An industry chair in Northern Ireland has stated that food prices in the country simply must go up.
Tony O’Neill, who is chair of the Agri-Food Strategy Board, is of the opinion that consumers are not paying enough for the food that they purchase.
Low Prices in Supermarkets
O’Neill is of the belief that the supermarkets are using the supply chain to their advantage in a way that harms the food industry as a whole.
The European subsidies for farmers are intended to allow them to produce food cheaply, giving them a better livelihood and allowing farmers to thrive.
But, with low prices in supermarkets, O’Neill claims instead that the profit is being eaten up by retailers – leaving farmers in much the same position as previously.
"There's no doubt that the supermarkets are now realising that they've gone too far, but they have to find a way back and I don't think they know the way back," he told the assembly's agriculture and environment committee.
In order to keep the industry viable, he says that supermarkets with healthy profits will have to start sharing those profits with farmers. If they do not, it could be that the industry will fail even with European subsidies in place.
It’s also worth remembering that these subsidies may be removed in the next few years following the Brexit, which would force prices to rise dramatically at that time or see the industry crash. Labour policy promises seem to suggest that the subsidies would be upheld if they were to return to governmental power; however, this is by no means a guarantee, and subsidies may not be as strong even if this were the case.
O’Neill also talked about there being “two agendas” in farming. There were those who wanted to see competitive production, with good profits and fast growth; and there were also those who wanted to see farming have strong environmental outcomes, supporting the industry for many years into the future with healthy landscapes and breeding policies.
During the meeting, the committee also heard that in order to produce food competitively in the global marketplace, Northern Ireland is in need of up to 6,000 farmers who can produce high volumes.
In addition to this, O’Neill says that 20,000 farmers are needed to look after the countryside.
When thinking about food industry jobs, farming is not necessarily one that comes to mind – it’s more likely that production and factory jobs are thought of first. However, farming is a very important part of the industry, and without strong farms in place, the whole supply chain can be likely to collapse.
This is more important than ever at the moment, as studies show that consumers are increasingly looking to the country of origin before they purchase fresh goods such as vegetables and meat. They wish to buy as local as possible, and so increasing the amount of food produced in the UK could be a very important move for the economy and for helping the consumer to purchase the products that they prefer.
If the current situation does not change, it could be very difficult to increase that production level. For new farms to begin, and existing farms to expand, there needs to be enough profit available in the industry to encourage investment.
If the supermarkets do not share some of their profits with the farmers, this simply will not be the case.
So where can they find this extra money to part with, if not by cutting into their own profits? The only option, it seems, is to increase the cost to consumers.