Congratulations to Christine Tacon on her appointment as the first ever groceries code adjudicator.
What a clever move on the government’s part to appoint someone with 11 years’ experience of running Britain’s largest farm (which happened to belong to the Co-operative supermarket chain) to oversee the relationship between UK farmers and the supermarkets they supply.
That said, I fear a lot of farmers will be asking themselves: What on earth can “Britain’s biggest farmer” (until recently Ms Tacon farmed 20,000ha) possibly know about what it is like for a small-scale family farm to find itself in a price negotiation or trading dispute with the likes of Tesco, Sainsbury’s or Asda?
Well, I thought much the same until I shared a platform with her a year ago in Scotland and found that she brought a lot of very grounded thinking to the Co-operative Farms that farmers of any size would understand.
For instance, despite the Co-operative Farms’ £60m turnover she never lost sight of what really matters in farming: the single farm payment. During her time with the Co-op (where an SFP of about £3.5m made up more than half the trading profit) she was so determined to protect that subsidy that she ruled out a beef enterprise.
Quite sensibly, she judged the potential risk of cross-compliance penalties, such as irregularities in cattle record keeping, were too great for the modest profits available from beef production. A few cattle passport or ear-tagging errors found by Defra inspectors during a cross-compliance inspection could have cost the Co-operative Farms hundreds of thousands or even millions of pounds because penalties are levied as a percentage of the SFP.
More impressive still was the fact that she took the highly unconventional step of halving the size of the Co-op farm business. Determined to involve the Co-operative Farms only in profitable production she gave up 20,000ha of land and at the same time turned a £6m annual loss into a £6m profit. With modern farm management gurus all so obsessed with “scale”, how many farmers would have had the courage to do that?
Of course, she arrives in her new job at a tough time for farmers. UK farm incomes are thought to be heavily down in 2012 and are forecast to have another tough year ahead (with their precious SFPs likely to be heavily reduced by 2015). But at least she enters the fray with the power to fine retailers found guilty of breaching the Groceries Supply Code.
And with the recent “horseburger” scandal, supermarkets have been reminded that it is not in anyone’s interest to insist on ever higher production standards from UK farmers while at the same time often seeking the cheapest products they can find for their “value” ranges from abroad where traceability can be a problem.
But supermarkets are under pressure, too, as consumers continue to shop on price as living standards for many continue to fall. With the exception of Waitrose (which has a dynamic all its own) the aggressive discount chains such as Lidl and Aldi are enjoying record-breaking growth while the likes of Tesco, Sainsbury’s and Morrisons show more modest trading (Morrisons has even reported a recent reduction in sales).
Good luck to Ms Tacon, then, with this exciting new challenge. She will bring a degree of good sense and fair play to the “food chain”, not least because she instinctively understands that farmers are at the bottom of it.
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