The European Commission hopes to outlaw unfair food trading

15 04 2018

Irish farmers have welcomed a set of EU proposals aimed at clamping down on unfair food trading but said they represented just a step in the right direction. The EU hopes to ban unfair practices in the food chain which adversely affect small businesses.

The Times reports that Joe Healy, the dairy farming president of the Irish Farmers’ Association, said:

“The current situation, where processors and retailers always make a margin while farmers are sometimes forced to produce at or below the cost of production, is totally unacceptable”.

The European Commission’s proposals will be assessed by the European Council, where member states are represented, and the European parliament, before being put into law. National authorities will be able to impose sanctions on companies which break the rules, if they are introduced.

Practices which could be banned include

  • late payments for perishable food products,
  • last-minute order cancellations and
  • retroactive changes to contracts.

Other measures would be permitted only if both parties (eg farmers selling to supermarkets) have an agreement in place saying they are both happy. These include:

  • a buyer returning unsold food products to a supplier,
  • a buyer charging a supplier to secure a deal,
  • or a supplier paying for their food products to be marketed by the buyer.

Ireland’s Phil Hogan, the EU agriculture commissioner, said that the proposals intended to make the process of making and selling food fairer. He comments:

“Today’s initiative is about strengthening the position of producers and small and medium businesses in the food supply chain. The initiative is equally about providing strong and effective enforcement. We are looking to eliminate the fear factor in the food supply chain through a confidential complaints procedure.”

Joe Healy said that a new regulator should be set up to handle the food supply sector: “In Ireland’s case, this function is being subsumed in the Competition and Consumer Protection Commission, where its effectiveness is lost”.

Mr Healy pointed out that that if minimum common standards of protection are introduced across the EU “it is to be welcomed, but is only a first step in rebalancing power in the food chain”.

 

 

 

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Would ‘special protection’ for farmers, ensure a just price?

28 03 2018

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An alliance of farming and environmental groups, calling for the government to give special protection to small and medium sized farms in its new Agriculture Bill, was recently mentioned on a BBC website. It argues that having a range of farm sizes and types is vital for a resilient and dynamic farming industry, as well as rural communities and the environment.

Sustain, the co-ordinator, covers a wide range of farming and food-related concerns but – as a charity –  makes no reference to a just price, a pre-requisite for the survival of small and medium sized farms. That would be regarded as political campaigning – so government disempowers otherwise well-meaning initiatives.

A Lancashire dairy farmer says: “Farmers ought first to supply the produce that the inhabitants of their own country requires at a fair price according to its quality. Then supply surpluses to any countries in need – not have to compete against each other using food as a commodity for the benefit of the middlemen who waste it, export it to countries with the capacity to produce their own staple food, or undersell it to gain volumes of retail business”.

 She points out that the opt-repeated exhortation to increase production is a stealthy means of introducing “Mega Farming” by the back door:

“Without the infrastructure, borrowed money would be required by the expanding farmer to support this in the longer term and this in itself would be almost impossible to repay without the additional investment income having been included for example in the farmgate milk price. Hence the potential for the eventual unfair financial ruin or suicide of the farmer, with no financial consequences for the middlemen or the government”.

She continues: “I was given the following figures by a farmer from Cumbria who sat with us on the bus travelling to the FFA march through London on 23rd March 2016.

How the retail price of milk in 2014 compared in real terms with that of 1994:

Farm Gate Price for August 1994 was 24.27ppl

Retail Price in August 1994 = 30.11ppl

Retail Price in August 2014 (adjusted for inflation) = 28.24ppl

If this had increased in line with inflation, in August 2014 this would give a farmgate price of 43.11ppl. 

Below is a table of comparisons of Farmgate Milk Price when set against Inputs required to produce that milk. The information was provided by the Cumbrian farmer together with a copy of her 1994 milk cheque statement; she had compared the figures with her old invoices from the same year.

When the Milk Marketing Board was broken up in 1994 because it was considered a statutory monopoly by EU laws that themselves are now outdated and in urgent need of amendment by the UK government, the so-called free market became distorted. Government put in place no regulation and food producers have had to bear the full force of massive retailer/processor lobbying and financial powers.

The writer ends: “With the continued exploitation by middlemen and without some form of government intervention to ensure reasonable welfare, environmental, production and reinvestment costs are at least met in payments made for produce, every genuine farmer is stuck unfairly on a treadmill with accumulating debts to meet unless he goes bankrupt, commits suicide or finds another source of income that will likely require some form of substantial financial investment to set up in the first place.

“Perhaps a good way to improve farm incomes would be for the government to cut out the middlemen and procure its own milk supply and other staple produce directly from a “pooled” national supply to supply milk and meals for schools, hospitals, prisons and the services etc. Ensuring those who are most vulnerable have at least a ration of good quality nutritional food to meet their dietary needs, thus improving their health and welfare”. 

Farmers for Action (Northern Ireland), whose posters are displayed above, have designed a bill to be presented when Stormont reconvenes.  A bill, written by Daniel Greenberg, a barrister who specialises in legislation and is Editor of OUP’s Statute Law Review, is to be taken forward.

It proposes that farmgate prices in NI return to farmers a minimum of the cost of production, plus a margin inflation linked, that would give 20,000+ new jobs and prosperity across the province in towns, cities and countryside alike.

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A Fair Food Brexit?

18 03 2018

 ‘A Food Brexit: time to get real, a briefing paper published by the Science Policy Research Unit and summarised here, asks what can be more important than our national food supply. The authors warn “There is a real danger in the fantasy that these new times will not affect UK food. They will. So the public must ramp up its interest”.

A Lancashire dairy farmer (by email) said that supermarkets – powerful lobbyists and valued party funders – are driving out production of staple British food and compromising food security, adding:

“The greedy giants are also putting at risk the livelihoods of hard working British farmers, their families and their communities. Large businesses are gradually asset-stripping everything of value from our communities to make profits which are then invested abroad in places like China and Thailand”.

Ensure farmers a minimum of the cost of production plus a margin for overheads

For several years, William Taylor and other leaders of Northern Ireland’s farming organisations (below) have been actively lobbying politicians from all parties and none.

They have been seeking support for legislation on farmgate prices which would ensure farmers in NI a minimum of the cost of production plus a margin inflation-linked across the staples.

Farmers, who do most of the work producing food, get little of the profit

Last year Copa and Cogeca called for EU legislation to curb unfair trading practices in the food supply chain in a formal reaction to the EC’s impact assessment. Copa-Cogeca Secretary-General Pekka Pesonen said:

“The huge imbalance of power in the food supply chain has left us with no choice but to call for legislation to be introduced to improve farmers’ positioning and to stop unfair trading practices. It is unacceptable that farmers get for example only 20% of the profit when they are the ones who do the majority of the work producing goods”. 

The British farmgate share of retail price fell 15% on average between 1988 and 2015 (DEFRA report). If outsourcing food production, paying prices below production costs and opening up to cheaper imports intensifies post-Brexit, how will farmgate prices- and British food security fare?

A Guardian article reviews the latest report by the Commons cross-party environment, food and rural affairs select committee (February 2018), noting its warning that food prices could rise sharply and farming businesses could be wiped out at the end of a Brexit transition period.

Devinder Sharma sees a pattern: for the first four years after national elections, the ruling parties ignore farmers and a few months before the elections, ‘electoral bait’ is briefly dangled before them. It happens, but to a lesser extent, in Britain – lesser because this country does not have 50% of its voters working in agriculture.

Sharma concludes in Gaon Connection, the  Hindi news platform for agriculture and rural India (translated here), that the day all farmers rise above political ideology and vote as farmers, the political landscape will change.

He could be right.

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The reopening of this website has been inspired by the work of food author/journalist Felicity Lawrence & farmer/diplomat William Taylor

7 03 2018

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Though inactive since 2014, it has continued to attract a significant number of readers – from 56 countries in February this year.

We remind readers of our concern expressed in the final 2014 post: the whole spectrum of British food production is at risk. All food producers should get cost of production plus – a fair deal.

Today milk, egg, poultry, pig meat, fruit and vegetable farmers are periodically deprived of a fair price. If producers continue to leave agriculture the only alternative is foreign or mega-farmed milk and other produce – an appalling prospect for several reasons, not least the question of food security. There are many in power who are promoting imports, exports and large-scale factory farming.

The writer believes that only if producers of perishable food combine can they achieve a fair price.

Their problems might intensify post-Brexit

 

 

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Dig deep for fair pay: Felicity Lawrence

7 03 2018

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Points made in Felicity Lawrence’s article

Felicity (left) writes: “Across sectors, the past 50 years has seen a dramatic decline in the farmer’s share of the money as the buying power of supermarkets and processors has become more and more concentrated, their tendency to oligopoly largely untouched by competition authorities. These are dysfunctional markets”.

Martin and Sarah Mackey are tenants on their organic Kent holding, Ripple Farm, and have no inherited, accumulated capital in the land to subsidise their business, although they receive about £5,000 a year in EU environmental farm payments. They grow potatoes and kale, in Kent. Some of the potatoes are sold at local markets for a pound a kilo, about the same as you would pay for the equivalent grade in a high street supermarket. They also supply a trading and wholesaling operation called Growing Communities that mixes their potatoes with other produce in vegetable box schemes, starting at £7.75 for a week’s supply for one.

Julie Brown, Growing Communities’ director, says her mission is to feed urban communities locally in a way that is fair and sustainable in the face of corporate dominance and climate change.

She starts from the position that the price she gives the Mackeys for potatoes must cover their cost of production and enable both of them and their staff to earn a reasonable living. So she pays them 60p per kilo for delivered goods. Her supply chain is short and direct, keeping other costs to a minimum.

She also believes her customers should know where the money goes and explains that most of her mark-up goes into wages. Her packers are paid the London living wage, the amount the Resolution Foundation calculates is required to cover the real cost of living and in good years, a share of the profits in bonuses. One of her organisation’s governing principles is that the pay ratio between top and bottom should be no more than 2:1, so Brown takes a salary of £30,000 a year.

All this sounds like a version of common sense, and yet such thinking is revolutionary in our food system, where value has been sucked up to the top.

In conventional production, the average price for potatoes at the farm gate has been just 11p per kilo recently (less than a fifth of what Brown pays). A large-scale supplier to supermarkets or manufacturing will typically get only this small fraction of the retail price of around £1 per kilo that we pay in the shops, with opaque mark-ups along the way for complex transport and logistics systems, processors’ costs, retail margins and executive pay.

Mackey’s jobs have been filled by local recruits

Large-scale producers bring in migrants because local people do not want these jobs, especially where they are seasonal, and small wonder. Unlike many agency workers supplied to industrial farms to harvest and pack, the workers on Ripple Farm receive holiday pay, sick pay and good protective clothing to keep them warm and dry. There is year-round employment five days a week, and a hard stint outdoors in the morning might be balanced by a less arduous indoor job in packing and admin in the afternoon. The work is tough and physically demanding, as agricultural work has always been, but it is not allowed to be crippling.

Finding good staff is not always easy but with good pay and conditions, the jobs have been filled by local recruits.

The key for Martin Mackey is having routes to market that he can plan for and control, remaining, in other words, outside the system of supermarket and big manufacturing just-in-time delivery that now accounts for the vast majority of UK production.

 

 

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Final FDF post: ‘Divide and rule’ strategy continues to weaken food producers

20 10 2014

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fdf2The whole spectrum of British food production is at risk. All food producers should get cost of production plus – a fair deal.

Today dairy farmers are protesting, egg, poultry, pigmeat, fruit and vegetable farmers are also periodically deprived of a fair price. If producers continue to leave agriculture the only alternative is foreign or mega-farmed milk and other produce – an appalling prospect for several reasons, not least the question of food security. There are many in power who are promoting imports, exports and large-scale factory farming.

The writer fears that only if producers of perishable food  combine can they achieve a fair price.

FDF council member David Handley recently, via his wife, asked to be taken off the list, because – it seems – they did not share this belief. (But note that now the forthcoming demo will be cross-sector: https://foodvitalpublicservice.wordpress.com/2016/03/04/farmers-march-to-ask-government-if-they-want-farming-to-continue-in-britain/)

We thank the most prolific farmer-contributors, Kathleen Calvert, Hilary Wilson, Michael Hart, William Taylor and Pippa Woods. The loss of the late Andrew Hemming’s patience and wisdom is felt. We redirect readers here and abroad (noting last week’s increase in Swedish readers) to the Food Security website. We have also valued the support of Localise West Midlands, where readers still ‘find’ news of the Fair Deal awards.


Any future contributions will be seen on the Food Security website.

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Campaign tactics

20 10 2014

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In Radio 4’s Farming Today coverage of the Morrison’s demo, David Handley was stressing that farmers need profit just like other commodity producers.

Correct – and it was good to note that he did not refer to specific sums because the writer has heard the reaction of members of the public sympathetic to the dairy farmers’ cause being daunted by references to £70,000 losses.  Another farmer who is well aware of this outreach problem says:

It is not about why shouldn’t farmers make a profit – it is about how you present the financial facts on income to the media and to the public. He continues:

To the public, “income” is what is in their pay packet, it is not “income” as thought of by farmers. To them, income is the money they get for their produce from which they have to pay the costs of production which either leaves them a profit or more likely a loss, at the moment, in milk production.

So if a farmer is reported in the media as having had a £70,000 loss in income, the public viewing it will ask themselves how much was he earning in the first place, seeing not a loss in income from the sale of produce, from which production costs have to be taken but a loss of £70,000 from his pay packet.

The public do fully understand if farmers say for example ” I was getting 35p a litre and now I am getting 27p a litre” a simple clean message easily understood and accurate. Because that is just like them getting less pay per hour for doing the same job.