President's Blog - 8 August 2019

Brexit uncertainty does not change the major problems in Scottish farming that must be grappled with and resolved writes President Andrew McCornick.

Volatility, challenging weather and poor market returns are paralysing and damaging all sectors.

In his blog today, Combinable Crops Chairman Ian Sands talks about a promising harvest being undermined by Brexit, poor weather, falling prices and rising costs.  Read it at:

Next week, we will be writing about the dysfunctional dairy supply chain and what compulsory contracts might offer.  At the same time, we have successfully encouraged the BBC to attend the Lairg lamb sales next week – the best barometer on future prices for store sheep.

The recent NFUS summit on beef will be followed up next week with our attendance at the Scottish Government’s summit on Monday.  Our six-point plan for beef is:

  1. Investment in producer organisations to strengthen the primary producers’ bargaining power by organizing supply.
  2. Clear origin labelling on processed beef products and in the foodservice sector.
  3. Additional direct support for active beef producers to bridge the gap until the new agricultural policy for Scotland is introduced.
  4. Increased investment by Government to help develop new markets for Scotch Beef PGI.
  5. A Scottish-first policy for public procurement.
  6. Increased recognition of the positive environmental credentials of Scottish beef production.

It is a crisis.  Quality Meat Scotland has confirmed that the year on year price for Scottish steers has fallen by £143.50 per head, a drop of almost 10 percent.

At these prices, our iconic beef industry is being starved of adequate returns from the marketplace to allow finishers the confidence to invest in the next crop of calves to continue to supply the processors.

Why should they restock their finishing sheds, when the price the processors are paying fails to cover the cost of production?

All farmers – not just beef - are producing for the market and the market is, too often, turning around and saying thanks, I’ll pay you this much, because we can, and yet we continue to supply beef, lamb, milk, malting barley, whatever at these prices.

Our produce makes its way onto a retail shelf, after some processing or packaging, and the consumer is told if you want this whisky, mince, steak, cheese or chop then you will pay this price, which includes a guaranteed margin and cost to the retailer.  

The retail sector is screwing itself into the ground by constantly trying to grab market share and this contributes to producers getting paid a crippling price. This is not about Charles Darwin and survival of the fittest, it’s more about a parasite that is destroying the host and itself.

We must change how we do business to survive.  We need a transparent food chain based on trust and underpinned by contracts and supply agreements that allow for margin to be shared.

Based on Prime Ministerial promises, there is a huge cash injection coming our way.

There is a debate to be had on how that money secures the best outcomes for Scottish Farming plc.  Would some of that money directed towards producer co-ordination and co-operation across all sectors strengthen our position in the chain?
This would mean pricing is done from the other end of the food chain with guarantees on supply, standards and quality from the farmers and crofters’ side.  Processors would be contracted to get market ready goods for retailers.   Ultimately the retailer, processor and producer all get a margin with the consumer paying a fair, more realistic price creating an industry less reliant on taxpayers’ support.

Examples of successful producer organisations already exist, but predominantly in unsupported sectors.    

We need to consider food chain models for all sectors that are radically different to what we do now if we are to break this cycle to the benefit of all Scottish producers.

Author: Andrew McCornick

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About The Author

Andrew McCornick

Andrew, who is married with three sons and a daughter, was born and brought up on a dairy farm in Wigtown. Andrew and wife Janice farm their 230+ ha unit with 160 suckler cows and 600 breeding ewes with a small herd of pedigree Charolais cattle. Andrew's sons farm a nearby tenanted unit which frequently provides replacement breeding stock for Barnbackle. For as long as Andrew can remember, he has been a member of the Union, and got more involved when the consultation for Nithsdale NVZ came out. From there he went onto become vice chairman of the Dumfries branch, and then onto his previous role of Regional Board Chairman for Dumfries and Galloway. He also sat on the LFASS committee. Andrew was elected Vice President in February 2015.

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