Melanie Reid
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Most mornings, on the way to work, I stop and chat to a herd of dairy calves. Not that long separated from their mothers, they are skittish and curious, rushing to the fence to exhale sweet, grassy breath over me.
In the past week or so, I’ve taken to telling them how lucky they are. “The world belongs to you girls,” I say. “You may not know it, but you’ve suddenly become one of the most precious commodities on the planet. Not long ago you might have been looking at dog food; now you’re facing a long productive life and lots of children.” Here I lean close, and they sway and blink. “And you know what, girls? We humans were too greedy and far, far too shortsighted to see it coming.”
Should anyone ever want a perfect example of what short-termism has done to the world, they just need to go and look at a dairy cow. If they can find one. The domestic British milk industry is in tatters, systematically dismantled over recent years by a retail food industry that has pushed farmers to the edge by paying them less and less for their product.
The mantra is familiar to us all. Give the customers what they want. Give the shareholders what they want. And hell mend the future if anyone even considers it, given they don’t teach anything over the immediate horizon at most business schools. So vicious has been the squeeze that as many as a third of family dairy farmers have now quit, dispersed their herds and sold their farms. Spirits have been broken, generations of family history binned. Those who struggle on with their 14-hour days and their 4am starts do so on incomes from milk of as little as £5,000 well below the poverty threshold and just a fraction of the average wage.
And, while this process has been going on, did anyone care? Did its longer-term economic significance register? No, of course not, because we, the public, take a limitless supply of milk totally and utterly for granted; and indeed there is probably a significant proportion of the modern population that believes it is sourced from a tap somewhere.
Then, out of the blue, panic. There isn’t enough milk on the world market to go round. The Chinese palate, which traditionally regarded the drinking of cow’s milk rather as we would regard drinking glasses of cow’s saliva, has become Westernised and has developed a taste for yoghurt, cheese and milk. The Chinese now want to start feeding half a pint of reconstituted powdered milk a day to their children (of which there are many). Correspondingly, demand for butter, cheese and powdered milk has risen 40 per cent there in the past nine months. Worldwide, demand for dairy commodities has increased by 3 per cent per year, outstripping the 1 per cent increase in supply.
The delicate balance of supply and demand has been blown. At the end of last week the distribution company First Milk, which is owned by 2,800 British dairy farmers and handles two billion litres of milk a year, indicated that it will not be able to fulfil its contractual obligations to some of its leading customers, as production is more than 5 per cent below forecasts.
Suddenly the retailers realise they need to cherish their milk suppliers. Rapidly, the price paid to British farmers has gone up as much as 37 per cent, from 17p a litre to 25p a litre and is still climbing. Commercial heifers, like my friends in the field, are just in a matter of weeks fetching more than £1,000 a head prices that haven’t been seen for years. Some British farmers, empowered, are considering sending their milk to China in powdered form instead of selling to the home market.
If a Martian had landed, we might struggle to explain why we let this situation develop. Why did no one see this coming? We spend billions keeping Trident as a domestic insurance policy against global war, but we do nothing to protect a primary food source against the risk of global shortage. When that shortage comes, we will be defenceless. The farms are gone, sold largely to the monied classes as places to play at being squire. In 1995, the UK was 87 per cent self-sufficient in products that could be grown here. Now the figure is heading fast towards 60 per cent.
You cannot restore the dairy industry overnight by turning on a tap. Once lost, it will take years to rebuild, for the herds will have to be bred, and skills passed down for generations will have to be relearnt. You can see it now: the huge start-up grants; the government incentive schemes to attract apprentice dairy workers. Module One: Which end of a cow is which. Module Two: Why Health & Safety says it’s dangerous to approach cows. Module Three. What that white stuff is.
Similar problems loom with meat. Many beef, pork and chicken producers are said by the NFU to be in meltdown as a supermarket price war coincides with a doubling in the price of feed, caused by flooding and the increasing demand for grain for the biofuel industry. I am by no means an apologist for farmers, for so long their own worst enemy, but I do know that in some cases we are reaching the tipping point for breeding stock: Scotland’s breeding flock of sheep, to give but one example, has reduced by more than 700,000, or 20 per cent, in the past seven years. And this at a time when economists say that, after years of food deflation, we face the opposite effect because of changing global patterns of demand as China, India and other developing nations compete for food supplies. All this, and we’re worried about Iran?
Similarly, we continue, for the moment, not to question the unsustainability of New Zealand lamb, or Argentine beef, or the Scottish prawns flown to Thailand to be shelled and then back again. At what point do we wake up to the fact that, when this craziness stops, we may have no indigenous farming industry left to feed the nation?
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At last the penny has dropped !
For years Farmers have been leaving the Dairy Industry in droves due to financial pressure among other things. We have been told endlessly by governments about the cost of storage of grain and butter mountains and how they had got to be reduced. Well done!! now we are all facing shortage of supply of basic foodstuffs due to the lack of forsight of european authorities and greed of the supermarkets. I am glad i have survived long enough to benefit from what can only be more prosperous times for agriculture but unfortunately it wil be at the cost of the consumer in incresed retail prices.
I wonder if the retailers will swallow some of the increases out of their margins? I think not !!!
C.Clowes, derdyshire, england
We have waited for years for someone to comment as forcibly and sensibly as you have done. We have been bleating about our milk price being down from 26ppl in 1996 to 17ppl(and even less sometimes) whilst the housewife paid 42ppl in 1996 and is paying 55-60ppl now (and even more in some places) but nobody listened. At the same time supermarket margins have moved from 8% to 38% and the processors have pocketed any increases they could lay their hands on. .
Iori Rowlands, Beaumaris , Wales
As a dairy farmer I agree with many of the comments that it is time for the dairy farmer to get a decent return on his/her investment ( financial or otherwise ). I do not agree that dairy farming has never been subsidised! Quotas and export refunds are subsidies whether you like it or not so get of your high horses and start producing at a profit.
ian, biggar, scotland
I do not agree with Mr Wilms of NZ. In the UK we have a phenomenon known as "animal welfare"i.e. We do not routinely induce cows to abort (sorry! give birth) so that management is easier and more cows can be "worked" by less humans! The systems in NZ and UK are totally different!
ian, biggar, scotland
The market in milk is not a "free market" in the UK, the government has been interfering for years. It broke up the Milk Marketing Board years ago, and then tied the hands of the co-operatives which emerged. Dairy farmers did not get subsidies then, and we don't get subsidies now. The government give us money, like the rest of the EU farming community, to keep the land in "good environmental condition". There are an awful lot of conditions to meet in order to be given this payment. Don't forget too that 20% of the UK workforce work in the public sector, and that there are more people watching farmers than there are farmers.
Thinking about the UK and NZ, you cannot compare the two countries - the UK works within the EU. English farmers would like to work on a level playing field with the rest of the UK, but the government impose more stringent restrictions and take more money off their payments than their Scottish/Welsh counterparts. Hardly fair but typical of this government.
Jade, Cumbria,
I have read the article and comments with in great interest. Many of your respondents seem to have missed the point - at no point (and quite correctly) is it suggested that the solution is to introduce subsidies! The problem has been created by the short-sighted retailers (supermarkets) who have driven down the price supposedly to the benefit of the consumer but at the same time they have significantly increased their profit margins at the expense of the producer. It is the consumer that will pay the cost in the long term while an industry that was previously strong has been decimated!
Peter, Llandovery, Wales
Many of the people that commented clearly fail to understand that dairy farmers have never been subsidised, beef and sheep yes but not dairy farming. It is also not an industry that can be turned round overnight, many who understand the business liken it to a super tanker at sea which can't turn on a six pence. It has taken a severe beating over recent years and may never recover. As far as supply and demand is concerned as a dairy farmer I as many like me fully understand how it works, as my milk buyer has repeatedly told me over the past few years. Well now the table has turned as dairy farmers are leaving the industry at an alarming rate the supply is decreasing and I for one will never sell my milk at a loss again. I hope the milk buyers and retailers pay the price for their short sightedness. As for the new zealand comments, the UK is not like new zealand.
Jon Sunter, Leyburn, N. Yorks
as a tired dairy farmer who has worked 70 hours per week for the last 25 years at last our time has come to make a proper return for our efforts.........
j rowland, hexham uk,
There are not too many dairy farmers, and the supermarkets are to blame. It is the supermarkets who have greatly increased their margins on milk in the last ten years while teh producers share of profits evaporated.
Note that demand remained robust and that milk and dairy products are major earners for the supermarkets . As much as 167 million of the 2,000 billion Tesco profit was thought to be from milk.
At the same time there was insufficient margin left on farms to reinvest. The Norwegian should realise that it costs about 5p a liter to import liquid milk from Poland and since their prices have risen to our levels it is totally uneconomic.
The UK dairy producer was also beaten down by the costs and prices ruling in NZ - again irrelevant to liquid milk required on a level output every day in the UK. See how much milk they can get from NZ to help ? zilch!
gavin park, ayrshire,
there are no subsidies on milk, and there never has been any.Subsidies used to allow farmers to supply food at below the cost of production. post production subsidies, food prices ought to have gone up.Instead, retailers are using farmers environmental subsidies as an excuse to keep prices down,so in reality farmers are subsidising cheap food .
Geoff, Carlisle,
I have always believed that it was the intention of the E.U. in cooperation with our government to ruin our farming and agriculture industries. After all, if we are dependent on other countries to feed us then we can't fight them can we?
We are after all heading for a one world government and for that to be achieved there is no room for nationalism or independence. Hence the open door for all who want to come here. Also the selling off of all our important commodities like water to foreign companies.
I used to wonder 45 years ago, how on earth it could happen that we would not be able to buy or sell anything unless we had a number in our right hand or forhead. Now I wonder no more, I can see that we are nearly there.
The Bible had it right all the time! Increasingly, to the return of Jesus Christ, we can expect wars, floods, earthquakes, famines, pestilences and mens hearts failing them for fear of what is coming on the earth. It is time to seek the Lord Jesus until you find Him.
Ann, Waterlooville, England
Why do we need grants, training and so on if the price is going up? The pricing mechanism manages to get the supply of things as diverse as computers, broadband, accountants and hardressers 'right' (not perfect - but righter than most state-directed provision). I can see that there's some skill and some investment needed for dairy farming but is it so different?
I suspect that the supply/demand balance that you describe as 'delicate' is actually pretty robust and will take this in its stride.
Eric Arthur, London, UK
Here, Here to Theo Wilms. As a NZer who has lived in London for 10 years, I am always appalled at the vitriol poured on our farming industry.
Would someone explain how a country with no farming subsidies and productive land for farming is engaged in activity that is unstainsabile. NZ has a land mass slightly bigget than the UK and four million people that sends it's frozen meat by container to the UK and has already been highlighted provides no subsideies to its farmers. Has not suffered, BSE and Foot and Mouth and yet is able to compete competiviley in farming, unstainable is not a word I would choose.
SJPearce, London, England
"British dairy farmers , indeed British industry period, need to be competitive with the rest of Europe, else they will be unable to sell to that market."
Gerard Mckay, Kassel, germany
Correct, Except you conveniently glossed over the effect of the CAP. Now you have been made aware then one presumes you support British calls to bring about it's end?
Thought not
Ben Moss, London,
Australia supplies 10% global milk supply and has drought. British politicians brilliantly negotiated a milk quota for the UK below market demand ensuring imports a ready market.
Politicians insisted on turning food (animal feed and human comestibles) into oil substitutes linking crops to oil prices as biofuels.
The Government wanted dairy farms for building sites for developers funding their party machines.
Supermarkets are greedy amoral local monopolists destroying any supplier or competitor.
That is the world as we live it today.
TomTom, Leeds, England
Since Thatcher this country has based its wealth on "service industries". Even our energy, transport and some water companies are controlled abroad. Now our core food production is further threatened. As a viable entity this country does not exsist independantly.
If things get tough through global warming or other planetary disaster I am sure we dont have to worry, our friends abroad will look after us !!
mike gee, bournemouth, uk
I design silicon chips for a living. The price the kind I design has fallen from $15 to $2 in seven years. The price of the equipment they go in has fallen from £100 to £10 in the same time. You can't build a chip factory any quicker than set up a dairy herd. Do you, Melanie Reid, ever consider my job when you buy electronics? My bottom you do. And I 'm glad you don't, because that is why I am richer than my friends who farm, who suffer from the feather-bedding they get from the tax-payer and food-sentimentalists like you.
Matthew, Ringwood, UK
Waht's new? Who spoke for the farming community and food security in this country and kept on speaking, uncowed (forgive the pun)? Only people everyone else branded as zealots. Its the same with just about everything in the UK, education, technology, even housing. On which last point, take a calm look at the mases of new builds, particualrly flats, many of which look sure to be the noisy, ugly slum wonders of the next years. What is the phrase that springs to mind,something along the lines of 'for short term,often illusory, gain'.
helen, Norwich,
Perhaps you misunderstand supply and demand.
when supply exceeds demand, prices fall, as prices fall, supply falls.
If supply falls beneath demand, prices rise, and supply will rise until it matches demand.
The simple problem was, there were too many dairy farmers for the milk demand.
I know, its much more fun to blame Tesco, but tesco can only say cut your prices or we'll go elsewhere if there is an else where to go to.
Dominic, Manchester, UK
New Zealanders attempting to preach from on high is ridiculous. Their experience is far different geographically and economically than the UK's.
The writer of the article is absolutely correct, and should be listened to. An unfettered "free" market might appear attractive to some, but so were similar rationales from the past that rationalized slavery and other all too human wrongs. I would like to remind the commenter from Germany to perhaps consider the extremist views that came about from his own nation during the middle of the last century before wagging his finger. The costs of food in Germany have raised dramatically, with regressive rationales and excuses abounding.
Mary, Warwick, RI US
Its the same story where I live in Ireland,irreplaceable skills learnt from previous generations are being lost.
The age profile of farmers is rising and profitablity is decreasing, all signs of decline.
Yet the EU and their Irish enforcers insist that Irish beef is traceable from farm to plate and not vaccinated for Foot & Mouth while the sale of untraceable and vaccinated Brazilian beef is allowed into the EU.(thanks to your Mr Mandelson!!!)
The comment about "apprentice farmer courses" is nearer to the reality than you think, such courses are going on here for organic farming for some time!!
Irish (and UK) Farmers produce food in spite of government and when food gets scarce it will be futile to look for supplies from Ireland because we will be in the same dilemma.
Gerard, Ireland,
People, farmers, have no choice. Some may work long hours, cut corners, wear out, emigrate. To flow the same products back and forward is a sign of an economy that produces waste, stupidity, land degradation and climate change. Diversity is moribund. A local economy for 'locals' is by far a better proposition than a bubble economy. And lest we forget. Land is knowledge. My particular interest is that food, soil and water, and energy are the essentials of life, and yet these essentials are not part of our education. In fact, this knowledge is denied to us. We are paying a scary price for this. I believe that this economy is more than an 'innocent' fraud.
mario molinari, maidstone, uk
yes its free market economy..but should we not support food producers ? It doesnt compare to textiles - you cant eat cloth. We should be able to produce sufficient food to meet our own requirements - especially now we are more aware of the environmental costs of importing foods.
Supermarkets disclaim responsibility saying they only give us what we want, but what they offer at the prices they dicatate, is realistically all we can buy. Thety have taken increasing shares of profits from milk . They have also created this sense that food should be cheap and now we expect it to be...its time for them to take responibility and teach us a different lesson, that good food , produced responsibly must deliver a decent living to anyone involved in its production..not just the supermarkets own shareholders, who have been the beneficiaries for so long. The farmers deserve this break, its long overdue !
Sarah, Yorkshire, uk
Another plea for attention and subsidy.Farmers are in business and are featherbeded to a remarkable degree-if they cannot make it pay,then tough.Industy in this country has dissapeared throwing thousands if not millons out of work and is not coming back while the land is going nowhere.We will use it when we need it.
The application of a plow and the herding of dairy cows does not require an indigeonous farming industry no more than my back garden requires one for me to grow runner beans.
Robert Everitt, wolverhampton,
Its called a free market economy. Supply and demand. As a resource gets scarce, demand increases and prices increase in response to a limited supply. That is not difficult to understand. British dairy farmers , indeed British industry period, need to be competitive with the rest of Europe, else they will be unable to sell to that market.
Gerard Mckay, Kassel, germany
You are so right,we have had a government which has rose tinted glasses on.On every front they seem to have an idea that everything will be all right.For example the forces will fight more wars with less troops and less equipment.On Power and Energy,we can get our gas supplys from Russia without any problems(ask the Baltic states,Ukraine etc if that is right),On immigration we can have open borders and it will be ok.
We can survive without a manufacturering industry but with service companies(just wait until China and India catch up on that one).
Agriculture is another case in point,but this has been going on for years.We have had Urban politicians who have no idea about the countryside running it.I think the last Agriculture Minister stated in his interests "county walks"--just about sums it up.We need a complete overhall of the Civil Service with a new direction.
Nigel Wheatcroft, Wimbledon, uk
The meat and dairy indusry consumes more energy and reources than is sustainable. If we are to have any hope of combating global warming we need to wean ourselves off meat and dairy.
The meat and dairy industries exist to pay farmers. The consumer, the environment and its impact on global warming come a distant second.
Billy Waters, Ashbourne, Meath
What is the problem then? As the price on milk rises, more milk will eventualy be produced. While you wait for your british milk suppliers to meet the demand, you import.
Not a crisis, but the Marketplace at work.
Eigil Jansen, Stavanger, Norway
You could substitue textiles (or any other manufacturing industry for that matter) for farming. In this country, most people, whilst professing to care about a range of subjects as diverse as factory farming and third world sweat shops (just realized, they're actually not that diverse after all), contine to buy the cheapest products they can. Understand one thing; no body cares.
Phil Barnes, Preston,
Sir, - The article makes an interesting read and would serve as an eyeopener to policy makers in predominantly agrarian economies. While rural dynamisation is welcome, it should not be at the cost undercutting the very rural economy, which serves as a bedrock for sustaining growth and development of economies. In a primarily agricultural economy like India, with the farmsector contributing more than 50 pc of the annual GDP, modern farming practices did help in stepping up food, dairy and livestock production through Green Revolution (Courtesy Dr Norman Borlaug ) and White Revolution (Milk revolution). From rural mandis we moved on to Farm Fresh outlets in towns and cities. But then the lot of traditional food givers , relegated to the background due to market dynamics, continue to be what they were. Pockets of farm success and affluence are few and wide apart. But then the caravan moves on.
Thanking you.
Pisipati Sriram, Hyderabad, Sndhra Pradesh, India
We've had, and are still having, years of New Labour who are an urban based party that cares little or nothing for rural affairs.
This is but one result.
Stan(expat), USA,
I have to say it....sorry.
But, you reap what you sow!!!!!!
joshua, London/Buckeye, UK/Arizona
In New Zealand, the dairy industry has thrived because there was never the subsidies given to keep farms viable. As costs went up and returns declined, farms amalgamated and new technology was developed. Now farmers have, on average 300-400 cows and they milk them on carousels. The cows walk on and one man puts on the cups and when they are milked out, an automatic sensor detects this and the cups are removed. The cow then walks out of the shed. If Britain had not subsidised its farmers, land prices would have fallen, farm size would have increased and there would be herd sizes and technology comparable to that seen in New Zealand today.
Theo Wilms, New Plymouth, NZ,