Prices below cost of production: farmers need to come together

Bruce Udale and daughter Isabel Moseley check the moisture content of the wheat at their farm at Eyton, Telford

The price currently being paid for wheat has fallen from more than £200 per tonne two years ago to closer to £120 today, and Bruce Udale said that was the main drawback for farmers:

“The price is awful. At £160 or £170 it was too high, but it has gone to the other extreme now.”

The Shropshire Star then noted that there will be a good apple crop this year; will growers get a fair price?

David Handley of Farmers for Action writes:

Grain, dairy, beef, pigs – all are suffering low prices. Farmers need to come together and stop this rot once and for all. We must all act now to protect our livelihoods, nobody else will do it for us!

He noted grain market reports: Low moisture – good bushel weights – but no premiums being paid!

Grain merchants need to explain themselves!

Handley asks “Why is this happening? Grain farmers have worked hard in 2014 to achieve what the market requires at great cost, but their ‘reward’ is prices below cost of production. This is not sustainable.

“Yet all others in the supply chain maintain their margins”.

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FFA sparks grain contract debate

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Paul Spackman asked, in the ‘challenging’ year of 2012 pictured opposite, “What rights and obligations do growers have if crops don’t meet contract specification?”

Olivia Midgley in the Farmers Guardian reported in August that Farmers For Action is urging growers to ‘read the small print’ when signing grain contracts. They said that many contracts had been falling short of ‘fair trading’, with some farmers receiving excessive charges with no warning.

Arbitrator Philip Noyce explained that if grain of sufficient quality is not produced when called for, the buyer may buy in grain of that quality to make up the shortfall and charge the farmer for any difference in cost between the contract and market price. The seller could opt to buy in grain to meet his contract obligations and avoid a damages claim, although he might be liable for any additional haulage costs.

FFA called on the Agricultural Industries Confederation (AIC),which sets the basic grain and pulses contract, to make the system fairer.

South East of England representative Bruce Horn said that there should be farmer representation on the AIC board in addition to the affiliated merchants and trader members.

In the rain-sodden year of 2012 Somerset arable farmer Richard Payne said, “If it’s one year, we can just about get out of it, but beyond that we are facing serious problems. It will become increasingly hard to continue at all.

“For supermarkets, food prices must be kept down, at all costs, for the consumer. But because farming is such a long cycle there is little account taken of retrospective costs for the producer.

“I used to be in beef, but we were screwed to the floor by retailers. It didn’t matter what costs you had, they didn’t care. I had to get out of it”.

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FFA asks any farmer with suggestions or support for achieving a fairer contract to contact David Handley, 07711194947 or Bruce Horn, 07966674846.  They want farmers to tell them their own personal experience of selling grain in 2012 to enable them to put forward a strong case to bring about beneficial change.

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