Farm diary - December 2 2009

Splashing around the fields looking at sheep grazing underwater, there are still a few things to brighten one's day as another soaking approaches.

Mushrooms are growing strongly (surprisingly late), inviting to be picked, and various red berries, rosehip, hawthorn, nightshade and the spindle-berry, by far the prettiest, give colour to the hedgerows.

Most of the trees have now been stripped of their leaves, and it's all looking rather wintery.

We are still pumping dirty water into our lagoons at an alarming rate as it cascades down the sparklingly clean concrete yards. The cows look rather snug in their beds, looking out at the appalling weather with little interest.

l Markets are wonderful things, but they are not perfect as we know.

They need a bit of help in order to protect players from the worst excesses, and it seems that no one is safe if we allow the law of the market a free hand, because it turns quickly into the law of the jungle.

Astonishingly, retailers are now privately complaining that price promotions are killing margins; claiming that consumers are becoming 'promotional junkies'!

As leading brands are forced to spend more and more 'shelf time' discounted this year, a way must be found (retailers say) to give customers value whilst recovering from this deflationary position.

Well I really do think that they have got a nerve, I really do. Who has started this price war in the high street?

Who has forced suppliers to carry the brunt of these promotional activities?

Who has been selling 'buy one '“ get one free'?

I could go on, but this beast has taken on a life of its own, and no one has the courage to act alone, for fear of losing business.

The driver behind all this is that retailers have realized that next year will be the recession year for them, as consumers have changed their spending habits, looking for offers, not spending in the free way that they used to, and are not returning to the 'pre-recession' days of living.

All this is very serious in the dairy category.

Take butter; you do not buy more butter because it is on offer, but you are very pleased to get it cheaper.

I could say the same for milk and cheese, yet the promotional activity is massive, with leading brands seemingly on offer day in day out.

The effect is to strip value, leading to wafer thin margins with little incentive to invest and develop new ideas, and of course much lower farm gate prices.

The consumer will ultimately lose out as choice becomes limited, and larger quantities of cheap commodity products are imported, but I do not expect you to have any sympathy with the supermarkets over their dilemma; they caused this problem and if it affected their business and only their business it would serve them right.

But it doesn't. It destroys innovation, branding, new ideas and all the things that we need to see in a thriving exiting sector such as dairy.

It starves British suppliers of cash to invest, to improve efficiency, to grow and become a competitive force in Europe. This intense competition between dominating players in the market is destructive and serves no-one.

It is a mad scramble to gain market share, but as they are all doing the same thing, it doesn't work. But it is increasing waste, it is working against suppliers, and it is putting farmers out of business.

It leaves retailers with inadequate returns at the end of the financial year, and they address this by charging suppliers (in some cases) millions of pounds to continue the trading 'relationship'.

The abuse is widespread and an absolute disgrace and any government worth its salt would do something about it.

The Office of Fair Trading has called for an O

mbudsman, which in itself is remarkable, because the OFT is concerned with customers only.

The farming lobby has of course, as the weakest players in the chain, echoed that call.

The retailers themselves would benefit, as they now need rescuing from their own actions!

Yet they have lobbied hard, and frightened politicians with tales of food price increases should an Ombudsman be put in place.

I read that they have already been to see Peter Mandelson and his staff 13 times to argue their case and lobby against any form of curb on their worst excesses.

There seems to be a general agreement in government that something should be done, but of course there is an election approaching, and the Conservatives have declared that they would not put an Ombudsman in place, but Nick Herbert (Shadow Secretary of state) claims the retailers know that the writing is on the wall.

Many people believe that retailers are beyond the reach of politicians, too powerful to be tackled in any way.

Well, we will find out very soon. If politicians fail to act, they will most certainly be held to account in due course, and will find themselves in a very difficult position as the madness continues.

A huge row broke out last week over an article in 'The Lancet'. As some of us call for a moderate and sensible debate over climate change, the Health Secretary Andy Burnham congratulated the article which suggested killing 30 per cent of all British cows and sheep in order to save the planet.

It was seen by the Health Secretary as an answer to both climate change (less methane) and health (less meat to eat).

Defra was caught completely unaware by this, as no one had bothered to consult the department responsible for sheep, cows and other things agricultural!

I can imagine scenes from the BBC's 'The Thick of it' as Defra officials and Ministers scrambled to point out to the Department of Health (who had part-funded this independent research looking at how health professionals could help combat the effects of climate change) that this idea might have a few flaws.

The NFU President Peter Kendall raged at the 'ill-informed and simplistic report', condemning Ministers for their poor judgment.

Leaving aside how exactly the government would go about killing 30 per cent of all farm animals, did they really think that it would mean less meat consumption and a meaningful difference to climate?

Surely they have heard of food imports from other countries where there is less concern and less control?