Virgin Money’s head of agriculture, Brian Richardson, has said that the recent shortages of some fresh foods in supermarkets may serve as a “salutary lesson that might teach us to value UK farm produce more”.
Richardson said the reasons for the recent shortages include the European droughts of last summer, rough seas and thwarted logistics.
He credited the UK’s farming sector with doing a “fantastic job” in recent years at keeping shelves full of “fantastic, high-quality, home-grown produce at incredible value for money”, despite the rising input costs they face.
“Over the last year farmers have seen their costs rise dramatically, with the headline suggesting an increase of over 25%,” he said.
“Shoppers have found this inflation reflected in food prices, but very little of this has found its way down to the grower.
“As a result, many UK farmers have simply stopped producing. The risks of waiting for a better price are just too high.”
Richardson said the agricultural sector warned the government and the country of the possibility of food shortages if farm prices did not increase, but “intense competition among retailers to keep food prices low meant these warnings were largely ignored”.
“So minor challenges elsewhere in the supply chain have led to empty shelves – with Brexit probably playing its part in reducing the enthusiasm of producers in mainland Europe to supply the UK market,” he said.
Farmers will ‘stop producing’
However, Richardson warned that more farmers will stop producing if input costs remain high and farmgate prices stay unchanged.
“The recent shortages have clearly shown that the market is not limitless and unless primary producers in the UK can see a return, then they will simply stop producing,” he said.
“As has been seen in recent weeks, it is not as easy to fill the gap by buying overseas in this post-Brexit world.
“Of course, retailers want to offer value to their customer, but as costs increase, primary producers cannot be expected to soak up all those increased costs and, in many cases, lose money.
“There is plenty of data available on all the factors that can affect the cost of production, so it is not difficult to manage and maintain supply from farmers through a fair pricing structure.”
Richardson UK farmers continue to work on “incredibly slim margins” and, in order for them to maintain a consistent food supply and to avoid more shortages, lessons must be learned.
This lesson, he said, is “UK farmers must be paid a fair price for what they produce”.
