NFUS chief in warning over food price cap

The proposed introduction of a voluntary retailer food price cap has been roundly criticised by Martin Kennedy, NFU Scotland’s president, who says such a move would risk putting primary producers under “further pressure”.

“It was extremely worrying and disappointing to hear proposals emerging last weekend of a voluntary price cap on food,” he said, adding that the issue was not raised or discussed during the recent farm to fork summit at Downing Street.

Warning that a price cap would have implications for farmers, despite being aimed at the retail chain, the president voiced “genuine fear” on behalf of primary producers.

Claiming tight margins and very high input costs were already causing extreme losses for some food commodities, he stressed there was no room for any more pressure – such as that linked to a voluntary price cap – which could lead to further farm sector contraction.

“We have already seen that happening in our egg sector and our fruit and veg sector is also under severe strain because of high costs associated with labour and energy,” said Mr Kennedy.

“In the past month, every major retailer has already cut the retail price of milk and butter and that is working its way back to the farmgate for dairy farmers. It is also working its way into the retail inflation figures.”

Mr Kennedy warned that calling for a voluntary cap on shop prices for some food staples, while denying higher levels of energy relief for those who grow, store or rear produce, were policies running contrary to each other and would simply risk a further reduction in farm-based production.

He also said the cap would make food scarcity “more inevitable”.

Clearly annoyed that talk of a voluntary cap emerged just a fortnight after the Downing Street summit, meant to bolster the nation’s food security, he urged Prime Minister Rishi Sunak to rethink the proposal.

“If the prime minister is serious about supporting UK agriculture, he must at least make it abundantly clear any enforced price cap must have no impact on the opportunity for farmers and crofters to get a fair return for the food they produce,” he said.

“Fairness in the supply chain is something that the prime minister says he wants to see and the investigations into pigs, eggs and horticulture support that.

“Fairness starts by supporting and fairly rewarding those at the sharp end to maintain supply.

“As we have seen with eggs, fruit and vegetables, if there’s no supply due to a lack of profitability, then the rest very quickly falls apart and empty shop shelves become a reality.

“We will be writing to the prime minister to make clear these points.”

CONCERNED: Martin Kennedy said the issue was not discussed at the recent summit.