Commitment to home food call
NFU representatives have demanded a greater slice of the £99bn domestic grocery market to safeguard supplies of produce.
At the launch of Tescos Understanding the Modern Supply Chain seminars, NFU livestock committee chairman Les Armstrong warned retailers that farmers were close to pulling back from mainstream production.
At the event, held at Harper Adams University College, Shropshire, Mr Armstrong said he was typical of the 9300 premises affected by foot-and-mouth.
"Many of us want to resume farming, but will not commit ourselves unless there is a clear message that we have a buyer for our produce willing to pay a fair price. Without that commitment we face returning to an industry on a downward spiral, a non-prospect."
British agricultures annual turnover of £16.3bn was dwarfed by the retail value of domestic groceries at £99bn, said James Walton, a business analyst at the Institute of Grocery Distribution. But the difference was not all down to the retail sector; processing and manufacturing had an annual turnover of £73.4bn and loaded significant costs.
Tesco red meat category manager Matt Simister said the companys average retail price for lamb over the past six months was just under £2.10/kg. One-third of the retail price was paid to producers, one-third was absorbed by processing costs and the remainder split roughly 40% for packaging and 60% for in-store costs for wastage, handling and shrinkage.
These figures alarmed producers. "That tells me there is a huge amount of cost being built into the system over which I have no control," said Mr Armstrong. *