Vice President's Blog - 6 May 2020

The current turmoil and supply chain disruption has brought a quote from the late American President, John F Kennedy into sharp focus and provide pointers for the future writes NFU Scotland Vice President Charlie Adam.

‘The farmer is the only man (and I would also suggest woman!) in our economy who buys everything at retail, sells everything at wholesale and pays the freight both ways’.

The weakness of farmers in the supply chain is nothing new. Up to now, albeit grudgingly, we have largely been prepared to ride the ups and downs of the market and, depending on sector, rely on direct or indirect support to make up for what the market couldn’t, or wouldn’t, pay us in order to maintain a viable business.

However, things have changed. With 95% of the nation’s food sold by just nine retailers and a concentration of power in a small number of large food processing interests, often foreign owned, the imbalance in the food supply chain has become untenable.

The recent chaos in the food supply and distribution caused by the Covid-19 pandemic has exposed just how vulnerable the system is to disruption. We cannot take our food security for granted.

In the UK we currently grow not much more than 50% of our food ourselves. In a recent TV documentary Tim Lang, professor of Food Policy at London City University, said ‘A nation which only half feeds itself needs to wake up’ and he is right!

The empty supermarket shelves experienced as coronavirus hit should lead consumers and Government to value domestic farming and the food we produce far more than hitherto and take the issue of food security seriously.

There must be greater transparency and a fairer share of rewards in the food chain for the primary producer, resulting in a profitable, sustainable farming industry with the multiple other benefits which that brings.

Otherwise we leave ourselves open to even greater disruption in future because of over dependence on imported food, often of dubious provenance, plus insufficient domestically controlled processing capacity and all at the expense of a thriving and profitable farming industry at home.

Despite the current focus on Coronavirus, issues around future trade deals, tariff regimes and agricultural support post Brexit have not gone away and the Covid-19 experience should focus minds on the potential consequences of any bad decisions and poor outcomes from that process.

NFUS has always lobbied hard for fairness and transparency in the supply chain. If made at the right time and in the right way, the argument may gain more traction now.

However, the reality is that just repeating the argument alone, without looking in addition at what we can change and do better ourselves, is unlikely to result in a sufficient increase in returns from the marketplace.

The ongoing effects of Covid-19 and the resulting economic recession will inevitably impact on the finances of all consumers and all food related businesses for some time to come.

Given the huge cost to the exchequer of pandemic alleviation measures and the need to prioritise in future Government spending, support from the public purse is likely to be hard won and would come with an increased obligation to satisfy social and environmental objectives, as well as require tangible and visible efforts by the industry to help itself.

In short, things are going to be tough and a reversion to how things were before is very unlikely indeed, so as an industry, as a Union and as individuals we must seriously look at what actions we can take ourselves to achieve or restore and/or increase profitability? Everyone in the food supply chain needs to do this.

Despite having been said many times before, it remains the case that as price takers our best approach to influencing how much we are paid for our produce is to generate demand and having done so, to control the supply of the product.

This means identifying what the market wants from us and is willing to pay more for, working together more and then undertaking to supply in exchange for a fair price and under agreed terms and conditions.

This is how business is conducted by many of our foreign competitors in the industry and by the most successful at home. For most of us, the alternative of producing whatever we want as individuals and hoping someone will buy it regardless of what the market and the consumer wants will inevitably leave us vulnerable to market volatility, price slumps and at the mercy of processors and retailers, not to mention cheap and efficient foreign competitors.

We must ask ourselves if enjoying the occasional boom is worth the misery which we endure (or suffer?) the rest of the time. If we say yes, then fine but it means accepting the troughs and busts too!

With some notable and very welcome exceptions, discourse and dialogue between primary producers and many of the retailers and processors in the food chain has often consisted of warm words and assurances given when needs must, and quickly forgotten with reversion to a completely self-interested short term ‘grab it while you can and to blazes with everyone else’ culture as soon as market conditions change.

Rather than hurling insults at each other, it must be in the long term interests of everyone involved for all parties, with the help of governments, to get together and find a different way of working to the benefit of all concerned from primary producer to final consumer and everyone in between.

NFUS is ready and willing to facilitate such discussions without delay. This needs to be sorted now!

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