According to Stephen Tall, putting Iain's name in the heading is one of the ways to ensure people read your posting. So there it is.In his Diary, Iain complains by implication that the supermarkets are using their buying power unfairly to press down on British farmers. There may well be something in that: I think I heard Andrew George (Lib Dem MP for St Ives) arguing just the same case on the radio this morning.
But what really interests me here is the Tories' double standards. For years they have preached the virtues of the free market and told us that subsidies are wicked. Yet as soon as one of the interest groups they represent finds competition uncomfortable, the Tories demand they be given special help. Odd.
Jonathan, it is unlike you to put words into my mouth.
ReplyDeleteThe trouble is, the supermarkets do not operate in a free market. They use their power to blackmail small suppliers. This is not a free market. That is why the Competition Commission is investigating them, and not before time.
I agree with Iain, and I disagree with a number of free marketeers in our own party, on this.
ReplyDeleteSupermarkets have been given too much of a head start in many processes over other businesses, not only how they trade with farmers, but also - and especially - how they have exploited loopholes in the planning regulations to destroy local traders. Tesco are the absolute worst in this, they use their muscle to destroy communities way beyond fair trade and the free market.
And I agree with Iain and Duncan. But NFU and CLA have not served their members well. If a producer of perishable foods takes his produce to a classic wholesale market or to an auction, he has many buyers. If he contracts privately or through an agent with a single repeat buyer, he has only the protection of the contract with that buyer – and I was astounded to hear earlier this year that many of those contracts with the supermarkets are verbal, a practice that should have been vigorously opposed by producer representatives if not by lawyers (in court with a business disagreement, a lawyer told me a long time ago that it’s the words on the paper that count). At the same time the producer cannot escape reality: if there is a glut of produce, or if events reduce retail sales volume in the shops, or if the buyer welches on the contract, the producer still has to share the pain, just as he did in the old wholesale markets or the auctions. Don’t squeal too much if you put all your eggs in one basket and they get broken!
ReplyDeleteInteresting that free trade often needs intervention in many people's eyes.
ReplyDeleteFrom what I see there is no monosopy here, there are several buyers. There is also no coercion, nobody is coming round and forcing people to sell for the price they want to buy for (apart from the government).
We don't have free trade because of subsidy for farmers. This makes farmers less productive and lessens incentive to produce good produce. It also keeps many farmers in business who would otherwise have gone bust and leads to overproduction, which in turn leads to low prices.
So instead of harping on about 'evil supermarkets', lets remove subsidies and have a free market in agriculture. It will be hard for some farmers, but it will be good for the environment and those who survive. Those who don't have a very generous state to fall back on if need be.
"Jonathan, it is unlike you to put words into my mouth."
ReplyDeletePfft! Says the man who makes a regular habit of putting words into mine.