CAP reform promise if price signals right

FARMERS MUST be given the right price signals by processors and retailers if they are to adapt to the new world of decoupled support.

Their success and that of the entire food chain depends on it, says NFU Scotland president John Kinnaird.

He told delegates at the SAC Outlook conference in Edinburgh on Tuesday (Nov 16) that CAP reform offered a promising future.

“We must focus on producing at the right time, to the right specification. And we must identify our customers and provide what they need.

“In short, we must become more astute, efficient and focused. We must know our costs and trim them wherever possible. Of course the single farm payment will still be available to businesses, but we must not allow it to undermine the true value of our produce in the same way as the old system did.”

CAP reform meant price was now everything, he said. “As farmers, we will become more acutely aware of our costs and we will know exactly what our incentive to produce will be. And the market also has to adapt to this shift in emphasis.

“It was interesting that much of the CAP reform debate was marked by processors, and apparently retailers, expressing concerns about future beef supplies. And yet, in the past few weeks, beef prices have fallen dramatically. What signal does that send to producers who are being told to be more market-focused?

“The power to secure supplies rests in the hands of buyers and they must react to their new responsibility.”

One way to address the imbalance of power in the supply chain was to give teeth to the supermarket code of conduct, said Mr Kinnaird. “Introduced three years ago, it has been totally ineffective. The fear factor among suppliers means that complaining is not an option.”

There had to be greater accountability in the food supply chain, and that would take political intervention, he said. The code had to cover the whole food chain and must also be given legal force. “We are not asking for the earth. All we are asking for is for it to work.”