Max Sealy (FCG WhiteAvon)

With rapidly rising food prices and talk of inflation being pushed up by the cost of fertiliser and fuel in the supply chain, it will be interesting to see where agriculture fits into the matrix. Traditionally, agriculture has been at the bottom end of the supply chain, taking all the risk, and commodity prices have not reflected the cost of production. This is beginning to change with an increased awareness of environmental factors, carbon accounting and the need for agricultural businesses to pay good wages by the increased cost of national minimum wage. Some of the more responsible members of the supply chain are beginning to recognise this in longer term supply contracts – these are found in poultry, fresh vegetables, fruit, the beef sector and dairy.  There is however a huge variation in this. 

One comment we get a lot is that farms diversifying is good for long term food price security. We would of course have always encouraged our clients to diversity, but would actually argue the opposite – that the more farms diversity into industrial tourism, renewable energy, storage and other services, the less they are reliant on agriculture for their income, and therefore see land more as a management of capital asset rather than a means of food production. Many in the industry (and we wouldn’t always disagree with them) say that it is the farming industry’s job to produce food, but in fact it is the farming industry’s job to produce profit for its stakeholders, i.e. largely the family farm type of client we work with. A good saying is that “farming as a business is a good way of life, farming as a way of life is not a good business”. We should begin to kick back on the fact that multi-generational farming businesses will always carry on doing what they do because they value their way of life, because this is increasingly not the case. One of the big things that has come out of the recent succession discussions on farms, is that the next generation will need to see a proper reward for their time and labour and will not work “all the hours that god sends” for little return.

Those of us who are lucky enough to work in this industry and live in the rural economy must also of course remember that there are lots of benefits. We live in lovely places, with low crime rates, we know our neighbours, have good communities around us and we often have long established links with the places that we live in. We have a unique opportunity to encourage young people to come into the industry and develop, and where those people have initiative and interest, we should always foster that. This however cannot all be taken for granted by those who process and add value to our food. They need to innovate to ensure that hard working families in this country can afford food at all price points and that that food is nutritious and well-made, and above all, safe and secure. 

If you would like to discuss the points in this article further, please contact Max Sealy at maxsealy@fcgagric.com or your local FCG Office.