View from the other side of the fence

May 2008 - Posts

Fuel Protests. Good or Bad?

So Major fuel protests in Wales and the South East today.  Should the Famers be joining in?  Or are we happy we've been getting our farmgate costs rises? 

Fuel has nearly doubled in the last 12 months, whether it's domestic fuel or Red Diesel. 

So should the government have abandoned the biofuel policy?  Or should it press ahead as the USA is?

 The UK government finances are in a mess.  It needs as much money into the treasury as it can.  Fuel is easy money.  However if these protests escalate to blockades of fuel depots what next for Gordon Brown?

Which is Cheaper for UK plc High inflation or High fuel costs?

Lowering the fuel duty could help the inflation figures but it won't last long with the price of fuel spirraling upwards.  

Would an "Essential Users Rebate", help as some lorry drivers are calling for?

The Freight Transport Association (fta) is calling for a duty reduction of 25p/litre to bring us in line with the rest of Europe.

 Of course the cost of fuel rise hits food twice, in Agriculture and the Transportation of the Food for processing and the Shops.

Can anything be done?

What do you think should happen? 

Posted: May 27 2008, 09:09 AM by viewfromtheothersideofthefence | with 2 comment(s)
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Thought For Food.
Does Alistair Darling's letter to the other EU finance ministers, suggesting the scrapping of the CAP, show that the government does not care about Agriculture in the UK?  Even more worrying, does it show a distinct lack of understand of public perceptions and the UK Economy?

 

The Government seems only to care about the inflation figures and how it will reflect on them.  Do you see this theme of self-preservation from my last Blog, again?

 

But just because farmers are making a little profit, will the removal of Farm Subsidies help the "Inflation Figures?"  Not for this recession, that's for sure. 

 

In fact it will cause inflation to rise in the short term with no prospect of it coming back down again.  More small farms going out of business.  Large farms getting bigger.  Fewer suppliers in the UK!

 

The current situation of high food prices is not a result of greedy farmers pushing up farmgate prices because supply is low and demand is high with world food.  In fact its more about large corporations protecting profit margins for shareholders than value for money for the consumer.

 

Alistair Darling is worried about the impact of food price rises upon inflation.  I hope he used his food summit on Thursday (22nd May) to talk to the Supermarkets about distributing a more proportionate part of their profit to the farmers and ensuring they have a sustainable future.  Then we might be able to discuss the lowering of CAP subsidy as the EU itself is planning.

 

So what are Ministers doing?  Are they on a wrecking spree?  Are they out to destroy the UK farmers the way that Maggie did with the Miners?

 

If the CAP is dropped suddenly, food prices are guaranteed to increase substantialy.  UK farmers will rightly put up the farmgate price, to replace the income lost, or go out of business.  If it's the latter suppliers will have to purchase on the world market and we all know there is less food to go around which will drive prices higher still.

 

I would suggest that if there is to be a recession it is going to hit hard.  The government does not want food inflation to impact on the countries economy and is happy for Food to be imported at the cheapest price. 

 

Except that cannot happen.  World food is already in short supply.  Import price will not stay low for long.  So the future still looks rosy for British Agriculture.

 

UK Agriculture can help the UK and World economies if it's given the helping hand not the Boot of the British Government. 
Posted: May 24 2008, 07:13 AM by viewfromtheothersideofthefence | with 1 comment(s)
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How Will The Forthcoming Recession Affect You?
Agriculture looks to be in a rosy position at the moment!  Milk price is up.  Beef price is up.  Lamb prices are recovering.  Pigs are still struggling but a continued marketing campaign should see that improve.    

Agriculture looks to be in a rosy position at the moment!  Milk price is up.  Beef price is up.  Lamb prices are recovering.  Pigs are still struggling but a continued marketing campaign should see that improve. 

But we still hear cries the industry will collapse unless farm gate prices rise further.

Oh, I almost forgot, grain prices are double this time last year.

Unfortunately that's what has taken the shine from the livestock industry price rises over the last twelve months. 

The thing is, Joe Public has really not complained about the price rises yet.  The thing is, fuel has also nearly doubled over the last year.  The price rise of food pales into obscurity by comparison. 

However when inflation starts to filter through in the next 6 months, (already the Retail Prices Index has just been announced this week at 3%,) the people will really start to notice.  Partly because the press will start to analyze why inflation is rising.  If house prices continue to fall we just need a few job loses in construction and marketing and we will be deep into recession. The Government wants to keep a lid on inflation and Gordon has promised to do so.  It will be his downfall.

All these land sales at ridiculous prices will soon hit home, if not sink a few businesses.  Profitability in British Agriculture is based on premium products.  In a recession premium brands are the first to be dropped by the consumer.  Especially when the supermarkets wants to keep its profits up.  Will they turn to high turnover and feet through the door, and not to promote the premium product line that has the most margin.  Only time will tell.  In a recession it's about self-preservation.

Don't think that the supermarkets haven't thought about this.  Sorry am I being too cynical.  Isn't that why they are being helpful to producers at the moment? 

Alright they have to be helpful at the moment because the competition commission is breathing down their necks.  If they have the largest range of products in store this gives them the largest percentage of all food shopping taking place within the supermarkets.  Then when it comes to recession they control the entire food market and can promote or drop any product they like. 

If it's a premium product on contract through the supermarket you're highly unlikely to have another outlet to sell your product. 

Somebody's bitter experience led to the phrase "Don't put all you're eggs in one basket." 

That's not just aimed at the free-range poultry producers!!
Posted: May 17 2008, 08:53 PM by viewfromtheothersideofthefence | with 2 comment(s)