"90% think legislation should force supermarkets to pay a fair price to farmers"

Brendan Burgess

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I heard this on the 7 am news on RTE Radio 1 this morning.

Here is the heading on the RTE website

90% of consumers want new laws to protect farmers

Almost 90% of consumers believe that legislation should be introduced to ensure that farmers receive a fair price for their food from supermarkets, according to a new Ipsos/MRBI survey.
The RTE website does mention that the survey was commissioned by AgriAware a farming body but the radio news did not.

I wonder where the sample was chosen from?

I would like to see the question which was asked?
 

SoylentGreen

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I was happy to pay 6c for my vegetables at Christmas and delicious they were too. I am lucky that I have an Aldi and Lidl within a mile from my home as well as a SuperValu. I enjoy their weekly 49c selection of vegetables. This week I had a cabbage, turnip, carrotts, potatoes. scallions, pears, tomatoes, mango. All lovely, all fresh all less than 50c each.
I am off now to buy my loose pistachio nuts from Aldi that are far cheaper than those packaged variety. I will also pay 79c for a packet of vegetable seeds from either Aldi or Lidl rather than pay over €3 elswehere for too many seeds that I will never get to use.
Later on today I will phone around to get a better deal on my house insurance and I will check pumps.ie to see who has the cheapest petrol. Last week I picked up return flights for two to France with Ryanair for less than €100.
I used a couple of coupons during the week to get a discount on a very tasty breakfast in McDonalds and used some coupons to get a discount on some pizzas as well.
I am happy to give my business to those companies and people who provide me with what I want rather than what they want.
 

T McGibney

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Our national news media seems incapable of distinguishing genuine news from sectional self-serving lobbying and spin.

From my knowledge of farmers, the vast majority of them wouldn't for a minute support further socialist-style price-fixing laws in their sector, which is already all but choked by red tape.
 

Janet

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I'd find it very interesting to know what kind of sample they used to. While I can believe that many people would agree that farmers should get a fair price for their product (especially if the question were framed in such a way as to make them seem very mean/nasty if they answered to the contrary), I think you'd have a tough time finding 90% of consumers who are willing to put their money where their mouths are!
 

T McGibney

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If you ask anyone "Do you think laws should be introduced to compel supermarkets to pay a fair price to farmers?", they will almost invariably say "yes".

This is not news.

(The fact that supermarkets don't buy produce from farmers, but from processors and wholesalers, is neither here nor there, but it starkly illustrates the infantile level of the coverage.)
 

Brendan Burgess

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I emailed AgriAware (using the form on their website)and asked for a copy of the report and the survey questionnaire used.

The email was bounced back.

According to my own research...

"99% of consumers hate having to fill in forms on websites instead of sending simple emails. 100% hate when they are not answered"
 

Gerry Canning

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With the farmers on this one.

On potatoes; Mr Farmer gets 20% , he has done the work/risk etc.
By sale time, Mr Seller etc get 80%.
Given that Mr Farmer has graded/washed/packaged and probably delivered the spuds ,ie done the work it is just unfair that Mr Seller takes 80%.

Today Mr Farmer on potatoes gets circa 100 euro per ton @ production cost 200 per ton. @ 17 ton to acre he loses ,1700 per acre.
Good grower @ 200 acres loses 340,000.
Very quickly we could lose a sector that we are good at and that gives employment.
eg. We lost Irish Sugar when we could still have very good employment in it ,by stupid actions by our last government.It means we pay top price for sugar without having the skill/employment benefits of our own industry.
eg. Rooster potatoes are still on patent and an Irish company/irish employer benefits.

I would be very worried if we left ourselves on any food we can efficiently produce to the vagaries of the market.
Very few consumers are as Janet says are willing to put their money where their mouths are, but ask yourself , if we lose potato growers and there is a food shortage , do you think we will still get food artificially cheap.

I sense an anti farming note in the thread.
From my view an artificial price will not help us in any way other than short term.
 

44brendan

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Potatoes is probably not the best example as in general most of the good potato farmers can get a very high per hct return on potato crop (weather permitting). The main issue of concern for farmers currently is beef prices. These are controlled by a small cartel of beef processors and it is extremely difficult for even the best of farmers to make a profit on beef. most are making losses and these losses are sustained by the Single Farm Payment. These payments are due to reduce for many farmers from next year and in addition the elimination of milk quotas will encourage farmers to focus exclusively on milk. In countries like New Zealand bull calves are being killed at birth as price achieved is not worth the expense of keeping them! There is profit in beef, but it is being kept by the processors and the supermarkets and as a result we are likley to see a significant shortgage in Irish beef over the next few years.
 

Gerry Canning

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44Brendan,
Nice comment ,on were beef prices are likely to go to.
On the previous threads it was vegetables that were highlighted , hence my Spud comment..I just threw in sugar to show how a viable Irish business was killed.

I wonder when Beef goes up a lot and the carrots cost 1 euro each , will people be so happy to pay ?

I do believe the worker , in this case Mr Farmer , should be protected from the short-termism of the market.
The Market will willingly hang us all!
 

T McGibney

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I think you are missing the point Gerry that farmers don't supply supermarkets, they supply wholesalers and processors who supply supermarkets. Hence the question of whether or not supermarkets "are paying fair prices to farmers" is moot.

There is a host of reasons why farmers receive a small proportion of the ultimate sale price of food products, but these are outside the scope of the Agri-Aware "survey" and by extension, this discussion.

The Aldi 6 cent carrots promotion seems to be a bone of contention here. I don't for a second understand why. Price promotions are a fact of life and are driven by marketing considerations, in an effort to increase interest in, and demand for, consumer products.

Should the farmer lobbies jump up and down every time a supermarket organises a "buy one get one free" promotion on, say, bread or yoghurt?

And its not just supermarkets. Companies like Glanbia and Kerry (where farmers hold significant influence if not outright control) often run price promotions including free sample offers on their own product ranges. These companies are expert marketers, and have a tremendous track record in both marketing and creating massive added value both for themselves and the farmers who supply them.

Btw Gerry, I am most certainly not anti-farmer. I come from a farming background, have many farming clients, and have several close relatives & friends who are farmers.
 

ang1170

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I think you are missing the point Gerry that farmers don't supply supermarkets, they supply wholesalers and processors who supply supermarkets. Hence the question of whether or not supermarkets "are paying fair prices to farmers" is moot.

I don't believe that to be the case for much fresh produce: supermarkets deal with a small number of high volume producers direct.

This issue is the imbalance in power in the relationship: it rests almost entirely with the large supermarkets, who use predatory pricing to put independent retailers out of business, so producers end-up with nowhere else to sell their product.

For sure the survey is biased (you can get pretty much any response you like, depending on the questions asked), but the underlying truth is there.

The food business is not a free and open market, with multiple producers, wholesalers and retailers all competing and the end consumer benefiting as those rubbishing the survey seem to think. There is a massive imbalance in power in the relationships, and it is naïve to think it's in consumers best interests to pay a few cents for goods that cannot be produced at that level.

The Aldi 6 cent carrots promotion seems to be a bone of contention here. I don't for a second understand why. Price promotions are a fact of life and are driven by marketing considerations, in an effort to increase interest in, and demand for, consumer products.

Should the farmer lobbies jump up and down every time a supermarket organises a "buy one get one free" promotion on, say, bread or yoghurt?

If retailers want to promote goods by reducing their sell price, there's no issue. However, that's not what happens: this cost of the promotion is forced back on the producer, who is often forced to sell at below cost. The cost of the promotion is borne by the producer, the benefit (increased sales of other goods) received by the retailer. It is a completely unbalanced relationship.
 

T McGibney

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I don't believe that to be the case for much fresh produce: supermarkets deal with a small number of high volume producers direct.

Maybe so for certain categories for veg, but certainly not for meat or meat products. Equally, I wouldn't necessarily class a large scale "grow, package & market" vegetable operation as a farmer, just as I wouldn't count Larry Goodman as a farmer, although he technically is one.

If retailers want to promote goods by reducing their sell price, there's no issue. However, that's not what happens: this cost of the promotion is forced back on the producer, who is often forced to sell at below cost. The cost of the promotion is borne by the producer, the benefit (increased sales of other goods) received by the retailer. It is a completely unbalanced relationship.

Why then do large and very successful companies like Kerry & Glanbia persist in using such promotions in their own marketing campaigns?
 

Gerry Canning

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T Mc Gibney; I am not trying to run a pro V anti farmer issue, and do accept that any larger farm is in the business of farming,
.
My big concern is that, I do not wish food to become like hard goods eg cars . Food is too important to leave to the market.
As a society we put protection on a variety of businesses that we feel are vital.
I just think food is one of them.
I have not read the survey but would think that instinctively we all know that for our long term security our producers need some protection from whoever buys/sells produce from the farm..
 

DerKaiser

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I do think that the wildly fluctuating prices received by food producers is a concern for us all.

I'm a reasonably strong believer in free markets, but I've come round to the view that an aggressively "laissez faire" stance in relation to demand and supply of basic human needs like food and shelter will lead us into trouble.

In relation to housing, there's not many would now agree that a lack of action on containing the bubble (credit supply, etc) was appropriate.

In the same way, the likes of below cost selling in relation to food could have severe consequences. As an example, there was a trend from a few years ago to switch from crop production to biofuel - this did not help when there were animal feed shortages in recent winters.

At the moment fluctuating food prices may be bearable as food comprises a relatively small portion of most family budgets (compared to the past or to poorer countries). With a growing world population and threats to food supply, we may come to regret not guaranteeing steady supply through ensuring producers were fairly rewarded.
 

T McGibney

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As a society we put protection on a variety of businesses that we feel are vital.
I just think food is one of them.
I have not read the survey but would think that instinctively we all know that for our long term security our producers need some protection from whoever buys/sells produce from the farm..

What's the point in doing so if processors, wholesalers and retailers can circumvent this "protection" by simply turning around and importing their product requirements - as is already increasingly the case with liquid milk?
 

44brendan

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Price protection in Agriculture, got us into a situation where there was no onus on farmers to maximise efficiency & productivity. Withdrawal of protections in New Zealand resulted in significant changes in that market. Most of the less efficient producers had to exit farming and were replaced by more highly efficient producers. result was the rapid emergence of NZ as one of the World's biggest suppliers of dairy produce. Protectionism by its very nature protects inefficiency and while Ireland's climate gives us many a reason to complain it is ideal for cheap grass production, which should have resulted in us being up there with NZ in supply of Milk/Beef. The difficulties that farmers are currently experiencing in supply of beef/vegatables is the Cartel approach by the meat factories/supermarkets. There is no simple solution to this and introduction of price protection is likely to lead to more problems than solutions! Just for example, at one end of the scale there are farmers who can produce milk at 6c per litre and at the other end we have many whose production costs are 25/26c per litre. In a free market the latter would either have to improve efficiency or exit the market, thus freeing up the land for more efficient producers.
 

Brendan Burgess

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How many people actually think that legislation should be brought in to ensure that the supermarket pays the farmer a fair price?

I don't think it should be legislated for at all.
 

Janet

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I don't know that I think legislation should be brought in to necessarily make supermarkets pay farmers a fair price.

I do think there could be scope for legislation to rein in supermarkets (and other large buyers such as fast food chains) with regard to some of the less than ethical practices we hear about (insisting on x price then refusing delivery from one farmer because they've already filled their quota with another one). What form that could take I have no idea. Perhaps I'm just being a bit too idealistic and naive.

And I also think, and have done for many years, that consumers badly need to start thinking more about and caring more about where their food comes from.
 
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