Teddy Cashman: The food chain is broken if farmers aren't getting a fair deal
Published 25/08/2015 | 02:30
The food chain is broken.
The pressure on milk producers to provide a stable supply of a quality product is too much.
The focus on milk prices at the moment should be a wake-up call for retailers, processors and politicians. We need to restore equity to the food supply chain if farmers' incomes are to recover.
I milk cows 365 days a year to guarantee shoppers that fresh milk will be on their shelves every day. Working in winter time means extra costs for my business. The problem is that retailers appear to be blind to this.
They expect me to deliver for them, but they won't return a fair price. We have seen the farmers' share of the price fall and it is not sustainable. Retailers continue to squeeze processors, and farmers further down the chain, without any regard to the fallout.
What is happening in the UK at the moment could easily happen here. Farmers have been pushed to produce more and take on extra costs. When the price fall came, the retailer was nowhere to be seen.
The notion that specialist farmers will continue to work year-round is dangerous. We have a dedicated cohort of producers who pledge to supply fresh milk to consumers. We have seen other countries realise, too late, the problems that are caused by failing to support local suppliers.
Farm ministers will meet in emergency session in Brussels next month. Short-term measures are needed, but they will also have to address the food chain. That means strong regulation that levers a higher share of the price for producers. This doesn't have to come from consumers.
In response to pressure from farmers, the UK retailer Morrisons has decided to increase the price of a four-pint carton of milk by 23p. The deal is that farmers get 10p of this, less than half. It's a cop-out by the retailer and they shouldn't get away with it. This is a gimmick designed to deflect from the root problem.
As the dominant player in the chain, Morrisons calls the shots. Effective regulation will have to re-balance the share out of the price that values the work of farmers.
As it happens, I believe shoppers want local food producers to stay in business. They know the benefits of having neighbours supply their food. Retailers here won't be thanked for trying to copy Morrisons.
We have retail regulation here, but it's not effective enough. The three main players control over 75pc of the market. Farmers will want to see a tougher approach from the Government.
* Teddy Cashman is chairman of IFA's Liquid Milk Committee