[Reader-list] supermarkets and farmers

[Nagraj Adve]

The second half of this piece gives a sense of what large supermarkets
firms can do to farmers in the UK context.
Nagraj


Weather-beaten UK farmers lament a dismal year for food production

Already squeezed by supermarket dominance, all types of farmer have
had to endure drought and flooding this year too


    *
      Fiona Harvey and Rebecca Smithers
    * guardian.co.uk, Friday 12 October 2012 13.44 BST

"It's been the worst year in living memory," says Jonathan Lukies, who
farms 288 hectares (720 acres) of arable and fruit orchards near
Stansted, Essex. "It was horrific."

This year's weather has been a rollercoaster for British farmers that
most now just want to forget. With a record drought afflicting most of
England in the early spring – one so severe it prompted a series of
emergency meetings with government – farmers desperately needed
above-average rainfall to replenish the soil for planting. Their
prayers for rain were answered – but in the worst possible way, with
the wettest early summer ever recorded, followed by a near-sunless
summer and torrential downpours in many areas late in the growing
season.

This combination of extreme weather was disastrous for staple crops
such as wheat and vegetables, first putting off growth and then
washing out crops and preventing them from ripening.

"Starting from Easter weekend, we had a year's rainfall in three
months," says Lukies. "That was the killer. I've never seen anything
like it, and my father who is in his 60s says he's never seen the like
either."

His views are echoed across the farming community. Guy Gagen, crops
adviser at the National Farmers' Union (NFU), says: "Speaking to
farmers who have been in business for decades, they don't remember
anything being as difficult as this year. There have been bad years
before, of course, but this has been terrible right across the growing
season, from beginning to end.

"One of the problems was that it was just so dark – there was too
little sunlight for crops to grow. If you think back, some days in
June were like November. That really reduced productivity."

Every sector of farming has been hit. Arable farmers have seen yields
of wheat fall by 14%, according to the NFU, reducing the UK's wheat
crop to levels not seen since the 1980s – before many farmers invested
in modern technology such as grain driers. Vegetable growers have
suffered, with half the pea crop wiped out across the country. Meat
producers, from poultry to pig farming, have seen their overheads soar
due to the poor global grain harvest raising feed prices. Salad and
fruit growers have also had a dreadful year, with fresh produce being
thrown away or fetching abnormally low prices during June and July, as
people were simply not buying summery foods because of the miserable
weather.

Prices to consumers are rising sharply as a result of all these
factors. That might appear to mean a bonanza for farmers – at least
the food they have been able to grow is now fetching top prices. But
most farmers are not profiting.

For many arable farmers, one reason is that they hedge their risks on
future yields by contracting to sell their grain at an agreed price
before the harvest, which gives them a guaranteed income on what they
can produce. Lukies was typical, contracting for about two-thirds of
his crop in advance. But prices early in the season were low – about
£150 a tonne. As the harvest came in, prices soared to £205. Lukies
was unable to cash in even on the third he had not sold in advance, as
most of his crop was of too poor quality, owing to the weather.
Thousands of farmers are likely to have found themselves in a similar
bind.

For other farmers, such as vegetable growers, any price rises are
outweighed by the much lower yields of their crops. "People have
invested money in growing these crops, and seen the yields sinking,"
says James Hallett, chief executive of the British Growers Association