Douglas Chalmers: Farmers not profiting from rising food costs

THE CLA in the North is concerned that shoppers may think that farmers are profiting from their increasing food bills, but says the reality is far from the case despite some media reports.

Douglas Chalmers, Director CLA North said: “There has been talk of food riots around the world for months, and with Italians now finding pasta too expensive, having risen by 81 per cent, the situation is certainly coming closer to home. A recent survey (MySupermarket.co.uk) has confirmed what every shopper has been aware of for some time. The media spend hours discussing the “credit crunch” and its effect on mortgages and those buying homes, but with overall food inflation now at 19.1 %, it’s the increasing day to day essential bills that are affecting everyone.

“Anecdotal evidence is beginning to suggest that our farmers are the ones to benefit, but as always there are always two sides to any story. The sad fact is that even though the consumer is paying more for food, many farmers are actually worse off than last year.

“Simple supply and demand economics might suggest that farmers could just produce more food and bring prices down in the shops. Shoppers may be shocked to realise that many livestock farmers and especially those in the uplands just can’t afford to increase output. Of course there are examples of individual businesses doing well, but the sector as a whole is far from robust.

“The three ‘Fs’ of farm costs; feed, fertiliser and fuel are dearer than ever before, and likely to go higher, and rather than expand some farmers have actually decided to reduce or even come out of production, with obvious implications for other rural businesses.

many livestock farmers and especially those in the uplands just can’t afford to increase output

Douglas Chalmers - CLA

“Farming has been in an economic slump for at least twelve years now, and most farmers have already made every possible cost saving possible – they have no notches left in their belts. Many had reduced sales last year as Foot and Mouth restrictions closed markets, and they all face an ever-increasing assault from regulations, some of which add cost for no benefit to the consumer or the producer.

“The public recognises that farmers manage the landscape and the environment, but if farmers are rewarded only for this work, our food security becomes critical. Dearer food has serious consequences for everyone, so we must allow our producers to produce. Economic and legislative pressures are currently stifling them, and surely now is the time for these blockages to enterprise to be addressed?”