.
The C’est Qui Le Patron (CQLP) initiative was dreamt up in 2015/16 specifically for milk. To quote the campaign: “In this difficult context for producers, the idea was born to create a brand to allow us consumers to take control of our consumption while supporting producers by remunerating them at a fair price allowing them to live from their labour”.
A meeting took place between a milk producer, the director of a dairy co-op and two marketeers. One of those marketeers, Nicolas Chabanne, promoted local strawberries by putting photos of their growers on the label long before this became an established strategy elsewhere. He then went on to save misshapen vegetables from the scrap heap by creating the “Gueules Cassées” label named after the words used to describe the returning disfigured veterans of WWI.
CQLP encourages consumers to buy into a co-operative, purchasing a €1 share which allows them a say in defining the specification of a product. This is done through a transparent online questionnaire in which consumers identify their priorities for the product, and as they make their choice, they can see live the impact it has on the producer and retail prices.
In the case of conventional, semi-skimmed UHT milk (the biggest seller in France), 6,823 consumers voted:
- for the product to originate exclusively in France,
- for the producer to be remunerated at a fair price for her/his labour, with the ability to take holidays (i.e. replace her/himself) and re-invest in the business,
- for the cows to be at grass for 3 to 6 months per year,
- for feed to be GMO free, with addition of alfa alfa and clover to optimise Omega 3 levels in the milk,
- for all forage to come from less than 100 km of the farm,
- and for the milk to be packed in a carton with a screw top stopper.
This combination yielded a minimum recommended retail price of 99c/l in 2016 compared to a 77c/l national average, and a guaranteed price to the producer of at least 39 c/l, when the going rate was close to 30c/l, well below costs. With massive input cost inflation, the consumer shareholders have just been polled again, and have agreed to increase the guaranteed minimum price to farmers by 4c/l to 43c/l, bringing the minimum recommended retail price to €1.03, compared to an average around 85c/l. As the campaign said “these 4c/l represent only €2 more per year for us consumers, but for them (the producers) it changes everything”.
The success of this initiative lies in just how much it caught the imagination of the public, roping in the solidarity of consumers for farmers under economic stress, with no major marketing budget outside of social media. The main marketing tool was “pester power” of a kind, with consumers urged through social media to demand that their local Carrefour, Leclerc, Intermarché or Lidl supermarkets carry the product.
After milk, CQLP carried out similar spec plebiscites to develop many branded 
staples of the French shopping basket: butter, cream, yoghurts, eggs, flour, hamburgers, apple puree, honey, chocolate, pasta, strawberries, potatoes, bagged lettuce, chicken, bread, even tinned sardines, wine and pizza. The consumer defined specification for pasta sauce and organic liquid milk are currently being developed, with ongoing polls.
A drop in the ocean which educates consumers on the real cost of food
Five years down the line, CQLP sells 59m litres of milk per year (and rising), and can be found in just about every major retailer countrywide. While this is only 2.6% of national sales, it came from zero, was achieved with little or no advertising spend, and spawned many additional “equitable milk” brands with producer price commitments.
The other CQLP branded products are even smaller sellers, but their distinctive packaging and branding makes them highly visible on shelves and stops consumers in their tracks. They come with a story which consumers learn from by simply reading the pack or the leaflets available on the shelves. Retailers have played ball, because of consumer pressure through social media, and because carrying the products helps them deliver on their corporate responsibility goals. In fact, some have developed their own version of “equitable” private label brands, especially for milk, or have signed up contracts with processors which include minimum retail and producer price commitments.
CQLP is a very French initiative but has started to export itself. Structures have been established and a handful of products put on the shelves in Germany, Belgium, Spain, Greece, Italy, Morocco, the Netherlands and the UK (The Consumer Brand). There is even work ongoing to set up a CQLP campaign in the US (Eat’s My Choice).
In Ireland, where fruit and vegetables are available every day at 39 or 49c when their production costs are a multiple of that figure, this initiative may appear particularly appealing. It has the merit of creating a realistic conversation around the true cost of food production for consumers and retailers alike, and to show just how unsustainable price-based promotions can be.
This conversation will be very difficult when geopolitical instability forces massive inflation in energy, agricultural costs and ultimately food prices. But that does not make it less fundamental to the long-term sustainability of our food systems.
The type of clever initiative I describe this month is not a silver bullet solution to the lack of fairness in the food chain, but it has the potential to capture the imagination of even jaded consumers, reconnecting them with their food while educating them on its real cost.
Maybe the Irish agri-food sector should take some inspiration?
© Catherine Lascurettes, Cúl Dara Consultancy
