NBA with a beef over possible government price pressure

There has been very little movement in the retail price of beef over the past two years, but the NBA believes there is a strong case for higher returns to producers to compensate for the loss of direct subsidy payments following the reforms of the Common Agricultural Policy.

The NBA has written to David Miliband, the UK Agriculture Secretary, asking for some straight answers amid allegations that the government has been leaning on the major multiples.

Duff Burrell, the chairman of the NBA, commented: "If this is true it is unacceptable because it means that the government is encouraging farmers to reconnect with the market at the same time as it interferes with the value fixing process on which producers depend for survival.

"There can be no doubt that the subsidy system introduced after the Second World War was aimed at making sure there were ample supplies of cheap food for the nation. Now that this support system has been dismantled, there should be an automatic compensatory rise in retail prices. However, this has not so far happened and farmers have been left on their own to continue to produce cheap food because there has been no help from the market."

Figures from the government's National Statistics Office show quite clearly that, after adjusting for inflation, beef is almost 30 per cent cheaper than it was 20 years ago. The NBA has argued consistently over the past two years that producers need a deadweight price of 250p per kilo to make a decent profit without subsidising enterprise with the single farm payment. Prices in Scotland are currently in the region of 224p per kilo, but in England and Wales returns are at least 15p per kilo lower in most regions.

Burrell added: "We have asked Miliband directly whether the government is actively discouraging retailers, who are very keen to maintain a careful relationship with government, from meeting the need to raise the retail value of profitless products like beef. We look forward to his reply."