The Crisis in Farming.I The Supermarkets
1. It is vital to understand that the Supermarket buyers are highly tasked and highly professional people. The old adage applies " The profit is in the buying ". They are capable, and do, manage the marketplace.They will "control" the intermediate businesses between them and the Food Producers ( Farmers ) and set prices at a level that only the most efficient farmers can make a living on. The pressure is then exerted on the others to improve or get out. They ( the buyers) will not exert an impossible level of pressure ( knowingly ) as that would spoil their plans. The high level of Sterling makes the whole job easy for them as they can buy "strategically" in order to maintain an apparent over supply situation in the UK and, therefore, control prices. The same exchange rate problem makes it extremely difficult for farmers to export and they are trapped.
2. The prices that the supermarkets charge their customers have nothing to do with the prices they pay farmers. They will charge whatever the market will take and will only compete with each other around the fringes.
3. For many years farmers prices have been well below inflation in spite of the upward pressure on their input costs through fuel and giant Agricultural Supply companies like BOCM or ICI etc.
4. The impact has meant that farmers have been forced to produce more and more in order to survive and now stand accused over intensification, using too much fertiliser etc.etc. The "root" problems (forgive the pun) having been swept under the carpet.
5. This unremitting pressure to increase output has resulted in a subliminal setting of farmer against farmer as the failure of a neighbour is a prerequisite of convenient expansion. The politicians keep muttering "Why can't these farmers work together?"
6. The evolution of farmers' marketing co-operatives in other parts of the EU has protected them in these difficult times. e.g. in France the Dairy farmers have a lot of control. In the UK we set up the Milk Marketing Board many years ago. It became sloppy ( like all state institutions) and, instead of reforming it our "leaders" demolished it and threw unprotected farmers into the teeth of the supermarkets who have savaged the Industry and got knighthoods for doing so.
7. By any comparative measures e.g. how much wool does a farmer have to sell to buy an "M&S cardigan, or how much grain to buy a loaf of bread etc. etc. the Farming Industry has contributed an enormous amount to our standard of living and are having to work long hours, 7 days a week and at least 50 weeks a year just to stay in business.
JUST WHO IS SUBSIDISING WHO ?