Farmgate pricing inquiry welcomed by sheep industry

An inquiry conducted by the Environment, Food and Rural Affairs (EFRA) committee into the volatility of sheep farmgate prices has been welcomed by the National Sheep Association (NSA).

After years of uncertainty within the market, a government-level investigation into the price paid for farm produce was set up. EFRA conducted the research during the autumn and winter periods, with a report and recommendations released yesterday (Wednesday 2 March).

“The inquiry clearly shows that the structure of the farming and food sector does not generally support adequate farmgate prices, despite the fundamental role agriculture plays in the UK economy,” commented Phil Stocker, NSA chief executive.

“The report outlines some valuable recommendations that could work to address this, including several based on evidence the NSA gave during the inquiry. These include further development of export opportunities, as well as displacing imports through greater domestic trade, setting up producer organisations and establishing future markets for red meat, as well as dairy produce. NSA is also pleased that improved identification and labelling of British products has been listed as a key recommendation.”

Stocker said the rationale of direct payments under the Common Agricultural Policy (CAP) in supporting farming and rural incomes should also be recognised: “The CAP should be recognised as highly beneficial to the country as a whole and this should be remembered, irrespective of the outcome of the forthcoming EU referendum.”

He highlighted his concerns that an exit from the EU could result in cuts in financial support. “In the event of a Brexit, this financial support may be at risk and I am concerned it could be phased out.

“Producers rely on CAP payments to hedge income and, as the report has shown, farmgate prices often aren’t high enough to support a sustainable business. Whether we opt in or out of Europe, any attempt to change the support system should be avoided.”

According to the NPA, a year of particularly low farmgate prices, alongside delivery challenges with the new Basic Payment Scheme, has left several farmers in financial difficulty.

“With farmgate prices being so low, the importance of getting payments out to farmers on time is essential to aid cash flow,” said Stocker. “Some farmers still haven’t received payment and this year’s fiasco must not be allowed to happen again.”

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