UK dairy farmer reflects: “the army of consultants and advisers can walk away leaving producers to pick up the financial pieces”

 

Coverage of advisers and consultants on this site to date has included posts called: Consultancies: a viral pandemic and The ultimate corporate-political nexus: McKinsey, ‘Jesuits of Capitalism’, and Her Majesty’s Government.

 

The dairy farmer remembers that Jim Begg, Dairy UK’s Director General, advised that the future for Dairy was bright. This encouraged many progressive family farmers to invest in the future of the UK Dairy Industry. They then found the rug pulled from under them as Mr Begg failed to encourage processors to invest in gaps in the UK market preferring instead to pocket producers’ income to cover weak selling and prop up their losses, steadily asset-stripping from efficient and well invested small and medium sized dairy farm businesses across the UK. This impacts heavily on the wider rural economy as farmers battle with cash flow, lacking reasonable income from the supply chain to pay essential bills and replace essential kit.

Though the market was in the producers’ favour, UK farm gate prices languished at the bottom of the European price league tables, while the fun-loving Mr Begg dallied in foreign places with his “European counterparts” who swiftly filled the gaps in our valuable market and have raced ahead of the UK globally. Has Mr Begg used cover of Dairy UK to hand UK dairy farmers business on a plate to Europe while ensuring his own “global” position advising an Australian organization similar to Dairy UK how to run their operations, and evaluating economic surveys for the worldwide dairy industry etc?

In an unstable supply chain where financial power leans heavily in one direction, and one maximises their margins by denying another other of income, the army of consultants and advisers can walk away leaving producers to pick up the financial pieces.

Retailers must pay a fair price for all their dairy produce with a fair amount passed back to producers

Mr Begg implies when considering regulation or free market, the priority is not ensuring sustainability but becoming rich. He also says we have to remain unswervingly with the focus that we are a consumer, and not a production, led industry.

We are neither. Uninformed consumers are led by extensive retailer PR into buying whatever retailers choose to supply them. Contrary to what we are led to believe, large retailers do not practice fair trade, and where the pied piper led, the unsuspecting willingly followed.

Farmers must specialise within the supply chain in looking after their animals and their farms and producing milk. Any value must be added by specialists at the processing stage, and the retailers must pay a fair price for all their dairy produce with a fair amount passed back to producers.

With Mr Begg at the helm, retailers will always manage to retain excessive margins

UK producers are seeing the worst farming conditions for many years, with appalling summer and autumn weather, milk yields and cull cow prices plummeting as winter feed supplies are scarce, prices are sky high, the suicide rate is the highest of any other sector, work related injuries have increased, and RABI reports steep rises in producers suffering financial difficulty with spiralling costs and cash flows under incredible pressure.

What became also of the cool, rational debate that Dairy UK talked of when Mr Begg’s resignation was called for? Like a true professional he laughed it off and ridiculed his critics in the same way he smiles yet throws his dummy out whenever anyone dares disagree with him.

Corporates control of the lucrative dairy supply chain; while publicly proclaiming support for UK dairy farming, retailers:
  • take advantage of voluntary adjudication,
  • threaten weaker processors with breach of contract as milk supplies plummet,
  • divide and rule producers,
  • and increase retail prices to consumers, fixing blame for the rises on UK producers while having paid no more for already contracted supplies and thus forcing another invisible cap on prices paid to non-aligned producers.

If steadfast UK non-aligned dairy farmers and smaller processors are forced out of business the corporates will have total control of the lucrative dairy supply chain and remaining “dedicated suppliers” will be left to face the inevitable squeeze. The milk that draws consumers will likely become a luxury item for most while available at a price, albeit still the lowest, in large supermarkets.

However much the public prefer celebrity to reality, and want high-welfare, well-maintained and professionally managed farms, it does not leave efficient non-aligned UK farmers on a level playing field with countries where production standards and major costs such as land, labour and energy may all be much lower, and it does not pay the bills.

Highly paid adviser runs no risk, unlike producers

Mr Begg, with no risk or financial investment required, commands a salary and lifestyle far removed from that of the producers he represents, often appears to undermine them and others who speak out in support of producers, in his weekly blog.

Collaboration seriously damaged the producers’ interests

He says collaboration, and not confrontation, will definitely win in the end, extolling the virtues of TV celebrity advice not to ‘fan the flames of controversy. But if producers and consumers had kept not their commanders and generals on their toes by gently fanning the flames of controversy in their direction, instead of allowing them to collaborate so brazenly with the giant corporates for so many years, we may not now be faced with the back draft that resolute UK dairy producers are now fire fighting.

The dairy farmer’s conclusion:

Continued support from the Dairy Coalition, the farming press, allied trades, other supporters like the WI, and outspoken individuals is vital if we are to beat the raging fire that threatens to destroy our UK dairy industry.

Will they be successfully undermined by those organisations or individuals like Mr Begg, Dairy UK, or Promar who may well have their own or conflicting interests uppermost?

In the interests of the country’s food security and the rural economy, we hope not.

 

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Posted on November 18, 2012, in Corporate political nexus, Democracy undermined, Government, Lobbying and tagged , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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