Retailers are putting pressure on fruit and vegetable producers to reduce their prices, with no equivalent price cut passed on to the consumer, a report on the sector has claimed.
In a review of the horticulture industry, compiled by McIver Consulting for Bord Bia, it is claimed producers are being driven out of business.
"The relationship between retailer and producer is critical to the success of any Bord Bia strategy for the sector," says the report.
"Currently, this relationship can be categorised as an unequal one, with the retailers having considerable bargaining power and being capable of exerting extreme pressure on the producers to drive down prices.
"In many segments this is getting to the stage where continued production is becoming uneconomic, thus leading to many producers leaving the sector altogether," states the report.
"This continual downward pressure on prices paid to the producer, with no commensurate reduction in the price to the consumers, has resulted in a significant transfer of margin from the producer to the retailer."
The report notes that the fruit and vegetable industry had a farm-gate value of just over €400 million in 2005.
"The sector needs a strong voice which can represent it as an equal to the retailers. This voice could work with the retailers to develop the market for fruit and vegetables, thus raising both the level of consumption of the products and the margins available to the producers," it states.
The report lists the increasing power of big retailers as the main issue facing Irish horticulture. It notes the lack of scale in some sectors of the industry, the need to increase business development and entrepreneurship and more technical support and advice.
It also outlines the need to invest in advanced greenhouses to improve productivity, and the need to promote horticulture as a career.