Cheap food era is over – but supermarkets won’t accept it
I HEARD a farmer in an EU member state claiming recently that the days when the CAP was about creating a cheap food supply are long gone.
His point was that thanks to changes and cuts to support structures, these no longer allow farmers to deliver food below the cost of production. He argued that farmers understood this, and that thanks to the farm protests in Europe, consumers were getting the message. His frustration was that the only group not accepting the cheap food era is over are the major retailers, still demanding lower prices despite rising costs on farms.
His point is as relevant in the post-Brexit UK, with its green support policies, as it is in any EU member state with a still more generous CAP. The frustration around this was underlined by Tesco announcing a surge in profits, putting this down to ‘easing price pressures’
‘Society would be better off if we could again find a relationship between what is happening on farms and prices on supermarket shelves’
along its supply chain.
Many farmers interpreted that as a reflection of the price pressure exerted on suppliers, with farmers the weakest players and so unable to resist this price pressure. The EU says it is committed to greater fairness in the food supply chain and is developing new policies, as part of its multipronged response to the recent farm protests.
The government at Westminster has talked of the need for greater fairness, but unlike Brussels it is showing no signs of turning easy words into firm policies.
This is all the worse now because of the weather. Retailers are still pressing for price cuts despite the financial crisis on farms.
They want to be seen to be helping consumers through a now perceived rather than real cost-of-living crisis. It may be controversial to say that, but the rate of inflation is now back in its ‘normal’ zone and farmers cannot be expected to solve a cost-of-living crisis people claim is happening on supermarket shelves by delivering quality food below the cost of production.
Consumers should be looking at the profits being made by retailers and questioning these, rather than seeking to blame farmers for the end of the cheap food era.
What the food industry needs is a culture change, so that prices reflect more accurately the reality of producing food in truly appalling weather conditions. It is galling for farmers to see food being sold cheaply by retailers, even if they are taking some of the financial hit, when farm costs are going through the roof. Society would be better o in every way if we could again find a market relationship between what is happening on farms and prices on supermarket shelves.
Until that happens all that life promises farmers is a relentless squeeze on margins as retailers try to force the industry back into a cheap food era without the financial support that was there before. The UK farming lobby has chosen to reject European-style farm protests. It believes this is the right approach and it is certainly true there is less of an appetite here for mass protests than is the case in Europe. We are also some months away from a General Election while Europe is in the run-up to the June elections for the European Parliament.
This has brought a new focus to concessions to farmers which is proving very welcome and meaningful, with their case boosted by a determination in Brussels to head o the destabilisation that would come from a surge in support for the far right. By contrast, it is a fair bet here that farming, food and food security will not even make it onto the agenda for the General Election, or indeed as an issue for the next government, whichever of the major parties wins that contest.
It is always hard to know when there has been a sea change in policy. Here the government remains committed to a green agenda, based largely on policies from Europe it retained aer Brexit. Come the election both parties will promise more of the same. By contrast, according to the Politico news organisation quoting a leaked EU document, green is no longer key EU priority.
In its stargazing on future policy direction, the big issues to the end of the decade are security, migration and defence. Climate change gets a passing mention, in contrast to five years ago when it and the Green Deal were the biggest policy drivers.
Realism and pragmatism are dawning in Brussels, but not it seems at Westminster.