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http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2005/11/03/do0302.xml&sSheet=/opinion/2005/11/03/ixop.html

Farmers' strike? It's a rotten business

By Charles Clover

(Filed: 03/11/2005)

There is something a trifle annoying about the idea of a farmers' strike however much one may care for the countryside, or for the plight of farming. A farmer is both worker and the boss, so it is difficult for him to strike against himself. Even if he is just a farm worker, he can't very easily take the day off and leave the cows unmilked without bringing misery to his livestock and ending up in court for neglect.

Yet who can claim that their semantics have never become tangled at an emotional moment? Who can doubt that in the self-inflicted pain of the three-day "farmers' strike", organised by Farmers for Action, there is a note of desperation that is unnerving? Whether one is a simple shopper, one of those well-remunerated people in the boardroom of a chain of supermarkets, or a minister at Defra, it is time to watch that milk being poured away and to reflect.

Dairy farmers are desperate because their anguish has gone on for so long. First, at the end of the 1990s, it was the tenants - like my cousin Rupert, once one of the most efficient dairy farmers in Shropshire - who discovered they could not make money from a milk price that dipped below 18p a litre when it cost 19p to produce. Rupert is now a plumber (or rather a manager of a firm of plumbers) and pays himself a better salary.

Then it was the turn of the smaller owner occupiers to find there was no profit in milk production. A thousand dairy farmers have been going out of business a year. Sheep, after a blip a year ago, are back in the doldrums. Beef producers are desperate for the EU ban on their produce to be lifted. More than 80,000 people are thought to have left farming each year in the past five years - the majority from the livestock sector. There are farms for sale everywhere. In fact, it has taken a commendably long time for British farmers to start behaving like French ones.

No one doubts that the plight of farming is at least partly down to the buying power of the supermarkets. Milk is sold in supermarkets for around 54p per litre, while farmers are paid 18p. The price at the farm gate was 25p a decade ago. Potatoes sell for 550 a ton, while farmers are paid 95. Beef on the butcher's counter at Sainsbury's will cost an average of 4.25 per kilo, while farmers have been paid around 1.90. Lately they have been competing with imports of chewy Brazilian beef from Tesco coming in at around 1.60 - less than it costs to produce here.

What has been missing until now was a sense of why all this mattered to the rest of us - though it does. The understandable assumption made by politicians of all complexions for 15 years or more has been that the pressures of the market are a good thing. Less of the wage packet spent on food means more to be spent on fancy cars, electronic goods and holidays, which means voters feel richer. It has been difficult to put one's finger on the downside of letting the supermarkets bully the farmers, until now.

Anyone who truly understands the countryside - and there are all too few of them left - will show you the price that has been paid. Nobody can afford to put anything right. The fencing is falling down. The gates are not being rehung. And in every village, on every skyline, is a bit of land that ought to be grazed, but isn't, because there is no value left in grazing. Grazing animals made the British landscape, and now the absence of them is unmaking it, or at least reducing its nature conservation value. Hardly any offspring of farmers are turning to the land. The fields grow rank, as they did in Henry V when the men were away at war.

Yet Tesco's profits are counted in billions - because, the farmers claim, the share of the profit between the farmer, the wholesaler and the retailer is unequal. Somewhere around the time that your local Tesco - planted there with all sorts of planning conditions in the 1980s - suddenly sprouted a new, white "Extra" store that conformed to none of the previous conditions, supermarkets got used to having it all their own way.

People used to say we have all benefited from that power, in the price of goods that we buy, so why should we complain? Now the price that is being paid in the countryside is daily more obvious - the family farm is on its way to becoming a thing of the past and there are forecasts of a milk shortage of one billion litres by 2007, and I suspect there are the beginnings of unease.

The anguish of the dairy industry began when, for mistaken reasons, the EU told Britain to abolish the Milk Marketing Board. Every year the board held a review of the milk price and settled the profits farmers, middlemen and retailers could take. It was deemed to be a monopoly - and its arrangements would be unlikely to be accepted by the Office of Fair Trading today. Yet the office has been slow to sniff out all sorts of monopolistic, anti-competitive practices enforced by supermarkets upon hapless producers - loyalty payments, fees for the packaging of goods, flagrant threats to withdraw contracts to enforce loyalty rather than price.

Ministers place their faith in a voluntary code of conduct between farmers and retailers, but it is difficult to have faith in this. There is so much anecdotal evidence of breaches of the code by supermarkets. Even the most free-market farmers and landowners now believe that some independent scrutiny of the price-setting process is needed. As David Fursdon, elected yesterday as the Country Land and Business Association's new president, put it: "Something's got to be done."

That something could begin with an OFT inspector empowered to take evidence anonymously, to combat the fear of speaking out in public against the retailers. It could continue with an ombudsman, as long as he had teeth and rapid powers of intervention.

The farmers' strike may yet be an own goal - if it leads to panic buying by consumers or, perhaps, to milk washing down watercourses and polluting rivers. That is a risk. It could also be a turning point in the battle for sympathy between the farmers and retailers, with the public siding with the farmers for the first time since industrial agriculture lost the plot in the 1980s.