Food for thought as consumers opt for cheaper products

Published on Sunday 26 October 2008 18:16

TAKING a wander around the giant SIAL food trade fair and exhibition in Paris last Monday morning, the place appeared to be busy and most stands were thronged with potential customers. But there was something different from all the many previous occasions when I have attended this great event. It took a while to dawn on me just what had changed, then I got it: people were wondering where they be will be this time next year and whether the businesses they are involved in have a future.

It is easy to say that people must eat and that the food industry and farming has a bright future. Consumers have to eat, but I detect that the pattern of shopping and expenditure is altering fast. My walk yesterday morning to the bottom of Leith Walk in Edinburgh and a tour around the vast new Lidl store confirmed that impression in no uncertain terms.

The shoppers I observed were by no means all in the lower income bracket. There were clearly some well-heeled ladies – one can tell by the handbags – carefully considering what they were going to purchase. Interrupting ladies in the midst of their shopping can be a shade hazardous, but eventually I was bold enough to engage one in conversation.

After a few less than complimentary remarks regarding the weather over the weekend, I ventured to ask my new acquaintance her views on shopping. If she mentioned value-for-money once she must have repeated that same phrase at least half-a-dozen times.

So what about farm assurance and country of origin? The subsequent response took me aback. This lady, and she assured me that many of her friends felt the same, was of the view that while these things might have mattered in the past and influenced purchasing decisions, it is value for money that counts most in this new and increasingly austere world.

Whether that brief conversation is truly representative of the vast bulk of consumers is difficult to gauge, but I suspect it may well be. Some sections of the media have been ranting on about food price inflation for months and, by implication, suggesting that farmers are to blame for rising prices.

This is, of course utter nonsense, and the reality is that most items of food in real terms have never been cheaper. However, the farmer sitting in his 4x4 will have a hard job making that point to the average consumer! Yes, it is true that food prices have tended to rise, but some should actually be falling.

With the price of a tonne of wheat way off the peak values of six months ago one would have thought it only reasonable that the cost of a loaf of bread should come down. No chance, I am told, as most of the wheat was bought forward on contract.

A reduction in the price of lamb in the supermarkets and butchers' shops is also merited, given the collapse in the trade over the past two weeks. Well, believe it or not, that is precisely what has happened.

As of the end of last week, according to the meat services division of the Agricultural and Horticultural Development Board, a whole leg of lamb in a typical Scottish shop at 9.33 per kilo was 33p per kilo cheaper than seven days previously.

Now that is value for money, but there must be a suspicion that there is little profit in that transaction for the farmer who is now getting little more than 110p per kilo when he sell his lambs on a liveweight basis through an auction mart.

FARMING leaders and agriculture ministers will be in Luxembourg this week attempting to wrap up of the fine details of the "health check" of the common agricultural policy.

This may not be quite so simple as many imagine with signs of a growing divergence among the major nations.

France and Ireland are clearly keen on maintaining some form of direct support for their farmers, even it is called something else. However, the UK will have none of that and wants to see all remaining links between support and production severed for good. The theory of that course of action is attractive, but theories and practicalities do not always run in parallel.

It is completely crackers that a farmer can virtually pack up all forms of production and still receive his large annual single farm payment cheque.

Technically, he must meet the terms of the "cross-compliance" regulations, but they amount to little more than keeping the place tidy. That is hardly value for money for taxpayers.

Agriculture and farming should be principally concerned with producing food, albeit with an element of environmental sensitivity. However, over the past two decades farming and rural society in general has become increasingly fettered by mostly mindless regulations.

Fortunately agriculture is a devolved matter for Scotland, but no doubt Hilary Benn, or one of his cohorts from Defra (department of the environment, food and rural affairs) will be in Luxembourg.

If Benn and his team return from the negotiations with more rules and regulations, then Defra will be well and truly worthy of one of the kinder descriptions applied to it – department for the elimination of farming and rural affairs.

Personally, though I suspect it would be impossible, I would scrap the CAP and return to something akin to what the UK had prior to joining what was then the European Economic Community.

Back in those days there was an annual price review when guaranteed levels of return to producers were fixed. If the market price fell below that level, then farmers were compensated through deficiency payments. It was a simple system that worked relatively well – and provided value for money.