The Welsh sheep industry could be reduced to half its size in just two years unless supermarkets pay producers more, Rees Roberts, chairman of Hybu Cig Cymru (Meat Promotion Wales) warned on the opening day of the Royal Welsh Winter Fair.
“Make no mistake – the industry in Wales is in crisis and the whole traditional Welsh rural way of life is under threat,” Mr Roberts told the fair.
“We are facing economic meltdown. It is possible that we could come to this event in two years’ time to discover that half of the Welsh sheep industry will have been wiped out.”
Supermarkets now accounted for more than two in every three sales of Welsh lamb and they had crushed the farmgate price in the past six months. “Farmgate prices have gone into freefall. They stood at just 73.65p/kg liveweight on 3 November – 29% lower than at the same time in 2006, when returns were not brilliant – and now cover less than half of production cost,” said Mr Roberts.
“We estimate that Welsh sheep farmers have lost £30m since early August. This is not sustainable. It is not possible for Welsh farmers to stay in business on this basis. It is obscene that, week after week, supermarkets are content to pick the pockets of the rest of the industry to put profits on the plates of shareholders,” Mr Roberts said.
He urged major retailers to immediately boost farmgate prices, stock more locally produced red meat and reduce imports.
“I am sure that the gravity of the argument will persuade them to take action as it is in the interests of the whole of the supply chain to protect the sustainability of our industry in Wales and the quality red meat that we produce here.”
Mr Roberts claimed that farmers’ single farm payments were bolstering the hopelessly low pricing structure imposed by the retail sector. “This is very short-sighted, as supermarkets are just a stone’s throw away from causing permanent damage to a proud and resilient industry, to the communities it supports and to the stunning landscapes and unique environments that it looks after,” he said.