Report on farmgate pricing must prompt action
2nd March 2016
The National Sheep Association (NSA) has welcomed the work of the Environment, Food and Rural Affairs (EFRA) committee in conducting an important enquiry into farmgate pricing, calling for real action to now be taken on the many recommendations made.
Following several years of extreme price volatility, which has caused significant difficulty to all sectors of the farming industry, an investigation into the price paid for farm produce was called for at Government level. EFRA conducted the work this autumn and winter, releasing its report and recommendations today (Wednesday 2nd March).
Phil Stocker, NSA Chief Executive, says: “The enquiry clearly shows that the structure of the farming and food sector does not generally support adequate farmgate prices, despite the fundamental role agriculture plays in the UK economy. The report outlines some valuable recommendations that could work to address this, including several based on evidence NSA gave during the enquiry. These include further development of export opportunities, as well as displacing imports through greater domestic trade, setting up producer organisations and establishing futures markets for red meat as well dairy produce. NSA is also pleased that improved identification and labelling of British products has been listed as a key recommendation.
“While it sets out some valuable actions that the industry should take heed of, we must also recognise the rationale of direct payments under the Common Agricultural Policy (CAP) to support farming and rural incomes, and to ensure an effective supply of food. The CAP should be recognised as highly beneficial to the country as a whole and this should be remembered, irrespective of the outcome of the forthcoming EU referendum.”
Expressing concern over the uncertainty that would surround an exit from the EU, Mr Stocker adds: “In the event of a Brexit, this financial support may be at risk and I am concerned it could be phased out. Producers rely on CAP payments to hedge income and, as the report has shown, farmgate prices often aren’t high enough to support a sustainable business. Whether we opt in or out of Europe, any attempt to change the support system should be avoided.”
A year of particularly low farmgate prices, coupled with delivery challenges with the new Basic Payment Scheme in all parts of the UK, has left many farmers in severe financial difficulty, highlighting just how important this support is.
Mr Stocker adds: “With farmgate prices being so low, the importance of getting payments out to farmers on time is essential to aid cash flow. Some farmers still haven’t received payment and this year’s fiasco must not be allowed to happen again.”
NSA now urges the industry to act upon these recommendations, in order to make the sheep sector more resilient and sustainable in an ever changing global market, while reminding the government that financial support is still very much needed.
