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Is the government export drive a good approach? Is its levy board, DairyCo, working in the best interests of the food producers compelled to fund it?

The ‘elephant in the room’ very few ever mention: unfair trade prices – though we hear that when the new Shadow Minister for Farming and Food is confirmed in post, one of his/her first tasks will be to look into the urgent need for farmers to get a fair deal for their milk.

FAO food price index‘Collapsing food prices’ were reported in the Telegraph -September, according to the FAO’s Food Price Index, which tracks wholesale prices of key foods. This is bad news for British farmers, many of whom are already being paid near or below production cost, which could force many to increase levels of borrowing this winter – or go out of business.

However, this basic cause of farming problems is ignored by vested interest dominated media and politicians, who point to energy prices, the need to export and global food oversupply – all less important factors than the farmgate price of food, to those producing for the domestic market.

A year after the 2013 dissatisfaction reported in the press, milk producers were asking for their levy money, imposed by law on dairy farmers, which funds almost all of the activities of DairyCo/AHDB, a body set up by government, to be used to provide information and resources to help support their businesses. This call is coming again, from several quarters.

Would AHDB Dairy pass a school-type inspection?

tfa2 logoThe Tenant Farmers’ Association (TFA) have issued a press release headed “Dairy Sector needs much improved levy board”, challenging the performance of AHDB Dairy (aka DairyCo) asking how it delivers value for money with the £7 million of farmers’ money given each year. This followed a recent meeting in which the TFA commented “if this was a school inspection our findings would be that AHDB Dairy required improvement and in areas was inadequate. We need to see a much improved board as soon as possible.” The full press release is interesting, click on

http://www.tfa.org.uk/tfa-media-release-no-26-dairy-sector-needs-much-improved-levy-board/

“The Board must be properly accountable to the dairy farmers who pay it not Government Ministers,” said TFA National Chairman Stephen Wyrill.

A ‘high-profile figure, quota broker and industry commentator’, Ian Potter, wrote that discontent among farmers over DairyCo had been brewing for months. In an Ian Potter Associates e-newsletter, he said emails from levy payers had been “flooding in” complaining about how their money was being spent, adding that all except one had called for “a change of direction and/or much more accountability”. DairyCo, which, Mr Potter recently noted, has received more than £1 million extra as a result of the increase in production, has already had AND SPENT the extra money. 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!”

Ian Potter Associates header

Ian Potter states: “In my opinion we now need a campaign to promote the buying of British dairy products using British milk” – but DairyCo told the Radio 4 Farming Today Programme on the 13th August that it can’t promote British dairy products.

He ends: “I think farmers will want to know exactly why that is. 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!”

The NFU

guy watsonA farmer sent a link to a 2014 Farming Online article criticising the NFU and added the comment: “the NFU support big business too readily”. In it, farmer Guy Watson accused the country’s largest farm union of forming an “unholy alliance” with agrochemical manufacturers, and failing all but a small minority of large farmers, in a blog post and newsletter sent out in November. He said that he was increasingly alienated by the NFU’s ‘self-righteous lobbying for the short term interests of a small number of largescale farmers and their resistance to even the tamest environmental regulation, to public access to land and to any redirection of farming subsidies to encourage younger, smaller scale entrants to the industry’.

A Lancashire dairy farmer writes, “I have just come across this 2014 report, ‘Leading the Way’, among all the Dairyco info I have collected and to me it highlights all that is going wrong in our British Dairy Industry”.

dairy report KCThis simplistic ‘Leading the Way’ report – amazingly lacking in substance – is available for download here. It states that an estimated 2.5% annual growth in global demand for dairy products over the next ten years will boost UK dairy production through increased exports and imports substitution.

Farming minister, George Eustice MP, said: There is huge potential for our dairy producers with growing international demand and a global reputation that is second to none. The government wants to support growth in the industry and ensure that we can both displace more imports and expand our exports.”

So as the call for fair trade prices is ignored and food imports – often of questionable quality – rise, government ministers, DairyCo and the NFU advise hardworking farmers to risk placing their ‘commodities’ on the global market so that internet-bound speculators can ‘make a killing’.


Note next week, Northern Ireland food producers and politicians meet

Accomplished farmer-negotiator, William Taylor, sends news of a meeting next week. One politician from each political party, including Independents, has been invited to come along, give their views on beef, cereals, lamb, milk, pigs, potatoes, poultry, vegetables, followed by a question and answer session.

This meeting will concluded with an explanation of the blueprint for Northern Ireland agriculture proposed by the above supporting farm organisations, which if put into legislation by Stormont would return Northern Ireland farmers a minimum of the cost of production plus a margin inflation linked across the staples and turn Northern Ireland from austerity and crisis to prudent prosperity.

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‘Smoke and mirrors’: the true picture for British farming prospects distorted as electioneering intensifies

As ministers trumpet the great export potential of British produce, official records are hard to come by. The link to the November Commons EFRA debate does not open and the publication link [below] also does not respond:

handley efraIs this because the true picture  doesn’t sit well with electioneering?

The outlook is bleak for British farmers who don’t have the largest holdings, and who produce perishable foods which can’t be stored until prices rise.

However, thanks to the farming press and correspondence from a dairy farmer, some information is available – and significant.

It is reported that the dairy sector is in a desperate state. MPs have been told that farmers are being paid less for milk than the cost of production. Over four hundred milk producers quit the business in 2014, compared with 200 in 2013.

ffa efra videoGiving evidence to the Environment, Food and Rural Affairs Select Committee – 25/11/14 – the chairman of Farmers For Action, David Handley, said:

“The situation is getting so serious that in the last nine weeks we’ve passed three individual dairy producers on to the Samaritans because they were in such a desperate state and the full impact isn’t yet being seen.”

A link to the video on FFA’s website has been received; to open this go to http://www.farmersforaction.org/8.html

George Dunn, chief executive of the Tenant Farmers Association, whose critique of government’s Groceries Code Adjudication process is well worth reading, commented: “This is a horrendous time… We are losing family farming. We have valleys which have had 20 dairy farmers where we have none any more.”

The committee heard that the supply chain needed to be subject to greater scrutiny.

food supply chain diagram

Mr Handley said that the money between the processor and retailer needed to be tracked: “We need to have some honesty and transparency. There is far too much smoke and mirrors. Unless we get proof that global markets are affecting the domestic price then we will continue to blockade”.

george dunn2Is the idea that the prices of milk in the supermarket would rise a ploy to antagonise the public?

Mr Dunn [right] explains: “The question we have been asking is, ‘Where does the money go?’ We might not need to have a higher price, just that we need a fairer share of the market.”

Mr Handley disputed claims that the price cuts were down to global markets, saying: “We find it very suspicious when we are being told that it is [due to] oversupply when 85% of our milk never leaves these shores.”