Producer Groups can help address the dominance and lack of competition of the powerful processors and retailers, which is driving the beef industry to its knees, the National Beef Association (NBA) has said.
Groups of farmers have a long-standing tradition of organising themselves in agricultural cooperatives.
Following the promotion of transparency and Producer Groups in the UK Agricultural Bill, the NBA believes these cooperatives are now essential in bringing the balance of power back to the centre instead of being totally with the processor.
Chris Mallon, NBA chief executive explains: “Producer Groups can concentrate supply and improve the marketing of products, optimise production costs, carry out research and share and disseminate their individual experiences to the wider co-operative.
“If new Groups have any chance of being able to stand up to the dominance of the powerful retailers and processors, they will require ongoing support, especially in the early years. They need to be looking towards direct contracts with retailers, creating a distinct brand to build up a consistent quality of product,” he adds.
The NBA says both future and present groups should consider how they sell their stock, moving away from bid prices on a Friday, and towards tenders with processors and direct contracts with retailers. Any new Producer Groups would also need to be well funded and organised, with potential to be marketing a significant percentage of UK cattle, perhaps over 40%.
“Farmers need to start to control the supply of cattle, and work together, if they want to have a future supplying beef,” says Mr Mallon. “Size matters, and as we see at the moment, no one farmer matters on their own.
“Producer groups will need to be farmer-owned and independent of the processor and retailer. Retailer and processor owned groups only satisfy the needs of those who ultimately control it and that is not the farmer,” he adds.
The NBA says independence from those further up the food chain is critical, and any relationship needs to be under normal commercial rules. The day of farmers giving over their commercially sensitive information to third parties needs to end.
“Giving over your costs only drives down the price. We need to take back control by coming together and sticking together for the common good,” concludes Mr Mallon.
The National Beef Association remains the only dedicated voice for British Beef Farmers. Its mission is to continually promote and support the UK beef industry at all levels, including the organisation of Beef Expo event every year. The organisation also engages with the Government and Devolved Administrations to defend the interest of beef farmers across England, Scotland, Wales and Northern Ireland.