Farmers need to stick together or be picked off one by one

Of course, there was still the inevitable political kickabout from the politicians, but the majority of speakers were on the supply chain and that is only right because that is truly where the sustainable future lies. Chief executive of NFUS, John Davidson, set the tone by stating that profitability should be our priority.

‘Just say no’ was the message of the day from Nicolai Hansen and Ged Futter, whose clear message when I asked him about co-operation was: “If you don’t come together the retailers will pick you off.”

The day before, I received an email from our potato packer which showed how true this is. Negotiations have been more fraught and extended than usual due to an informal grouping of growers refusing to sign the contracts offered to them.

As usual, the contracts offered were significantly less than those offered to English growers, and increasing concerns about deductions on packout and a change to the size specification for whites, encouraged growers to reject the contract offer.

The Japanese emperor Hirohito declared in 1945, after the atom bombs were dropped on Hiroshima and Nagasaki, that ‘the war has not necessarily gone in our favour’. The response from the packer had a similar, understated tone: “Since we released our contract at the beginning of January, information has come to our attention which has prompted us to review the prices we offered.”

That’s one way of putting it. Another way of putting it is that they couldn’t pick enough of us off to get their initial offer over the line.

The offer they came back with at the second time of asking will probably be accepted by most growers, but if more growers had been willing to hold off signing, I have no doubt they could have negotiated parity with the English contracts.

Many growers who did sign the original contracts will now benefit from the efforts of others, but that’s OK. These baby steps will undoubtedly encourage more growers to work together next year instead of blindly signing contracts. The veil has been lifted, the emperor has no clothes, and everything has changed.

I was worried to hear last week that the producer organisation scheme is coming to an end in England next year, and Defra has not decided what to replace the scheme with. I managed to catch up with Tom Bradshaw, incoming NFU president, and chief executive Terry Jones at the NFUS conference, and they are very supportive of the scheme continuing in some form, which is a big relief.

However, they want it to be widened to include growers who are not part of a PO as they say it is currently unfair to those who are not members of co-ops.

In effect, this could well mean that the scheme becomes competitive rather than elective if there is a lot of enthusiasm, as funding will have to be limited.

I also worry that big independent businesses could be the main beneficiaries of a scheme like this to the detriment of small and medium-sized businesses, much as the old Food, Marketing and Processing Scheme showed.

Larger businesses tend to be much more alive to what is out there as they have staff available to look out for funding opportunities.

As we have already seen from our experiences with potatoes, it is obvious that anything that encourages growers to group together is likely to help them get a better return in the market, and I believe that funding individual businesses with grants will push down prices as these businesses are likely to utilise grant money to undercut the market for the sake of sales.

Competitive funding grants put farmers back into competition with each other, and I fear the ultimate beneficiaries of all that grant money, meant for primary producers, will in fact be the retailers.

There are a couple of very big caveats to my concerns – firstly, there is the General Election to come at the end of the year, so perhaps we should be touching base with Labour politicians on this to see what their plans are. Secondly, the Scottish Government is under no obligation to follow the rest of the UK’s lead in this – they could choose to continue the scheme as it is now, dependent on whatever size of funding pot continues to come from the UK Government.

Given that Scottish and English growers are supplying into the same UK marketplace, however, any grant scheme that doesn’t encourage co-operation south of the Border is likely to have a negative impact on prices from retailers for Scottish growers.

Now a brief note on First Minister Humza Yousaf’s speech at the NFUS conference. It is very tempting to draw an analogy with the daylight robbery experienced by Scotland last week at Murrayfield and the withheld money from Scottish agriculture, but in truth, he promised that the money would be returned in the future, and it is plain for all to see that Scotland’s education, social, health and transport infrastructure is creaking at the seams.

If I could see results coming in these fundamental areas rather than distracting and wasteful diversions into Green-driven policies like national parks, I would be more relaxed about the money being ‘borrowed’.

Mr Yousaf made all the right noises about supporting food production but, of course, there was very little meat on the bones.

He did announce that 70% of funding will be in tier one and two in the future scheme, but we don’t yet know what conditions will be attached to gain tier one or two, and we still don’t know what the total sum of funding will be.

The other hopeful statement was a commitment to look harder at public procurement for Scottish produce. This might seem like a poor result to those among us who are ready to man the barricades but speak to absolutely any farmer south of the Border and they will be looking on green with envy at that percentage.

There is no doubt in my mind that Martin Kennedy and his team at NFUS have been right to stick with the process, and they should be commended for their patience and resilience.

There never was much hope of carrying on as before, and what they have achieved so far is significantly more geared towards food production than elsewhere in the UK.

However, let’s return to the supply chain. If you want more dollar, ask for it from your customers.

Any business planning a profitable future would be unwise to factor in government support as anything more than a bonus.