60% of farmers ‘at financial risk from supermarket buying behaviour’ – survey

Some six in 10 farmers say they consider their farm to be at financial risk because of supermarket buying behaviour, with the industry branding the current regulatory scheme “unfit for purpose”.

Some 68% of farmers say making a living through farming has “never been harder” while 69% believe the buying relationship between growers and retailers has deteriorated, according to a study led by vegetable box company Riverford.

Almost every farmer surveyed (99%) said they had faced at least one ‘unfair’ practice, including cancelled orders, late payments, and unfavourable, unfair or unprofitable pricing.

Supermarkets rejecting produce over unreasonable demands, such as requiring a specific colour, size or shape, leading to waste or a lower price that does not cover costs, are also cited, as is no notice from buyers for changed terms.

Riverford said this was piling pressure on stretched growers, with 82% of respondents saying unfair supermarket practices were contributing to stress and poor mental health among the farming community.

The industry is calling for a single food supply chain regulator to protect growers and ensure fair treatment by supermarkets, and to address the “power imbalance” between the two.

A survey for the study found 76% of farmers believe the current supply chain regulatory system does not protect farmers from unfair supermarket practices, and is unfit for purpose.

Some 86 MPs have signed an Early Day Motion calling to merge the existing supply chain watchdogs, currently split across two government departments, into one stronger, more effective body.

More than 3,000 people have also written to their MPs in support of better regulation.

Apple farmer Richard Stogdon, from Sussex, said the relationship between growers and supermarkets had “substantively deteriorated”, adding: “We take enormous risks in growing these crops.”

Haydn Evans, a dairy farmer from Carmarthen in Wales, said he successfully pressured his milk buyer to pass on a 1p per litre price rise from supermarkets, only to find out that the buyer was then de-listed just three months later.

He said: “Supermarkets know how much they’re taking and how vulnerable farmers are – they exploit the power imbalance.

“They know that you are always negotiating with two hands tied behind your back.”

Third-generation farmer Jonathan Hoskyns has also stopped supplying supermarkets altogether, saying: “I don’t miss the stress and I don’t miss the worry of not knowing what our fruit is worth until it has all been sold.”

Riverford’s survey suggests that 65% of farmers believe they have no choice but to accept supermarkets’ terms for fear of being de-listed, while 76% feel under financial pressure from supermarket buying practices.

Riverford founder Guy Singh Watson said: “For three years our #GetFairAboutFarming campaign has been calling for a regulator with real teeth, one that can stand up to supermarkets and help address the huge imbalance of power in our supply chains.

“Over 113,000 people have backed that call, and even Parliament has debated it, yet farmers are still being failed by a system that’s meant to protect them.

“The Groceries Code Adjudicator’s own research suggests things are improving and that may be the case for the large companies with supermarket contracts, but our findings show the opposite is true for the small and medium-sized family farms that produce most of our food.

“The problem is worse than ever, with 69% of farmers saying relations with supermarkets have deteriorated over the last two years.

“Farming shouldn’t feel like survival. It should be a livelihood to be proud of: producing good food, caring for the land and looking after the people who work it.

“How can farmers do the right thing for their soil, their animals and the planet if they’re squeezed for every penny and lack the funds and security to invest in farming well for the long term? And how can shoppers make good choices when they’re being misled by supermarket farmwashing?”

Georgina Edwards, sustainable farming campaign officer at the food and farming alliance Sustain, said: “The latest research from Riverford clearly shows that farmers continue to be negatively affected by unfair trading practices by supermarkets.

“Orders cancelled at short notice and delayed payments are still causing harm to farming businesses and farmers’ mental health.

“It is deeply concerning that three-quarters of farmers say that retailers’ behaviour is driving farms towards more intensive, environmentally damaging practices.

“Without taking more ambitious action to improve supply chain fairness, the Government will fail to address the issue of farm profitability and support farmers in the transition to nature-friendly farming methods.”

On Thursday, Environment Secretary Emma Reynolds told the CLA Rural Business conference that the Government was supporting the nation’s farmers to drive growth – with rural Britain contributing £259 billion to the economy and supporting more than half a million businesses.

She said: “This Government sees the rural economy as fundamental to our growth mission. When rural Britain succeeds, the whole country succeeds.

“From food production to protecting nature, we are acting on our ambitions for a countryside where businesses flourish, good jobs are created, and our communities are strengthened.”

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “We support stronger regulation across the supply chain, which is why we backed the agricultural adjudicator in supporting pig and poultry farmers.

“However, the Groceries Code Adjudicator (GCA) was set up for a specific purpose, to regulate supply chain relations between supermarkets and their direct suppliers, following an extensive investigation by the Government’s competition regulator.

“Many farmers do not supply products that enter retail supply chains. Instead, they supply for hospitality, large food manufacturers or Government food procurement.

“Extending the GCA’s remit to cover these sectors would not be fair, it would go beyond the regulator’s original recommendations and place unnecessary costs onto supermarket supply chains.”

Censuswide surveyed 200 horticulture farmers who currently have direct contracts with supermarkets or who have traded with supermarkets in the last five years, between October 2-10.