Graig Producers said it was forced to suspend trading after Vion wrote to its farmers to change their terms and informt them that, in future, they would be paid directly by Vion rather than through the cooperative. Graig said that this move, along with the additional information that Vion is demanding from farmers, has raised fears that Vion is bypassing the marketing group and, in future, may select only larger farms as suppliers, which would leave many smaller family farms struggling.
The independent livestock marketing group, which is based in Dolau, Powys, supplies organic beef and lamb to the supermarkets via their designated abattoirs. The group has more than 300 members, ranging from small family farms to large estates, for whom it secures economies of scale through collaboration, helping to optimise income, minimise costs, and improve management.
Graig said that a poll of its members revealed that 98% did not want to be paid directly by the abattoir.
Bob Kennard, managing director of Graig Producers, said that the action threatened to “rip the heart out” of its relationship with its members and risk the collapse of family farms, which would have a devastating impact on the wider rural community.
He said: “Vion are now demanding that farmers sign a new form of individual contract with them before they will be paid for their livestock. We believe this reflects their increasing control of the supply chain. We are concerned that this may ultimately result in the amalgamation of family farms. But we have shown that economies can be achieved through farmer collaboration, rather than amalgamation.
“We have very few options for marketing our members’ organic livestock, and this action restricts us further,” he said.
However, Vion has denied the claims that it is bypassing farmers’ marketing groups, and that the change is being implemented to improve efficiency and transparency.
A statement from the company said: “Vion continues to maintain a positive, constructive commercial relationship with other farmer marketing groups, which continue to be recompensed for the valued services that they provide. We believe that [direct payment] is more efficient for farm administration, and a clear response to calls for greater supply chain transparency.
“Vion operates within a highly competitive marketplace. It deals directly with thousands of small producers throughout the UK and recognises their importance to promoting a strong, sustainable agricultural supply chain.”
However, Kennard told Meat Trades Journal that he was hoping to persuade Vion to change its mind, although there had been no communication from the processor, which he described as “disappointing”.
He said: “All we are after is a sensible business relationship in order to get as much organic red meat into the market as possible. We need to open up the supply chain, act collaboratively and act to increase sales of organic red meat.”
He said that the solution would be to implement recommendations made by Lord Curry as the chairman of a government commission on the Future of Farming and Food(the Curry Commission, 2002).