Editor’s view: Murky markets don’t help farmer or consumer
© Warakorn/Adobe Stock Murky markets. There are plenty of them in farming.
Even for those in the industry it can be difficult to discern the twists and turns food takes between the farm gate and the consumer’s plate.
That’s why FW deputy editor Abi Kay’s exclusive story this week on a major fraud investigation into a supermarket and supplier for mislabelling imported beef as British comes as a disappointment, but not a surprise.
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With the investigation ongoing, many details are still to emerge, including the identity of the businesses under investigation.
However, two things are already beyond doubt and deserve reasserting.
First, a proactive and well-resourced food fraud unit is of vital importance.
It is excellent to hear that the National Food Crime Unit (NFCU), a part of the Food Standards Agency that was established in the wake of the horsemeat scandal, is rooting out alleged misbehaviour.
Duping consumers
As food prices rise and inflation bites, the incentive for retailers, wholesalers and restaurants to dupe consumers is greater than ever.
As we have seen with food scandals in the past, mislabelling products and other frauds can lead to terrible damage to the reputation of the whole sector.
Indeed, red meat is one of the NFCU’s current nine strategic priorities and it is to be hoped that it, alongside local authorities and the police, will send a message with this action that meddling with food is a category of crime that will not go unpunished.
Second – and this is a broader issue but it bears repeating – transparency in any marketplace is beneficial to the public.
This is as true in the marketplace for farming’s outputs as it is for its inputs.
True prices for beef and lamb are readily available because a significant portion of them are still sold in a live ring, where there is a multitude of buyers and sellers.
In other sectors, as consolidation occurs, an ever-thicker veil of secrecy is frequently drawn over the interaction between buyer and seller, shifting power to the buyer, who is able to impose a take-it-or-leave-it price rather than compete for product.
This is a complex topic worthy of a whole evening’s discussion. I’m aware that it’s not just farmers and consumers that can get wrong-footed by the vagaries of the market, but also bigger players.
Spare a thought for traders in another murky market – the fertiliser supply industry – that since Christmas has seen a much greater than expected product price drop. It’s not just farmers who are unhappy they didn’t foresee a slump in the price of nitrogen, but importers as well.
They, I am told, were not aware that non-traditional suppliers such as hedge funds entered the market after the price spiralled last year, sensing an opportunity to make a quick buck.
This has left the UK market oversupplied right at the time the global price has tumbled.
Traders are now having to confront a triple whammy of losses on sales, impending trade credit deadlines from the manufacturer and hefty port storage charges for not moving product away from the dock.
Farmers who bought product early benefited mightily last year, and they’ve lost out this year.
This is not a conspiracy – in the world of business there are always winners and losers.
But every part of the supply chain benefits when muscular regulators clearly define where legitimate rough-and-tumble ends, and criminality begins.