Allegations that supermarkets squeeze unmercifully the farmers who supply them with basic products such as meat, milk, eggs, vegetables, soft fruit and potatoes have been made for years.
The claims include arbitrary, sudden price cuts – suppliers taking the pain when supermarkets offer three for two or buy one, get one free, and a premium being charged for shelf space. In spite of frequent meetings, some limited government intervention and attempts to establish a code of fair conduct over at least 15 years, both the allegations and responses to them remain, as far as I can tell, unchanged.
Occasionally they are added to. The latest claim by the English farmers’ union is that supermarkets are trying to force British producers of fruit and vegetables to extend their season to Continental length in spite of the difference in climate. Obviously, it costs more to produce out-of-season crops – if and when that is possible using giant glasshouses, heating and polytunnels – than it does using natural sunlight and warmth.
There are even worse tactics than that, say the union, such as supermarkets running special offers on a glut of overseas fruit and vegetables during the peak of the British season.
Where will it end? And do shoppers in these difficult financial times care where the astonishing range of products now on offer come from as long as they are as cheap as possible? The answer to that last question is no, the majority don’t and of those that do, it is only a fleeting thought when spending as little as possible of the household budget on food is a priority.
Successful suppliers of supermarkets recognise that. In spite of all alleged dastardly supermarket tactics, some producers and processors – Glenrath eggs, Bartlett potatoes, Wiseman milk and Porter’s strawberries, the Scottish group now growing rasps in Spain – have established profitable businesses by working closely with today’s giant grocery retailers.
I don’t imagine it has been easy, or will ever be easy, to keep these relationships amicable and profitable. But so far it has worked for them. I also know several other smaller businesses – although big in farming terms – who keep supermarket relationships on an even keel. Equally, I know others who have been badly treated, suffered heavy losses and have been dropped without a second thought or kind word. Dealing with businesses that count profit in billions and demand rigid, high-quality delivery of larger quantities to tight timetables is not for the faint-hearted.
When you get right down to it, farmers who supply supermarkets – or more usually farmers who supply processors who supply supermarkets – face Hobson’s choice. In spite of any supermarket lip service to codes of conduct, suppliers play by supermarket rules or they don’t play.
That’s not fair, but as most of us learn early, neither is life. A glance round the increasingly large area of Scotland covered by polytunnels and protective fleece over soft fruit and vegetables indicates how determined some suppliers already are to extend the natural seasons – it will be a happy day when glass or plastic covers the lot.
And the chances of supermarket buyers being happy then? Answers on a postcard.
Supplying supermarkets is, of course, an example of the free market at work. A classic example of the free market not at work is the European Union’s common agricultural policy (CAP) and the subsidies it provides. Yet in a way the hoops farmers have to go through to get their annual single farm payment can be as difficult as the rules facing supermarket suppliers.
The difference is that the CAP rules are not so rigidly enforced because they are more difficult to police. But farmers trying to evade rules of, say, good agricultural and environmental compliance or sheep identification can face stiff penalties if caught out. “Greening” proposals for the CAP now being discussed, theoretically to take effect in 2014 to apply until at least 2020, could make life even more difficult.
To some extent, these should be taken with a pinch of salt. CAP negotiations drag on and whatever eventual compromise is reached is usually far removed from the original proposals.
But there is a steady move towards making CAP subsidies depend on farmers’ compliance with conservation and environmental demands. The draft proposal is that 30 per cent of a farmer’s annual subsidy from 2014 should depend on meeting rules for ecological focus areas, crop diversification and maintenance of existing permanent pasture.
The immediate problems are that permanent pasture is defined as grass down for more than five years, crop diversification means growing at least three crops, and an ecological focus area relates to not exactly God knows what, but includes woodlands, landscape features, buffer strips and seven per cent of a farm’s eligible area, excluding permanent grass as defined above. Beam me up, Scotty.
Who knows what final form the “greening” compliance will take? But as with supermarkets, farmers face a Hobson’s choice with the CAP – play by its rules, or don’t play. It’s also what could be called a Faustian bargain – sell your soul to the subsidy and there’s the devil to pay eventually.