In the second of our industry debates, farmers study their relationship with the supermarkets, their marketing and how they could do more to persuade processors, retailers and the public that they deserve the very best backing Who's who in our industry debate William Goodwin, dairy farmer from West Sussex David Orpwood, pig and sheep farmer from Henley-on-Thames Ian Frood, dairy, cattle, sheep and arable farmer from Essex (vice-chairman, NFU livestock and wool committee Helen Lo, head of marketing at the NFU Michael Holmes, produce grower (chairman of NFU horticulture executives) Terrig Morgan, North Wales dairy farmer (chairman, NFU milk and dairy produce committee) Gareth Roberts, dairy farmer and processor from Wales. In the chair, Helen Gregory How are farmers perceived by the public? Ian Frood ­ One of the main misconceptions is that farmers sit around deciding what to do with all this money from Brussels. We have to be subsidised but we still don't make any money. Many people are on the breadline, not through their own fault, or the supermarkets' fault, but because of the economic climate. Many people's perception of the farmer is someone who owns 1,000 acres which has been inherited. People in my area have to find a rent cheque twice a year, and it's a struggle. Terrig Morgan ­ We have a problem with our image and we're drawing the public's attention to ourselves because we want to highlight our plight. But we shouldn't start falling out among ourselves. We should work together to improve our image. It's a whole supply chain issue. We're not getting the return on our product we deserve and perhaps we're not valued, but we shouldn't point the finger of blame, we should discuss it. Helen Lo ­ The perception of farmers is that they're set in their ways. People don't realise that farmers are much more sophisticated in their production systems and want to know what is happening around the world so they can improve their systems. Farmers are good businessmen and want to learn ­ we need to try to change people's perceptions. William Goodwin ­ It's almost seen as obscene to wish to be successful. The media and the public are comfortable with the image of a farmer just about making a living and driving around in a tattered old van. Consumers are concerned that farmers are being rewarded in terms of subsidy which they think is unfair. Terms like "subsidy junkies" are dangerous because it's the sort of image that sticks. People don't think farmers are concerned about the environment and conservation but we know these are all part and parcel of a good farming business. What can farmers do to raise their profile? WG ­ We need to market ourselves. We need to re-establish who we are and what we're about. There's no organisation doing just PR for farmers. All of us have one common link, the consumer, and we all have bodies taking money off us in particular sections. There are opportunities to put things right and to become more of a political item. Gareth Roberts ­ Marketing is not in our hands and it should be. There should be specialist milk producers and people shouting about how wonderful their milk is. We're a small business but we spend £50,000 a year ­ 10% of our turnover ­ on marketing. We've really got to sell ourselves. I went into processing, otherwise I would not be surviving today just as a farmer. The farm is little more than somewhere for people to visit. I don't have a big factory to show buyers, but I can show them where the milk comes from and how beautiful our gardens are. We've created a perception of the product in the mind of the buyer which puts them at ease. That puts you half way to selling your product. TM ­ The little red tractor (the British Farm Standard mark) was a way of saying that milk is ours and we have ownership of it. It used to just be Tesco's milk, but we need to say: We produced that'. Whose job is it to educate the public? TM ­ The union is trying to address this issue, especially with milk. We need to look at examples of people doing the job right and get them into workshops to tell people how they've done it. The NFU is talking to people and picking their brains. WG ­ Consumers are our common link and educating them is the only way you can protect your marketplace and the only way it will reward you. Not all farmers are good businessmen. We have pots of money in organisations within our industry looking for homes. And, as a person who pays several thousands of pounds to them each year, I find it disgusting. They could all co-ordinate to educate consumers. It needs to be more than the NFU's food and farming roadshow. Education is our responsibility ­ not the NFU's or retailers ­ so we should set the agenda. David Orpwood ­ Consumers see produce on the shelf and think the biosecurity of the material is as good as the next product's. We need to get across to consumers that the products aren't necessarily all the same. IF ­ We must convince retailers that it's in their interest to put money into innovation and move it along. How good is the farmers' relationship with the supermarkets? IF ­ We can't change our production systems overnight. I have to plan years in advance on stock and make a commitment, but retailers won't make a similar commitment. I have to guess what people want, and it's difficult. We don't have a God given right to be in business and farmers are coming to that conclusion very rapidly indeed. But it would be nice to have a bit of help from outside. It's fashionable for farmers to knock supermarkets but they sell 70% of the beef we produce and are very necessary. We have to earn our reputation and respect for our products. But we want a bit of loyalty. What we really do get upset about is the lipservice paid to higher standards. Then, suddenly, when it is not convenient, then it is all ignored. GR ­ In my industry the problem is that the processors are nearer to the supermarket than they are to the grower. We as the producers, at the bottom of the supply chain, need to be talking to the retailers so that we can make sure that the processors are telling the right story. HL ­ Historically, relationships between farmers and supermarkets have been tense and even now there is certainly cynicism as to how genuine the supermarkets are in supporting British farmers and growers. The NFU has been trying to improve dialogue and activity between farmers and supermarkets with considerable success and although there's still much to do, a commitment from both farmers and supermarkets for a more open communication will accelerate this. Michael Holmes ­ There are three suppliers supplying 20% of the UK carrot market and there's no way the supermarkets want to go back to 53 suppliers. They've only got to audit three packhouses and have three orders. But it's not all bad news with the supermarkets. In horticulture, assured produce was a partnership between the NFU, growers and retailers and we're now at the stage when we have the safest horticultural produce in the world in terms of traceability and the use of pesticides. Do farmers get a fair price for their products? DO ­ The percentage of the retail price that we get has been cut to 12%-13% and the percentage of what the consumer spends a week has been cut to 10% of their disposable income so the consumer's spending of under 1.5% of their total income is to us, and that's got to change. We need a greater percentage of the retail value and they've got to understand that they need to subsidise the market fairly. But I don't know any farmer who wants subsidies, they want a fair price for a fair product. Our supermarkets need a local produce for local people' aisle. I think there'll be a move towards it. WG ­ There's frustration with the supermarkets because farmgate prices are falling substantially, although prices in shops remain the same or are going up. They're using farm assured logos, and that should protect our products, but consumers see these next to products that aren't farm assured, and just because the retailer is selling it, they assume that they all conform to the same standards. The retailers aren't playing fairly, though they're a great place to sell our products. Retailers tell people what they want, but we should be telling them what people want, not them telling us. IF ­ We're on a treadmill, increasing standards, but suddenly, because we're tuppence a pound out, the supermarkets buy from abroad. We supply into an oversupplied market, and that's not the retailers' problem, it's our problem. If supermarkets wanted just to offer cheap food, they could do it quite easily, but they want to give the customer choice. Cheapness won't enable any one supermarket to dominate. That's how we can get our products in store, with the added value. Are farmers' markets a good idea? MH ­ Farmers' markets are very effective but they're a very small part of the picture. DO ­ I do two farmers' markets a month and I've found that consumers want to support us. Some farmers are doing two or three farmers' markets a week and derive the lion's share of their income from them. TM - The NFU is bringing farmers together to market their products as a co-operative. It gives a small farmer strength to market his products within a co-op. That's why farmers markets are not the panacea. How am I going to market my milk through a farmers' market as a commodity producer? I don't pasteurise it, I just produce it. I'd have to go into processing or added value otherwise. HL ­ One of the greatest criticisms which farmers face is that the industry does not communicate with the public effectively nor understands the needs of the consumer. Farmers' markets address this criticism extremely effectively. They give farmers and consumers an opportunity to share information, learn about each others' views, and develop mutual trust and understanding on food production and consumption. They also provide a number of farmers with marketing opportunities and offer consumers a choice which can be complementary to other larger retailers. Are niche markets the answer? TM ­ There's a niche market for organics and we're already seeing that it's peaked in milk ­ some of the organic milk is being sold as conventional milk. But organic farming isn't the panacea for marketing everything. When a niche market grows it's no longer a niche market and there's no longer a premium for it. There's differentiation in milk ­ we've got Welsh milk, breakfast milk, and that's a way of growing the market, giving consumers a choice. When they get a choice they're invariably prepared to pay more. Retailers need to be continuously reminded we're producing high quality milk and we need loyalty and commitment from them so we can keep the market satisfied. WG ­ It's difficult to find out what the consumer wants. If it's farm assured, then great, but this does not seem to be the case because they're indiscriminate about what they buy. Ninety five per cent have a budget and they're always looking for the cheapest thing. That's why the retailers sell so much cheap food­ because they're catering to that particular type of market. Look at what happened at Iceland. We're happy to adjust to the marketplace, but we have to compete with the cheap imports that come in. Do farmers need help from the government or retailers? WG ­ Subsidies come from consumers, to the government, to the unions, to the farmers and ultimately it ends up as the bottom line of the retailer. Retailers are aware they can squeeze price because somewhere along the line we'll be picked up by the government. But it's all too open book. People know too much about our businesses. It's wrong. We don't know, but we assume, that the retailers are making significant margins on our products because they're buying them very cheaply and selling them to the consumer at the same sort of level that they're importing them. We have transparency in our own businesses and it's too much information in the retailers' hands. TM ­ We need to know how much the costs are for retailers and processors. It's an important issue of transparency. Every time I see Tesco they ask me How can we help you take costs out of your business?' and I think: I'm at the cutting edge of taking costs out.' It's like making sure the lights are off and there are no dripping taps. We do it on a daily basis. What is the future for farming? DO ­ One friend of mine has just turned 40 and can't go on. He hasn't been able to invest in equipment for years. These guys are crying out, we're up to there'. Market demands pull us, and so does legislation. The supermarkets say they can buy cheaper from abroad but they can only buy dumped goods from abroad, and they do no-one any good by taking them. IF ­ Most of our food could be imported cheaper from abroad ­ but there has to be a balance. Can we see the UK without farmers? You can't depopulate the environment. We're not just producers any more, we've got the care of the countryside too. TM ­ The issue of rural communities is extremely important. It's a question of how much companies plough back. In my area, meal companies have gone and machinery buyers have gone out of business. We as farmers/buyers can source our supplies much further than we used to ­ over the internet for example. It's the same issue as it is for the retailers: because we're trying to cut out costs, we're prepared to go further afield to buy. WG ­ The rationalisation in the industry has had to happen, but it's an industry deprived of young blood, and there will come a time when it will come to a head. There will be large farms catering to the mass market and niche farms, like the organic sector, and a third sector maybe catering for leisure and tourism. We have to be alive to the marketplace, to our own deficiencies, and try to adapt to it. But how will we ever attract young people into an industry where they'll work all the hours God sends for precious little reward, with all the stresses and bureaucracy? {{COVER FEATURE }}