Over the past few decades, the UK’s agri-food supply chain has become centralized and opaque, with just 12 supermarkets controlling around 95% of a retail market worth around £200bn a year. .
This has been correlated with falling farm incomes, where today, on average, UK farmers receive 8% of food expenditure from customers. It is unbearable.
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About the Author
James Woodward is Head of Sustainable Agriculture at Sustain – The Alliance for Better Food and Better Farming.
Here he explains why government and industry need to create new and better routes to market for local food producers.
In addition, supermarkets have historically used unfair trading practices to squeeze producers and pass the costs on to farmers and small suppliers.
This has included adding unexplained charges to invoices, canceling orders at the last minute and using price wars to compete with other supermarkets.
Research shows that this has also created a food system at risk, highly vulnerable to shocks.
In our recent ‘Beyond the Farmgate’ farmer survey, we at Sustain found that English and Welsh farmers are ready for a change.
Most of the 500 we surveyed want to supply less to supermarkets and large-scale manufacturers, and more to a wide range of markets, including food hubs, direct sales, independent retailers and the food service industry.
They want to do this because they see great benefits for their businesses, the environment and their local communities.
These shorter and more localized supply chains would pay a fairer price, reward farmers for doing more for the climate and nature, create better business resilience, connect producers and citizens more closely, and facilitate greater collaboration at the local level between farmers and suppliers.
Farmers who participated in the survey also highlighted several barriers that need to be overcome.
Lack of access to affordable finance, accessible and flexible infrastructure, social networks, and marketing support and advice stifles change.
So there is a will and a desire for a different food future, and national and local governments could do a lot to break down these barriers.
They could support the expansion of these shorter supply chains by identifying local growth opportunities.
They could redirect some of the “race up” and other funds to local food supply chain infrastructure and networks.
They could buy more food for schools and care homes from local farms, and support dynamic food supply to make it easier for small and medium-sized businesses to get into contracts.
It is imperative that we build food systems that are more focused on the needs of farmers and producers, while helping them meet the challenges of the years to come.
These challenges include major and unpredictable climate changes; the urgent need to reverse the loss of nature and the degradation of ecosystems, including soil and water; new trade deals that could undermine UK farming businesses; shortage of workers; a less accessible EU market; and rising input costs.
All of this clearly points to the need to create new and better routes to market for our food producers.
Increasing the market share of shorter supply chains from 3.5% to even 10% of retail will require significant funding and policy changes, including for the necessary infrastructure, but the rewards in worth.
We want to see the long-term ambition to increase market share to 25% over the next 10 years.
As the UK government continues to develop new policies around agriculture, decentralization and leveling across the country, it must seize the opportunity to create a fairer, more resilient and more sustainable food system, from farm to the fork.