UK food supply chain 'fundamentally wrong', say farmers

11 August 2015

Urgent action is needed to fix the food industry supply chain, farmers unions said, as campaigners meet supermarket Morrisons to discuss milk prices.

Farming unions said there needed to be a “seismic change” in the way food is sold to avoid dire consequences for the UK farming industry and rural economy.

A joint statement from the National Farmers Union (NFU), NFU Scotland, NFU Cymru and Ulster Farmers Union, said the government needed to “admit that something has gone fundamentally wrong in the supply chain” and urged ministers to take remedial action.

The unions said voluntary codes were not working and contracts with farmers needed to be longer term and have a fairer apportioning of risk and reward.

“At the moment in many contracts all the risk is put on the farmer with very little of the reward,” the statement said.

The government must urgently improve labelling to make it clear which food is British and which is imported, and should market British food abroad.

The unions called on retailers to “stop devaluing fresh British food like milk purely to get customers through the door”, and also demonstrate a fair price has been paid to farmers for all food.

“The British public has said time and time again that they want British food,” the unions said. “Unless farmers’ returns are sustainable and you promote British food and label it properly the future of our supply is at risk. If you can’t demonstrate what you are doing for all food then we look to you to commit to changing.”

Campaign group Farmers for Action is meeting with supermarket chain Morrisons today to discuss problems facing British dairy farmers.

The farming unions also want UK ministers to “stand up for British farming” at a European Union meeting of the Council of Agricultural Ministers next month.

“In particular ensure that European safety nets are at a proper level and do something to underwrite the short term credit position of vulnerable farmers,” the unions said.

The farming unions thanked the British public for their support and urged them to ask retailers what they were doing to support farmers and British food.

“It’s time to Back British Farming and the farming unions are looking to government and retailers to take action now,” the joint statement said. “Until they do, farmers will be making their presence felt, where they feel there is unfairness in the supply chain locally, nationally and in Europe from now and including the 7 September [EU meeting].”

Janet Godsell, professor of operations and supply chain strategy from the University of Warwick's manufacturing group, said the UK dairy industry is polarised with some parts adapting and surviving and others that are not. "We need to be honest about which parts are not thriving and help them to adapt."

She said those that were doing best had taken a more holistic supply chain perspective; collaboratively though dairy development groups or through vertical integration by developing value added products and services.

"Rather than being negative about the whole industry, we need to specific," she said. "Identify where initiatives are working and learn from them. Where retailers are acting responsibly this should be highlighted so that consumers can make a real choice."

UPDATE: Following the meeting with Morrisons, the supermarket announced a new brand of milk where 10 per cent of the retail price will go back to farmers.

"We want to offer practical help by being the first supermarket to launch a range of four-pint milk at a premium of 10p per litre, all of which will be passed back directly to Arla farmers. We will stock this product in all our stores, offering our customers the choice to support dairy farmers directly," the retailer said in a statement.

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