One question I’ve been asked from time to time is sensible enough, “How on earth can anybody make a living from food production?”
I suppose the answer is simple, “Send the wife out to work.”
But looking ahead, the world is changing. Whatever you think of Brexit and the EU, we’re leaving. Nobody has a clue what sort of deal we’ll get; nobody really knows how important government considers agriculture. Will farming get traded away to ensure a good deal for our car exporters? Will we be sold down the river to ensure financial services get the deal they want? Certainly UK governments over the last forty years haven’t got a good record of taking a long term view of agriculture.
But I want to look at the scruffy end, what you might call the ‘peasant farmer’ end of the business. The bigger operations have more options, they have economies of scale. If the worst comes to the worst and the whole job goes belly up, then so long as they’re not over-borrowed they can get rid of staff and just ranch it.
But what about the bottom end? Here where you get the small farmers, the smallholders and the family operations; we’ve always had the situation where, to put it bluntly, the farm has made a contribution to the family income but was never the whole story. The show was kept on the road by sons and daughters working off-farm for at least part of the time, the spouse going out to work and everybody pitching in and working far too many hours when they were at home. That was how many got by.
Now these smaller operations may have an advantage that the bigger operations don’t have. They’ve got that web of connections, friends, neighbours, workmates etc.
Whatever happens in 2020, I think one thing we’ll see is volatility. This is because, in reality, we’re seeing it already. The EU has pulled back from trying to provide stability anyway so there is not going to be as big a change as people think. The EU isn’t big enough to dampen down the swings in world grain prices, and over the last couple of years they’ve abandoned attempts to provide stability for dairy producers. I know people who were getting 27p a litre for their milk a couple of years ago, 17p a litre for their milk last year, and hopefully will be back up at 27p a litre at some point this year. To put this in perspective, we got 30p a litre back in 1996 and we got 17p a litre back in the 1970s.
I was once at a meeting where somebody from Defra was saying that Farmers had to be more resilient. I suggested that he spend a year on his 1970 salary and then came back and lecture us on resilience.
But what it means is that when we leave the EU, retail food prices will go up. They’ll have to, the cost of transport, processing, the effect of minimum wage on supermarket employees, the increasing costs incurred when running major advertising campaigns, all will conspire to drive prices up. The farm-gate price of food will be largely irrelevant. When it goes up, it’ll be seized upon as a reason why ‘hard pressed retailers’ have to increase prices. When farm-gate prices fall, retailers will just hold prices and bank the extra margin. I suppose there might be more promotions, but as these are often paid for by the supplier, it’ll not have an impact on the retailer’s annual profits.
But looking at the small producer, how can they cope? If we assume that the price you’ll get for your product is going to be volatile and could well drop a lot, then you really want to stop being just a producer and start being a retailer as well. After all, all you have to compete with is the supermarkets and they’re aiming at keeping their margin.
This is where the small producer’s network of friends, workmates, and neighbours comes in. Start thinking of them as potential customers or potential sales staff and contemplate what you’re growing. The plethora of veg-box schemes shows what is possible, the growth of farmers’ markets shows that there is a demand. Even for livestock producers, there are still enough abattoirs left who’ll slaughter animals for you, and a lot of them will even cut the animal up for you as well. With livestock I’d go down the route of selling the whole lamb, or half a pig, rather than selling individual joints. It does limit your customers to people with freezers, but on the other hand it means you do not have to worry about unpopular cuts.
Not only will you be able to undercut the major retailers, (without having to go to the lengths of mixing horsemeat into the burgers or pumping the chicken full of water to get the weight up,) but you’ll be ‘local.’ People know you.
And what about the consumer, how can they take advantage of it? Here it depends where you live. If you’re in the city centre, or even in the heart of the suburbs you’re going to struggle to find anything locally. But there again I’ve got friends in London who make it their business to drive out every few months to collect meat for the freezer, a few chickens or whatever.
Farmers markets in cities tend to be expensive, if only because of the costs associated with them. Rents are high, there’s a lot of time and travelling involved and all this has to be covered somehow.
If food matters to you and you’re willing to do some research, you’ll probably be surprised at what you find. A friend of mine went into a butcher’s shop in the suburb where he lives and discovered to his shock that the butcher was cheaper than the supermarket my friend normally shopped at, (it’s surprising how often butchers are,) and what is more had better meat. In this case the butcher was buying very carefully from producers he had built up a relationship with over the years.
It’s surprising what can be done.