AgriCultured
Briefing: Five Oxfordshire Farmers
This Briefing accompanies the radio
documentary
‘AgriCultured: Five Oxfordshire Farmers’. The briefing sets the
experience of
the Oxfordshire farmers in the context of national and international
changes in
agriculture over the last fifty years. The farmers quoted in this
briefing can
be heard in the in the radio documentary and full transcripts of their
interviews are also available. The Oxfordshire farmers were
interviewed in May
and June 2002.
The farming crisis
There
is a
global crisis in farming, caused primarily by the collapse in the price
that
farmers receive for their produce. This crisis has sent shock waves
through the
UK farming industry as farming undergoes what has been described as the
most
fundamental restructuring since the Corn Laws.
Whilst
the
foot and mouth outbreak in 2001 has forced many livestock farmers,
including
Oxfordshire pig farmer David Orpwood, to leave farming, foot and mouth
disease
is in reality only the latest in a series of UK specific factors
(including
food safety scares, such as BSE, and the strong pound), which have
exacerbated
the impact of the global crisis in farming.
“Foot and mouth cost me last year, on my
budgeted income
it cost me, £75,600 last year.….It's done enormous damage to
agriculture in
this country, and it was the final straw, I couldn't see myself (how)
to break
out of, what I saw was a spiral down of my net worth.”[1]
David Orpwood, farmer
The declining farm
workforce:
losing small and family farmers at an alarming rate
The
number
of people working in agriculture has consistently been in decline for
the past
fifty years. In 1949 there were aproximately 570,000 farmers and farm
workers
in England and Wales, by 2001 there were 430,000.[2]
In
part
this loss of labour from the land has been due to the post war
industrialisation of farming and the replacement of farm labour by
machinery.
“Now with the big high-density bailers,
like
last year
I saw the guys go-in, they'd bailed and cleared the whole farm in three
days,
and that was one man, whereas when we were doing it, we'd have been
like me
bailing, three guys pitching and loading bails and another couple
stacking them
back in the barn. And so five men working for thirty days, that's one
hundred
and fifty men days replaced by three days. It's just incredible; I mean
its (a)
fundamental difference.” [3]
Clive Hawes, farmer
In
England,
agriculture employed 435,781 farmers and farmworkers in 1990, by 1995
this had
reduced to 400,887 and in 2002 to 371,824.[4] The pace of the loss of
farmers and farm workers has
accelerated markedly in recent years with nearly 65,000 farmers and
farm
workers leaving farming between 1990 and 2002. The government expects
that by
2005, 25% of the remaining farms in the UK, predominantly the smaller
farms,
will have gone out of business or merged, with a further 50,000 people
forced
to leave farming.[5]
The
Oxfordshire farming study found that 57% of farmers in the county are
aged over
fifty. Almost half (49%) of these farmers expect to retire in the next
ten
years, and 52% did not expect a family member to take over the farm.[6] Oxfordshire beef farmer,
Marilyn
Ivings, thinks it unlikely that any of her children will want to take
over the
family farm when she retires:
“I think they have a rosy view that they
would
love to
bring their children up on a farm, but they wouldn't want the hours,
they
wouldn't want the returns, and I don't think they would want the gamble
of it,
you know, the insecurity really……when we pop our clogs, I have an idea
that the
whole lot will be lotted up and sold.”[7]
Marilyn
Ivings, farmer
The farm income crisis
The
total
income, in real terms, generated by agriculture has been declining (by
around
70%) over the past 30 years.[8] Yet 69% of farmers are
still
reliant on farming as their primary source of income.[9] A survey by accountants
Deloitte & Touche found
that over the last five years net family farm incomes have fallen
dramatically;
from £80,000 in 1995/6 to £8,000 in 2000 and to
£2,500 during 2001, the
year of
foot and mouth.[10] Average farm incomes
increased to
£10,700 in 2001[11], and were set to rise to
£11,136 in
2002.[12] However incomes for some
farmers
still remained below the minimum wage.[13]
UK
farmers
received almost £2.5 billion in subsidies under the Common
Agricultural
Policy
in 2001.[14] But because subsidies
are
production-based (ie the more cereals you grow or the more animals you
have,
the greater the subsidy), the bulk of the subsidy goes to the larger
richer
farms.[15] It is estimated that 80%
of farm
subsidies go to 20% of farmers, but the majority of farmers (63%)
receive less
than £5,000 a year in farm subsidies and some farmers (pigs,
poultry
and
horticulture) receive no subsidies at all.[16]
In order to maintain
income levels in the face of falling
produce prices farmers have frequently attempted to increase their
efficiency
by getting onto the ‘technological treadmill’ of intensified
production:
borrowing money to purchase the latest equipment and relying heavily on
expensive chemical inputs and high yielding hybrid seeds. Jane Bowler,
a small
pig farmer, recalls that in the late 1960’s when farmers were also
suffering
from low prices that many expanded their farms and invested in new
technology:
“It (her
father’s farm) was about one hundred and fifty acres, and it was just
at that
point where everybody was getting quite a lot bigger, at least most
people
were, I think the dairy prices were difficult even then. There was the
milk
marketing board and all that then of course. The other thing was the
milk
churning. We were on milk churns then and so it was new practices and
machinery
really because everybody was going into bulk tanks and so this was the
whole
scenario, that you had to change your system really.”[17]
Jane Bowler, farmer
Agricultural
borrowing currently stands at an estimated all-time high of more than
£10
billion.[18] In 1999, 64% of farmers
borrowed
money to keep their farms going.[19]. Many are now saddled
with enormous
debts, which they have been unable to repay as farm incomes have fallen
further. According to a survey carried out by ADAS in 2000, 20% of
farmers were
worried about their futures and did not know what other work they could
do, 7%
felt that farming had no future.[20] Suicides among farmers
currently stand
at 59 per year, more than one a week.[21]
Faced
with
falling incomes, 27% of farmers, like Clive Hawes and Charles Peers,
have
diversified into activities outside food production.
[22], Clive and his wife run
a nursing
home and Charles has developed holiday accommodation and converted some
of his
outbuildings into offices for rent. Factors such as location, structure
of the
business and available skills mean that for many diversification is not
an
option.
Others like David Orpwood are choosing to
leave
farming
all together.
“Due to
the total collapse in the industry, or the commodity price of the
industry, I
couldn't continue any longer without loosing everything I've got. I
sincerely
hope I won't loose my house although I'm prepared, well not prepared,
I'm
aware, in the meek and misty background that I might loose it, because
of the
amount of debt built up.”[23]
David
Orpwood, farmer
Farmgate prices below
the costs of
production
A survey by the Independent newspaper in 1999
found that
UK farmers were earning almost nothing from what they produce. For
virtually
every commodity in the survey, the farmgate price, the price farmers
were paid
for their produce was less than the cost of production.[24]
Cost of
production
Farmgate
price
Milk
between
18-21pp litre 18.5pp
litre
Pork
95p
per
kg
84p per kg
Bread
wheat
£95 per
tonne
£115 per tonne incl subsidy
Eggs
45.3p
per
dozen
27p per dozen
Potatoes
£77
per
tonne
£50-60 per tonne
And whilst the price of food has been falling
at
the
farmgate, there is no evidence that these falling prices are being
passed on to
consumers at the supermarket checkout.[25]
For example in 1998, a slump in lamb prices at livestock markets was
not
translated into supermarket prices and again in 2001 a slump in milk
prices did
not reduce the retail price.[26]
Farmers say they can't continue to deliver high quality produce,
landscape,
nature, food safety and animal welfare at these prices.[27]
There is however plenty of money in the food
production
system, but very little is getting back to the farmer. Most of the
money in the
food chain is instead going into the pockets of companies in the
processing and
retailing sectors: which are dominated by huge multinational food
corporations
like Unilever, Nestle and Kraft (part of Altria) and the big
supermarkets like
Asda and Tesco. In 2002, UK farmers earned £6.6 billion, whereas
UK
food
processors, manufacturers and retailers earned £36.9 billion.[28]
A Canadian study, which compared five year return on equity for
Canadian
farmers and for a number of multinational food corporations, found that
farmers
had a return on equity of only 0.7%, the corporations had considerably
higher
returns (Nestle 21.5%, Philip Morris (now Altria) 39.1%, Kellogg 41.6%).[29]
The global food
economy
The
global
trade in food has been going on for millennia. During the Roman Empire,
wine,
grains, salted meat and fish were imported into the UK; the spice trade
between
Asia and Europe flourished between the fifteenth and seventeenth
century and
the wealth of the British colonial era was built on global trading in
sugar,
coffee, tea and salt.
More
recently technological changes, including the intensification of
agriculture,
refrigeration and new processing technologies together with cheap air
transport, the emergence of powerful multinational food corporations
and the
rise of free market economics have supported the increased growth in
the global
trade in food over the past 30 years. EU imports of food have increased
by
between 4% and 289% over the last 30 years and exports by 164% and
1340% over
the same period.[30] The global trade in food
increased
three-fold between 1965 and 1998.[31]
Not only is the trade in food
a global
enterprise but the price of food is now determined on the world
commodity
market, rather than at the local or even national level. Although only
10% of
world food production is actually traded globally, that 10% sets the
market
price for the other 90%.[32] When, as there is now, a
surplus in
food production, commodity prices fall, and farmer’s incomes all around
the
world suffer.
This
global
market economy, supported by the World Trade Organisation’s Agreement
on
Agriculture and the European Union’s single market policy, requires
farmers to
become more internationally competitive in order to survive. It forces
UK
farmers into competition with farmers from other countries where
geography and
climate are more favourable, labour costs lower and environmental and
animal
welfare standards less stringent. Crops that could be produced locally
can now
be imported often at prices well below the UK cost of production. For
farmers
who cannot match the technology needed for intensive, large-scale
farming or
don’t have the advantage of favourable geography and climate, the
globalisation
of agriculture threatens their survival as farmers.
Dependence
on global export markets also means that farmers suffer losses when
there are
exchange rate fluctuations and economic downturns in other parts of the
world.
“The pound strengthened against the
deutschmark, the
Russians suddenly became bankrupt and they couldn't afford to buy any
meat, so
pig meat suffered, and the tiger economy went through a depression too
and they
were big importers of pig meat and so those three things took us apart
and the
fourth one of course was the EU had quite a lot of pig meat, we were
over
supplied of pig meat, and we lost all our export markets, so you know,
total
supply and demand…”[33]
David
Orpwood,
farmer
The
main
beneficiaries of the global food economy are the multinational
corporations who
have no allegiance to communities and switch from buying from one
farmer to
another and from one country to another in their search for the
cheapest price.
Concentration of
corporate power
Food
production both in the UK and globally is increasingly controlled by a
small
number of very large companies, this concentration of corporate power
is one of
the defining features of the global food economy.
“There are two hundred
thousand
farmers, dealing with, basically speaking, three supermarkets, two
grain
merchants, four fertiliser companies. Not a chance….. they've got
power, real
power.”[34]
Charles Peers,
organic
farmer
It
is no
surprise, given this market power imbalance between the multinational
food corporations
and the farmers that must do business with them, that farmers are
estimated to
receive only 9p of every £1 spent on food by consumers.[35]
Trends in Corporate
Agriculture
· In 1921, 36 firms
accounted for 85% of world grain exports by the end of the 1970’s, six
companies controlled more than 90% and now there are two global
corporations; Cargill and Archer Daniels Midland who control 80% of the
world grain trade[36].
· Four agro-chemical
corporations (Syngenta, Dupont, Monsanto, and Aventis (now Bayer))
control 2/3 of the pesticide market, 1/4 of the seed market and almost
100% of the transgenic seed market.[37]
· Five supermarkets Tesco,
Asda, Sainsbury’s, Safeway and Somerfield control almost 70% of UK food
retailing.[38] Tesco accounts for
almost 27% of all grocery sales in the UK.[39]
|
The supermarkets'
increasing
control of the food system
Over
the
past 40 years food sales have shifted from small independent shops to
huge
supermarket chains. In 1960 small independent
retailers
had a 60% share of the retail market, by 2000, their share was reduced
to 6%[40] and the five largest UK
supermarkets controlled almost 70% of grocery sales.[41] This concentration of
the grocery retailing sector
has produced a situation in which a small number of large supermarket
chains
now have substantial buying power. The supermarkets shop around the
globe
looking for the best price, pitting farmers against each other to
compete to
sell at the lowest price. Farmers are in an extremely weak negotiating
position.
Only multinational corporations and companies with successful brands
have any
leverage with the big retailers.
Supermarkets
ruthlessly exploit this effective monopoly over producers and as the
biggest
buyers of food dictate not only how much they will pay but also how the
produce
will be packaged, stored and delivered.[42] One of the most shocking
aspects of
this power imbalance is that farmers are frequently paid less than the
costs of
production. Supermarkets have farmers over a barrel. They either accept
the
supermarkets prices or they don't trade. Or as Tony Blair chose to put
it
supermarkets have farmers in an “armlock”
[43]
Dedicated
supermarket
supply chains
Supermarkets have
brought their
buying power to bear on producers not only with respect to prices, but
also
through their systematic control of the whole food supply chain; the
use of
direct contracts with selected farmers rather than traditional
competitive
markets and the use of ‘favoured’ slaughterhouses, processing and
packing
companies. Tesco was the first supermarket to bypass live auction
markets, buying
cattle and sheep direct from farmers.[44]
All the big supermarkets now tend to favour buying directly from a
small number
of selected farmers, like beef farmer Marilyn Ivings:
“We are a Marks and Spencer preferred
farm.….It
means
that you get a slight premium, and of course you’ve got a certain
market, you
know, which is very good, because you know if you sell to an abattoir
which
doesn't specialise, then they are dependent on people buying on that
particular
day, and if they've got a lot buyers then the price is up, if they've
only one
or two buyers, then they have a lot of, what you might call, over
production
and the price falls. Whereas sending them to the Marks and Spencer
place then
you know what you're going to get and it's not going to alter.”[45]
Marilyn Ivings, farmer
These
closed contract production systems are now such a large part of the
livestock
and produce industries that the traditional methods of selling farm
produce
through wholesalers and livestock markets have been on the decline for
some
time, a decline which has only been exacerbated by the recent foot and
mouth
crisis. Whilst some farmers like Marilyn Ivings appear to be benefiting
from
these dedicated supermarket supply chains, the majority of farmers have
been
marginalised by the consequent collapse in the wholesale market and a
lack of
alternative markets for their produce.[46]
Selling
through live auction markets was still dominant in the 1960’s and over
800 such
markets were operating in the UK, but by March 2001 there were only 170
livestock markets remaining. [47] A Meat and Livestock
Commission survey in 2002 suggests
that less than 20% of cattle are now sold through cattle markets and
only 35%
of lambs.[48]
“Well,
of those (livestock) markets I used to cover, there's probably only
Thame
that's still going, and Thame's going purely by chance because a group
of
farmers got together and bought it as a co-op. I think if any survive,
they
probably will……Banbury was the largest livestock market in Europe…..it
closed
because the business wasn't there to be done. There weren't the buyers,
and
without the buyers there's no point in having the market. I mean I've
been in
Banbury market when there'd be two thousand fat cattle, ten thousand
sheep, a
couple of thousand pigs and five hundred barren cows”[49]
Clive Hawes, farmer
And
while
many will applaud the closure of livestock markets on the grounds of
cruelty
and their replacement by alternatives such as electronic selling,
[50] there has also been a
concomitant
decline in the number of slaughterhouses which means that animals must
often
travel long distances by truck to be slaughtered. In 1967 there were
over 3,000
slaughterhouses in the UK, but by March 2001 only 520 were still in
operation.
This is partly as a result of increased competition and rising hygiene
standards following Britain's membership of the EU but also because the
large
supermarket’s have switched to direct supply contracts via favoured
slaughterhouses.[51]
Supermarket
exploitation of farmers
Responding
to complaints from farmers and growers that they were being subjected
to
excessive or unreasonable demands from supermarkets the Competition
Commission
examined the relationship between producers and supermarkets. In their
report
the Commission cited more than 50 ways in which supermarkets exploited
their
power over producers.[52] This included 'requests'
for
''over-riders' and retrospective discounts, 'requests' for promotion
expenses,
making changes to contractual arrangements without adequate notice, and
unreasonably transferring risks from the supermarket to the supplier.
Despite
these findings the Commission failed to impose any sanctions on
supermarkets,
but did propose the setting up of a code of conduct between
supermarkets and
their suppliers. However the voluntary code agreed between the Office
of Fair
Trading and the big four supermarkets has, according to farmers and
small processors,
failed to curb the power of the supermarkets.[53]
Localising
the food supply
In
response
to the industrialisation of the food system, the power of the
supermarkets and
falling farm incomes some farmers, like pig farmer Jane Bowler, have
sucessfully cut out the middleman and are selling directly to local
consumers.
Jane and her family raise pigs, butcher the animals and then make
'value added'
products (cuts of meat, pates, sausages and bacon) which they sell in
their
farm shop, at farmers markets and through local butchers. Other
possibilities
for farmer to consumer direct marketing include community supported
agriculture
(consumers pay farmers in advance and receive a share of the produce in
return), pick your own produce and sales to local restaurants and
grocers.
There are also additional benefits to the community and consumers of
localising
the food supply including a reduction in pollution from transporting
food,
fresher produce, more money retained in the local economy and improving
understanding between urban and rural communities.[54]
Reflecting
the trends in UK farming
The
changes
occuring in UK farming are clearly reflected in the experiences of
these five
Oxfordshire farmers. The farm income crisis, the fact that farmers are
not
receiving a fair price for their produce, has impacted on all of them
to
varying degrees. It has led each of them to make significant changes in
order
to earn a living, Charles Peers and Clive Hawes have diversified
outside of
farming; Marilyn Ivings and Jane Bowler have created premium quality
value
added products for specialised markets and David Orpwood is leaving
farming
altogether.
Acknowledgement:
This
briefing was
written for the AgriCultured Project by researcher Kathryn Tulip from
Corporate
Watch in May 2003.
References
[1]
Voices from
Oxfordshire,
Transcript of David Orpwood interview, 2003, section 4.261
[3] Voices from Oxfordshire,
Transcript of Clive Hawes interview, 2003,
section 3.45
[5] Patrick Wintour 'Extent
of farm
crisis revealed', Guardian, 11th April 2001
[7]
Voices from
Oxfordshire,
Transcript of Marilyn Ivings interview, 2003, section 1.586 and section
1.595
[8] National Farmers Union,
UK
Agricultural Review - Farming in Crisis, June 2002
[15] Organisation for
Economic
Cooperation and Development (OECD) ‘Farm Household Incomes in OECD
Countries:
Issues and Policy Responses’ 2003
[17]
Voices from
Oxfordshire,
Transcript of Jane Bowler interview, 2003, section 2.41 and section 2.47
[18] National Farmers Union,
UK
Agricultural Review - Farming in Crisis, June 2002;
[19] National
Farmers Union, Special Report - Farming in Crisis, September 1999
[21] National Farmers Union,
UK
Agricultural Review - Farming in Crisis, June 2002
[23]
Voices from
Oxfordshire,
Transcript of David Orpwood interview, 2003, section 4.7
[24] Mike McCarthy, 'Why
Britain’s
Farmers are Making a Loss on Nearly Everything They Grow', The
Independent, 28th
August 1999
[25] National Farmers Union,
UK
Agricultural Review - Farming in Crisis, June 2002
[27] Personal communication
Michael
Hart, Chair of the Small and Family Farms Alliance
[28] DEFRA, Sustainable Food
and
Farming: working together - the future, Annex B, Sustainable Food and
Farming:
Economic Analysis and Evidence, March 2002
[29] National Farmers Union
of Canada,
The Farm Crisis, EU Subsidies and Agribusiness Market Power, February
2000
[30] Caroline Lucas, Stopping
the Great
Food Swap: Relocalising Europe’s Food Supply, March 2001
[33]
Voices from
Oxfordshire,
Transcript of David Orpwood interview, 2003, section 4.137
[34]
Voices from
Oxfordshire,
Transcript of Charles Peers interview, 2003, section 5.247
[35]
Richard
Douthwaite,
Short
Circuit: Strengthening Local Economies for Security in an Unstable
World, 1996
cited in Jules Pretty The Living Land: Agriculture,
Food and Community Regeneration in the 21st Century, 2000
[36] Vandana Shiva, Mustard
or Soya?
Navdanya 1998
[37]
Hungry
Corporations:
Transnational Biotech Companies Colonize the Food Chain, Helena Paul
and
Ricarda Steinbrecher with Devlin Kuyek and Lucy Michaels, Zed
Books, to be
published August 2003
[40] Institute of Grocery
Distribution,
Grocery Retailing 2001, cited in Caroline Lucas, Michael Hart and Colin
Hines,
'Look to the Local: A Better Agriculture is Possible', December 2002
[41] Taylor Nelson Sofres,
Super Panel
Till Roll Share of Trade, 2000 cited in 'Asda: now number two’, BBC
Newsonline,
21st December 2000
[45]
Voices from
Oxfordshire,
Transcript of Marilyn Ivings interview, 2003, section 1.325
[49]
Voices from
Oxfordshire,
Transcript of Clive Hawes interview, 2003, section 3.149
[52] Competition Commission,
Supermarkets:
A Report on the Supply of Groceries from Multiple Stores in the UK, 2000
[53] Heather Stewart and Jill
Treanor,
‘Supermarkets under fire’ Guardian, 18th February 2003