Recent utterings by politicians in favour of Brexit, pointing to the opportunities such a development would create for supermarkets to imports oodles of cheap food from countries around the world, will be seen as a good news story by retailers. But irrespective of the UK leaving or staying within the EU family, there is ample evidence to confirm that supermarkets across Europe are now using ‘cheap food’ as a blunt instrument in their continuing war against each other to garner greater market share.
It strikes me that the only way of getting to the bottom of this issue is for Agriculture Commissioner Phil Hogan to instigate a fundamental review of the entire agri food sector. And once the causes of the problems have been fully identified, his next job should be that of appointing a series of national supermarket ombudsmen. It will be their task to ensure there is no future slippage when it comes to the fully transparent operation of the EU’s agriculture, food and retail industries.
The fundamental driver for this is the fact that farmers must receive realistic prices for their produce, if they are to remain viable. And this is not happening at the present time. For most of the past 20 years producer prices have consistently fallen in real terms, while all input costs have increased. In response to this pressure, farmers have done one of two things: grow their businesses – in the hope of becoming more efficient – or get out of the industry all together. And, increasingly, they are taking the latter option.
The other kicker within all of this is the fact that farmers can look forward to four years of reduced Pillar 1 support payments. The reality is that the value of current single payment will fall in real terms as no correction for inflation is built into the Brussels-funded support scheme. This leaves farmers between a rock and a hard place, a situation created by a combination of falling farmgate returns and a support system that is not fit for purpose.
Phil Hogan’s fist opportunity to do something about all of this will come courtesy of a mid-term CAP review; should he commit to such a process. During his recent visit to Northern Ireland, the commissioner said that he would make his mind up on the matter over the coming weeks. The reality is that farmers now find themselves coping with a fire storm of financial woes, none of which were of their making. So let’s just hope that Hogan does commit to introducing fundamental CAP changes on behalf of producers during the months ahead.