122-year-old UK supermarket group Morrisons auction for £ 7bn to US private equity firm demonstrates not only the money on the consumer side of the supply chain, but also the potential growth. However, while the scales weigh on the side of large supermarkets, farmers and producers are struggling to balance the books.
It’s a special situation, and I sometimes wonder how we got there. Agriculture is a huge contributor to our economy, but agriculture is now less financially viable than it ever was. According to some estimates, 42% of UK farms could be in deficit by 2024.
It is at a time when agriculture is needed to support progress towards the sustainable development goals to which the government is committed and will play a fundamental role in the health and well-being of citizens in the years to come.
Agriculture, which contributes 10% of greenhouse gas emissions, has the capacity to reduce its own emissions and to reduce and offset emissions from other industries, but it is crippled. Instead, the UK government is promoting cheap food imports which risk exacerbating supply chain problems as well as the nation’s health.
Almost all consumers (99%) in a survey we conducted recently said it was important for farmers to receive a fair price for their products. Additionally, 93% said they would be willing to pay more for their food to ensure farmers are fairly rewarded.
But producer prices remain low – at a time when British agriculture faces a perfect storm of rising costs, a more competitive domestic market, shrinking export markets, a labor shortage. work, a new farm payments system and a high degree of uncertainty about what the future will look like. Margins in agriculture are notoriously tight, and they are now squeezed on all sides.
No one wins in a price battle – neither the producer nor the supermarket and ultimately, not the consumer either. We are on the cusp of a new food age where people are ready to re-engage in food production and give more weight to provenance, ethical concerns and nutritional value rather than price.
It is time for the government to make agriculture a key consideration in its sustainability, trade and immigration policies.
It is also time to address the imbalance in the entire supply chain. Producers and businesses must be able to play their part in revolutionizing the way we approach the country’s diet, to create a circular and holistic approach to the future of food and agriculture in the UK.
We have given too much power to big retailers for too long at the expense of farmers and producers. If we don’t change that agriculture will fail and we will really see what the supply chain problems look like. A supply slowdown may well be out of the hands of farmers, as chronic labor shortages appear to endanger the availability of UK produce on our supermarket shelves, from bacon to apple pies and even to Christmas turkey. Hopefully this will be enough to demonstrate that the bottom of the supply chain is, in many ways, the more important end.