The parlous financial state many UK farmers and producers are facing has been laid bare in a new report by food and farming charity Sustain – with many businesses often left with tiny profits when selling into supermarkets.
Its report – Unpicking Food Prices: Where does your food pound go and why do farmers get so little? – published today, looked at five everyday foodstuffs (apples, cheese, beefburgers, carrots and bread). It found that, after intermediaries and retailers took their cut, farmers sometimes received far less than 1% of the profit for the food they produced.
For example, for a loaf of bread, a cereal farmer spent 9.03p to produce the required ingredient for the product, yet received an almost negligible profit (0.09p) on a selling price of £1.14 in the mults.
For a loaf sold in an independent bakery, profit rose to 0.5p.
Other examples included a pack of four beefburgers, which gained 10 times the profit for a processor than it did for a beef farmer, Sustain said.
Meanwhile, a carrot grower spent 14p on production costs per typical bag, on average, but received “almost negligible” returns by selling into supermarket supply chains, compared with 5p per bag in a not-for-profit better food trader.
This demonstrated the increased value available by selling via shorter supply chains into social enterprises such as vegetable box schemes and co-ops, compared to selling into the mults Sustain said.
As a result, the charity is calling on government to beef up sourcing regulations to make them “fairer for farmers”, alongside developing regional structural funds to invest in more infrastructure such as hubs and local processing that could shorten supply chains. Retailers also need to be more transparent and publish more information about their supply chains, it is urging.
Fruit & veg in ‘crisis’ amid ‘endemic’ low returns to growers
“Debates on farm policy, which put environmental aims at the forefront of targets, largely ignore how the money is allocated in supply chains,” Sustain said. “That needs to change.”
“It is astonishing how little of the money we pay for our food ends up in the hands of the farmers and growers,” added Sustain head of farming Vicki Hird.
“Farmers carry a lot of risk and work in difficult conditions to put food on our table. We also expect them to look after our landscape and our nature – and want them to do more of that in the future, including protecting nature and helping to cut 30% of food-based climate-changing greenhouse gas emissions. If they are to do that, they need more money in their businesses. That money should not leach out of the system into the coffers of food industry intermediaries and supermarkets.”
If farmers were to be given the chance “to change how we produce food”, they needed to keep more of the value so they can invest and try new approaches, she added.
“We should not let intermediaries and food buyers hold all the bargaining chips. Crucially, our report shows that paying farmers more need not mean higher food prices so retailers cannot use that excuse – there would be little impact on many products’ retail prices if farmers were paid more. We make strong recommendations on investing in better routes to market, regulating supply chains, and building transparency.”
The report comes amid a growing cost of production crisis in many grocery categories, with eggs hitting the headlines in recent weeks, while The Grocer also reported this week that concerns over returns were now crippling fruit and veg growers.
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