Will Corbyn/Labour’s industrial strategy guarantee fair production costs for perishable food – or rely on the global market?
“It is simply not right that any worker should have to sell their product for less than it costs them to produce them, and this is acutely felt by dairy farmers.”
Countryfile, reviewing Jeremy Corbyn’s “Rural Renewal” report, continued to quote: “A combination of a small number of very large milk processers operating as suppliers to retailers, supermarkets operating a ‘price war’ forcing down the cost of milk, and milk co-ops losing their power has resulted in thousands of dairy farmers finding it harder and harder to make ends meet, let alone make a profit.”
Corbyn said “we will work with all parties to ensure that customers are offered a price they can afford for their milk, but not at the expense of farmers whose very livelihoods depend on it. This will include investigating regulating supermarkets to prevent below cost selling.”
Factories don’t sell their products at a loss, but those producing perishable food are often required to do so. It’s so easy to put pressure on those producing perishable food: fresh milk, fruit and vegetables, who have to sell quickly – in effect holding them to ransom.
Seven years ago Telegraph View pointed out that some supermarkets pay less for milk than it costs to produce. Nothing has changed! Prices sometimes drop to the 1990s level but all other costs have risen steeply.
Confidence in successive governments continues to fall as the country has become increasingly dependent on imported food – which now even includes tomatoes from Morocco and eggs and poultry from Israeli settlements in the occupied Palestinian territories.
A Fairtrade Policy Director noted that ‘The unpleasant and aggressive tough love lobby’ which has cut social and healthcare, education and public transport doesn’t spare family farmers
Corbyn on a Cumbrian farm, pledging to do “everything necessary” to stop no-deal Brexit carnage for famrers
No thoughts of love – or natural justice – appeared in the Oxford Farming Conference address of Liz Truss, Secretary of State for Environment, Food and Rural Affairs, who blamed the ‘difficult world market’ for low milk prices and focussed on farming’s ‘huge export potential’, rejoicing that ‘we now grow chillies which we export to Pakistan and Mexico’.
Barbara Crowther (right), by far the best Fairtrade Foundation Director of Policy & Public Affairs (2009-2017), said “There is a very unpleasant and aggressive tough love lobby out there who simply do not understand the importance of locally sourced food and the underlying food security issues which are only going to get worse as the global population grows”. She asked “Could we make our Mark work on milk?”. This link to that (now unwelcome?) reference has been removed.
It’s a fair question and is something that has been looked at, and discussed many times – not least as part of a ‘Local and Fair’ conference a few years ago, bringing Fairtrade and Cumbrian farmers groups together to discuss the issues they hold in common, co-ordinated by Joe Human (see Barbara in video at that conference).
MP Anne McIntosh (below, who chaired the parliamentary Environment, Food and Rural Affairs (EFRA) Committee, for several years, urged the Government to intervene, after it was reported that 60 dairy farmers went out of business in one month alone. EFRA wanted the Groceries Code which covers suppliers to the big supermarkets and retailers, to be extended to include dairy farmers – but soon afterwards, the estimable Ms McIntosh was deselected. Now in the Lords she is campaigning for the farming interests threatened by Brexit
The Royal Association of British Dairy Farmers insists that all supermarkets could pay dairy farmers a price for milk that would meet the cost of production without increasing the price charged to the consumer: they would just need to accept a slightly lower profit on the milk they sell.
Placing the issue third after Angora goats and use of level crossings, the BBC, in a video link no longer working, gave priority to the destructive comments of the establishment economist, Sean Rickard.
Apparently unaware of economic interdependence – the knock-on effect to other industries and the rural economy – Sean Rickard tells farmers that if they can’t manage under these conditions, ‘they should give up making milk and live off the subsidy’.
In fact, as Clitheroe dairy farmer Kathleen Calvert often points out, the whole rural economy is affected as farmers lose income. Each working dairy farm returns a huge amount of money back into the wider economy, supporting many other regional businesses, and therefore helping to provide jobs for many. Each dairy farm that ceases to trade has a knock-on effect on the surrounding community and the economy, due to a loss of income to many other businesses. From press release, link no longer works. Instead see a briefer reference in Lancashire Life.
The key message “We are losing hold of a vital skills base at an alarming rate as dedicated dairy farming families are no longer financially able or prepared to work at a continual loss. We believe that many milk buyers gamble with the continuity and security of the UK milk supply by keeping much of the profit further up the market chain. Despite varying business structures and the importance of food production, most farm gate prices are now lower than production costs. This has a knock on effect on a wide range of other businesses and livelihoods of countless people involved, ultimately leading to pressure on incomes”.
Dairy farmers are compelled to pay a levy to DairyCo/AHDB, a body set up by government, which, consultant Ian Potter (above right) notes, has received – and spent – more than £1 million extra as a result of the increase in production. He asks: “But on what? Cynics say it spends the money on encouraging more production because that generates more levy money for it…and so on!” He continues: “In my opinion we now need a campaign to promote the buying of British dairy products using British milk . . . I have heard one Tesco farmer would prefer to give his levy to Tesco if he could to help it promote British milk. That makes sense to me if DairyCo won’t!”
Meanwhile food imports rise and government ministers advise hardworking farmers to place their ‘commodities’ on the global market so that unproductive internet bound speculators can ‘make a killing’ – nowadays more often crouched over their computer screens.
As supermarkets insist they give a good price to the middlemen – processors – both deny responsibility for the fall in average price farmers receive for a litre of milk in the UK by about a quarter to 23p from almost 32p in mid-2014 – see today’s Financial Times. The FT continues: “About 260 of the UK’s 12,000 dairy farmers have sold their herds since January . . . many farmers are ‘out of pocket’ with the cost of production averaging about 30p a litre”.
Speak out at your peril
In January a linked site reported that, as 60 dairy farmers went out of business, the parliamentary Environment, Food and Rural Affairs (EFRA) Committee, chaired by Anne McIntosh, urged the Government to intervene. It wanted the Groceries Code which covers suppliers to the big supermarkets and retailers, to be extended to include dairy farmers.
She was deselected.
State radio debunks the issue; EFRA minister Liz Truss, let them grow chillies, natural justice not on the agenda
No thoughts of natural justice appeared in the Oxford Farming Conference address of Liz Truss, Secretary of State for Environment, Food and Rural Affairs, who refers to ‘the huge export potential of this industry’ and rejoices that ‘we now grow chillies which we export to Pakistan and Mexico’.
Placing the issue third after Angora goats and use of level crossings, the BBC gives priority to the destructive comments of the ‘sympathetic’ corporates’ economist, Sean Rickard, who tells dairy farmers that if they can’t manage under these conditions, ‘they should give up making milk and live off the subsidy’.
Arla processor blames the global market
Ash Amirahmadi, head of milk and member services at Arla, dairy middleman, dismissed attempts by the NFU to target retailers’ margins and blamed the farmers’ plight on the drop in the global milk price.
The knock-on effect to other industries and the rural economy
The Western Morning News reports that in an interview for BBC Radio 4’s On Your Farm programme, Princes Charles said: “I happen to think the small farmer, the smallholder, is absolutely crucial to the maintenance of food security . . .”. Jeremy Corbyn agreed: “There are some big issues to be tackled about how big supermarkets squeeze small farmers, and how this can knock on to the wages of agricultural workers or producers in sectors such as the baking industry . . . it is clear that something needs to be done to make sure that supermarkets pay fairer prices to small farmers without passing that on through higher prices for consumers.”
In fact, as a Lancashire farmer often points out, the whole rural economy is also affected as farmers lose income. Each working dairy farm returns a huge amount of money back into the wider economy, supporting many other regional businesses, and therefore helping to provide jobs for many. Each dairy farm that ceases to trade has a knock-on effect on the surrounding community and the economy, due to a loss of income to many other businesses. See press release.
Producers of perishable milk fruit and vegetables should learn from industry and combine
Factories do not sell their products at a loss, but those producing perishable food are often required to do so. Will vulnerable food producers ever learn from industry and combine? And would Jeremy Corbyn be prepared to enable and support this?
If not, what hope is there for those who produce perishable food?
Do governments “callously and deliberately neglect” food producers to avoid alienating corporate party funders?
Ms Truss, the Secretary of State for Environment Food and Rural Affairs, says British farming is one of the Government’s key successes – though farmers are taking their own lives at a rate of one a week, according to many sources, though officialdom is reticent about this.
The Times of India reports that Maharashtra’s farmer suicide count in the six-month span from January to June this year stood at 1,300 cases, the state’s revenue department figures show.
Respected analyst Devinder Sharma points out that indebtedness and bankruptcy tops the reasons behind these suicides; followed by family problems and farming related issues. In both countries the authorities try to evade the real issue and blame the availability of shotguns, pesticides and so on.
Snapshots from a presentation to the UN summarises the real reasons:
British and Indian governments daren’t offend the party funding middlemen and corporate end-buyers who – without lifting a finger – profit from the food produced at the expense of the hard-working producers who are often obliged to sell at a loss.
More respect from the new Greek government
At least – the Financial Times points out – in Greece, Syriza is allowing some leeway to those producing the most essential goods. They are refusing to increase the financial burdens on farmers, who at present pay 13% per cent income tax, compared with the general 25% rate, and receive special treatment for fuel and fertiliser expenses.
With 12.4% of the country’s labour force employed in producing food and cotton and a thriving fishing industry, the new Greece government is showing some grasp of essentials and priorities – would that the British and Indian governments showed similar respect for their most important workers.