Category Archives: Food producers

No fair trade here: cream and butter prices rise but farm-gate prices for milk don’t

The Financial Times reports that a reduction in the milk supply, due to a cold spring and dairy farmers leaving, has led to prices of butter and cream rising 18.7% in the year, according to data from the Office for National Statistics. But despite “record prices” for wholesale cream and butter in recent weeks, the National Farmers Union point out farm-gate prices for milk have continued to fail to keep in step.

BBC online reports that Arla’s CEO Peter Tuborgh said producers “put the brakes on” in 2016, in the wake of previous overproduction of milk and consequently lower prices and Michael Oakes, chairman of the National Farmers Union dairy board, added that UK supply had fallen partly because so many farmers “decided enough was enough during that downturn”. Many farmers have often had to sell milk for less than the cost of producing it and so – understandably – the number of UK dairy producers has fallen.

The National Farmers’ Union said the “constant boom-and-bust dairy market cycle” helped “no-one, most of all farmers” and expressed concern about the lack of strong upward movement in the farm-gate milk price.

Milk buyers are worried about milk volumes falling but, the NFU spokesperson added, “Confidence within dairy farming is at an all-time low [due to] mistrust in the market dynamics and suspicion about how milk buyers are treating their supply base, coupled with the lack of direction on the impact of Brexit on the dairy sector.”

Post-Brexit, will the UK government ensure that ‘ordinary’ farmers receive a fairer proportion of the agricultural payments and turn away from the practice of subsidising offshore companies and rich individuals?

And will the Groceries Code Adjudicator, who places great emphasis on scrutinising supermarkets give more time to food producers and address the issue of unjust farmgate prices?

 

 

 

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The Royal Association of British Dairy Farmers: 2003 and 2017

In August 2003 the Farmers Guardian reported that a series of industry-wide meetings, called by the Royal Association of British Dairy Farmers (RABDF), were held for a year to discuss the true costs of milk production.

Members of RABDF, with independent research consultancies and dairy farmers, produced a report showing that the cost of milk production is much higher than current estimates state. The true cost of milk production was found to be between 20 and 23p a litre, rather than the 18p currently being paid. Dairy farmers were working an average 70-hour week with only a few days holiday each year and low milk prices have left them earning just £2.90 an hour.

The chairman, Tim Brigstocke, said that problem areas were fixed costs, farm overheads, farmer remuneration, family labour costs, pensions and staff development had not been included in current assessments.

The new guidelines proposed by the RABDF included gross costs such as feed, forage, bedding, and vet’s bills; operational costs like labour (£10 an hour deemed a reasonable figure to factor into the equation, given the level of skills required in dairying), machinery, depreciation, property-related, unpaid family labour and resource costs: rent, quota leasing and finance costs. Mr Brigstocke urged producers to adopt these guidelines to arrive at a realistic picture of how much their businesses were costing them.

A Lancashire dairy farmer contacted this site to voice concern about the very differently focussed RABDF of 2017 and its ‘elitist style’.

RABDF, now described as the ‘the new secretariat to the Trehane Trust’, is advertising its October conference in Birdcage Walk London for ‘leading farmers’ who are to be granted the opportunity to ‘rub shoulders’ with policy makers and supply chain leaders. The conference will be held in conjunction with the Trehane Trust which funds research into all aspects of the dairy supply chain, from production to new product development and consumer trends in the dairy sector – but the crucial subject of farmgate prices is not listed.

One of the invited speakers at this most opulent venue (above) is from Arla – a downward trend-setter, announcing a price reduction for the April payment – the first milk price drop in 2017 by a major UK milk buyer. A further online search will reveal that this company has closed several processing plants making hundreds of workers unemployed, though the net profit of the Arla Group last year was €356 million.

The key findings of Trehane Fellowship recipient Mike Houghton of Andersons will be included. He has been researching future options and opportunities for the sector at home and abroad, using his contacts in Canada and the USA to find out more about their support systems, in particular crop insurance schemes and futures markets and consulting key people within the legal profession and the insurance industry to obtain a different perspective on the topic. 

Tim Brigstocke is now RABDF’s policy director

When this ‘Business and Policy Conference’ has taken place, will he help the RABDF to come down to earth in the interests of the average dairy farmer – arguably an endangered species?

In the interests of food security, will the RABDF present the facts about rising costs but low and fluctuating farmgate prices to the complicit policy makers and supply chain leaders, with whom wealthy farmers are being invited to rub shoulders?

Or will they continue their failed policies as the dairy sector continues to decline and foreign importers take over?

 

 

 

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Dairy farmer writes: input costs have soared as farmgate price drops

Another Lancashire dairy farmer (a few of her herd, right) responds:

Not only was the average price UK dairy farmers received for their milk in 2015 lower than it was when the MMB was abolished 24 years ago, but it was 24% lower, and that was before farm gate prices last year suddenly plummeted by 1/3. 

No producer ought to be losing vast sums of money for their hard effort when producers are mainly exploited by those who can.

The cost of basic utilities and inputs required to produce that milk has risen:

  • water has increased by 137% in the same period since 1994 due to  companies being able to automatically raise their prices annually by the rate of inflation
  • similarly the price of electricity over that period increased by 207%  
  • Animal feed costs up 58%  
  • fertiliser up 114%
  • and diesel 224% 

and that is another reason that the number of dairy herds in the UK has collapsed – as input pricing is so much out of kilter with the farm gate price.

 

 

 

Government tolerance of unfair trade imperils British food production by failing to deliver justice

 A friend who does not follow farming news in any detail singled out this graph on my computer and I had to say that a more up-to-date version would show even greater falls:

Farm income has fallen sharply on average in Britain and is reported to have plunged by more than 40% in a single year in Northern Ireland, leading to warnings that the industry is facing a crisis. The biggest ‘driver’ was a fall in dairy prices, which dropped by 27% to £480m. The figures were disclosed in a report published by NI’s Department of Agriculture and Rural Development. 

The BBC reports that some young people from these British farms are now being compelled to get jobs in agriculture overseas because – though their help is needed – their parents can’t pay them to stay at home and work on the family farm.

Ulster Farmers’ Union president Ian Marshall said “These grim income figures are a body blow for farming families – but they are also a body blow for the entire Northern Ireland economy. Almost £130m was taken out of the rural economy. That is money that would have been spent locally, meaning towns and villages across Northern Ireland will have felt the impact of hard times hitting the farming community.” 

Ulster Unionist agriculture spokesperson Jo-Anne Dobson said the figures demonstrated the seriousness of the crisis: “Very few people in Northern Ireland would be able to tolerate a 41% wage cut, but yet that is what our local farms have effectively been hit with”. 

In Britain as she says, the sheer scale of the collapse in farm incomes offers a stark warning that each administration’s department of agriculture should – however belatedly – intervene to address the damaging impacts of unfair prices from processors and retailers. 

For more information go to the Gosling Report. ‘On the eve of destruction’.

 

 

 

Progressive Protectionism, Colin Hines – summary relating to food security

colin2-book-coverLocalised and secure labour intensive production would return a sense of hope for the future and economic security for the majority.

Decentralised infrastructure projects would focus on a decades long, multi skilled programme of energy refits of millions of dwellings, a shift to localised renewable energy and food production and building efficient local transport and flood defence systems.

In a sustainable system, would not each country aim to produce its own staple food? Surpluses and exotics could be exported, speculation in food by unproductive middlemen would be outlawed and vitally important food producers encouraged at every turn.

At present the UK can only feed around 60% of its population of 65 million, let alone the 8 million more projected in the next 15 years. In 2014 the UK supplied just over half (54%) of its food supply. The EU was by far the next largest supplier at 27%. It is clear that we depend on Europe to keep ourselves fed. The distribution of UK imports from Europe has changed relatively little over the last 15 years.

The UK’s food vulnerability could worsen for a number of reasons. The global availability of the food supplies that the UK at present imports could be dramatically reduced, due to rapidly rising global demand, particularly from Asia; or increased domestic demand from food exporting countries; or if we are unable to afford whatever the global prices might become.

These threats can be reduced, but are unlikely to be totally avoidable, even were the UK to increase enormously its present levels of food production, significantly cut food wastage and dramatically change its eating habits, eating far less meat.

Pressures on the UK’s food security are here to stay. As a big importer of food we can’t escape the threats posed by its future price and availability, caused by the increasing global population and rising affluence of sections of the world. As a food trading nation, Britain relies on food imports to feed itself and adequate exports of food and other goods and services to pay for these.

If exports reduced, reliance on global borrowing or tax increases would increase to cover the gap. This assumes that there will be adequate surplus food on the global market to meet our import needs.

food-miles-to-britain

Click for clearer picture – source: http://www.coolgeography.co.uk/A-level/AQA/Year%2012/Food%20supply/Changes%20in%20food%20supply/Food%20Miles%20Britain.png

The highest proportion of food and drink waste in the food chain occurred in households with 7 million tonnes being thrown away in the UK in 2012. Manufacturing contributed the second largest proportion of waste, at 26% (3.9 million tonnes), followed by hospitality with 6% (0.92 million tonnes).

A 2007 study ‘Can Britain feed itself?’ by Simon Fairlie estimated that it could, but that the dietary changes would be significant including far less meat consumption, feeding livestock upon food wastes and residues; returning human sewage to productive land; dispersal of animals on mixed farms and smallholdings, local slaughter and food distribution; managing animals to ensure optimum recuperation of manure; and selecting and managing livestock, especially dairy cows, to be nitrogen providers.

Colin adds that in the absence of supplies of imported rock phosphate, phosphorus rather than nitrogen might become the main constraint upon crop yields, in which case we would have to ensure rigorous recycling of animal manures, human sewage and slaughterhouse wastes. These measures demand more human labour, and more even dispersal of both livestock and humans around the country.

elm-farm

In a paper on the subject, Lawrence Woodward of the Organic Research Centre (Elm Farm, above) says:

“What are the technical problems involved in (feeding the world) organically? There are no really significant ones in the developed world. Of course there is room for improvement – for example weed control techniques could be better, progress can still be made on certain disease problems such as finding more blight resistant potato varieties – but there are no technical obstacles that would prevent organic farming producing enough food in the developed world. Just as long as it is not expected to maintain the chicken at 36p per pound type of diet.

“The obstacles to organic farming are economic and are governed by policy. Where this is sympathetic as in Germany and Denmark, a significantly large switch from conventional to organic production can occur without major difficulty.

“In resource poor countries organic farming, with its emphasis on biological Nitrogen supply, on maintenance and enhancement of organic matter, and on soil and water protection, is arguably the most appropriate farming system and the most sensible approach to feeding people”.

(Colin continues) I am a huge fan of most of the work of Global Justice Now. Their proposals are that foreign aid should be used to build up decent welfare states, sustainable public transport systems, environmentally friendly energy access for all. It should also support small-scale farmers producing healthy food primarily for themselves and local communities, and to help cooperatives and small business to produce for local and regional markets.[77]

The World Trade Organisation (WTO) Agreement on Agriculture would be changed under the World Localisation Organisation (WLO):

wto-and-poor

The vision expressed by the WTO agreement is of an integrated global agricultural economy requires that agricultural commodities be transported long distances, and be processed and packaged to survive the journey. When account is taken of all energy inputs, global food production and trade probably consume more fossil fuel than any other industrial sector. Thus international agricultural trade policies are likely to substantially increase greenhouse gas emissions and make climate objectives much harder to achieve.

Under the WLO all countries would be encouraged to reach maximum self-sufficiency in food. They would only export and import for the end goal of helping move towards maximum sustainable local production, whilst fostering rural regeneration. Trade in food which cannot be grown domestically should be obtained where feasible from neighbouring countries. Long-distance trade should be limited to food not available in the region. Those countries providing food exports should use the funds to increase their own level of food security and in a way that benefits rural communities.

Colin Hines:

https://en.wikipedia.org/wiki/Colin_Hines   

http://progressiveprotectionism.com/wordpress/

 

 

 

 

 

Seeking food supplies from Turkey and Morocco?  Time for change!

On BBC Radio 4 today it was reported that some supermarkets are limiting sales of fruit and vegetables.

veg-2shortage

A newspaper elaborates: “Morrisons and Tesco have limited the amount of lettuce and broccoli after flooding and snow hit farms in Spain. Shortages of other household favourites – including cauliflower, cucumbers, courgettes, oranges, peppers and tomatoes – are also expected. Prices of some veg has rocketed 40% due to the freak weather. Sainsburys admitted weather has also affected its stocks”.

HortiDaily reports on frost in Europe in detail (one of many pictures below) and the search for supplies from Turkey, Morocco, Tunisia.

snow-2spain

A former Greenpeace Economist foresees these and more persistent problems in his latest book, Progressive Protectionism.

Colin Hines reminds us that in 2014 the UK supplied just over half (54%) of its food supply. The EU was by far the next largest supplier at 27%. It is clear that we depend on Europe to keep ourselves fed. He adds:

“At present the UK can only feed around 60% of its present population of 65 million, let alone the around 8 million extra projected in the next 15 years. The UK’s food vulnerability could worsen for a number of reasons. The global availability of the food supplies that the UK at present imports could be dramatically reduced, due to rapidly rising global demand, particularly from Asia; or increased domestic demand from the countries that we at present import from; or if we are unable to afford whatever the global prices might rise to”.

And, presciently, “the threat to UK food security could be more serious should increased global demand combine with other potential problems such as climate change”.

govt-ccc-header

A 2013 report from the UK government’s official climate change advisers warned that droughts could devastate food production in England by the 2020s. Hines advises: “The answer has to be to heed the Sustainable Development Commission’s call ‘to produce more food from less land and to eat differently, specifically to eat more plant-based foods, less meat and dairy, and to waste dramatically less”.

To this he adds the need to halt as rapidly as possible the UK’s population growth, by curbing present levels of migration and reducing it to more sustainable levels, bearing in mind the numbers we will be able to feed predominantly from our own resources.

Finally he focusses on another area of import dependence.  A 2007 study, ‘Can Britain feed itself?’ by Simon Fairlie, estimated that it could, but that the dietary changes would be significant, “including far less meat consumption, feeding livestock upon food wastes and residues; returning human sewage to productive land; dispersal of animals on mixed farms and smallholdings, rather than concentration in large farms; local slaughter and food distribution; managing animals to ensure optimum recuperation of manure; and selecting and managing livestock, especially dairy cows, to be nitrogen providers”.

Time to ‘retool’ our provisioning?

“UK agriculture is also reliant upon imported energy, fertiliser, seeds and machinery. So should the availability of such imports become limited because of purchase by more affluent countries, or were we to become unable to afford to purchase such imports in the quantities required, then our domestic agriculture itself would be deprived of such essential inputs”.

And, essentially,  give our food producers – from farmers to small-holders – a fair price covering costs of production plus.

 

 

 

Taking back control of the agricultural economy

Former Conservative MP Matthew Parris asks, “Is ‘food security’ still an imperative for this 21st-century country long unable to home-source many of the other mainstays of our economic life? Why, post-CAP, should we despoil East Anglia and plunder Treasury coffers for fear of relying on Canadian wheat or West Indian sugar?

We all need to take a view on the texture of the rural Britain we want to sponsor, the size, type and location of the farms we want to support, the agriculture we want to see there.

Hill farming on sloping ground. in places rocky, often marshy and reedy, everywhere wet, exposed and windy, and with poor-quality soil whose agricultural use is only grazing. Nearly half of hill-farmers’ income comes from CAP subsidies. For them it’s the foundation of what still amounts to scraping by: they really are just about managing. Ministers guaranteed during the recent referendum campaign that this bedrock would not be disturbed until 2020. Beyond that there are no promises.

Governments cannot strike out in a new direction as suddenly as could an individual like me. Farmers and local businesses have invested whole lives in what they expect, and cannot take too much uncertainty about the future. Nor should the English countryside become just a forest, or a leisure park.

But sometimes there comes a chance to tweak policy gently but decisively in an altered direction, so that things begin to change, giving people time to change too. Could Brexit help us take back control of this at least?

Here are two questions to which I may not know the answer, but we should ask — at least because the compass must anyway be reset by 2020, and I think the Defra secretary, Andrea Leadsom, knows something needs to be done.

Her farming minister, George Eustice (another dedicated Leaver) has struck me as a man prepared to think outside, if not the box, the cowshed: he’s been talking sparkily recently about Britain’s chance to lead the way in land-stewardship and compassion towards farm animals; and on new approaches to underwriting this part of our economy.

Only a monster would deny there should be CCTV cameras in slaughterhouses; but chicken factories, cow prisons, industrial wastelands and giant system-built housing estates are on the march across our countryside.

Brexit is a chance for Britain to reshape its farming subsidies in ways that protect the land and use it more intelligently

There’s money here, and money talks, and ministers must stand up to it. Taking back control shouldn’t be from Brussels alone.

Edited extracts from the Times article (paywall)