h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

There's a lot of talk about campaigning for farmers to get a decent price for their milk, rather than them having to sell it for less than the cost of production. What is going on here? Excuse my ignorance, but why are they in a business which is not cost effective, and why should we support them, and not other people who do things which lose money?

This is a genuine inquiry, I really don't know the reasons; maybe something to do with security of food supply? I'm just guessing.

A problem it is, quotes.
Yes, of course, security of food supply is a factor. A problem would arise if a significant proportion of suppliers went out of business but before that, the question is "Is the low price due to oversupply?"


Questions to ask a farmer / dairyman (or farmess\dairywoman):

. How long have you had your farm?
. How long ago was it that you started making a loss on your milk?
. If you stopped production (or stopped selling it) what would your expenditure be to feed your herd?
. Compared to that, what is your out-of-pocket expenditure now?
. What is your herd worth, currently, on the open market (and what would your losses be)?
. What is your farm worth:
- a) with the herd?
- b) without it?
. What was your tax contribution before this happened? For how long?
. Are you in receipt of public support? If not, might you be?

It is more complex than some might let on...

Here's a summary (plus a link to a more detailed pdf file of the full) report from DEFRA from 2010.

http://www.defra.gov.uk/statistics/foodfarm/farmmanage/fbs/publications/milkanalysis/


Basically as far as I can see from that - they're not selling at a loss mostly but it does depend on who they're selling to.


I do know however, that a close colleague of mine comes from a farm in Haverfordwest and her parents are currently getting out of dairy farming and selling their herd...

One thing is for sure though - the low price is not due to oversupply. The low price is due to pressure from supermarkets who supply low cost milk as a loss-leader to pretend that they're cheap (chink chink).

If they sell milk at £1 for 2 litres then they can then seem to get away with selling 2 water inflated chicken breast for £8

So the major supermarkets *do* supply milk at a loss I think and this in turn puts downward pressure on the suppliers.
It's not (quite) to the point of bankruptcy for everyone though - at least not yet.

Not familiar with the situation there
but this reminds me of what happened
in Jamaica a few years ago. Under IMF
restrictions Jamaican dairy farmers were
obliged to dump their product and literally
pour their milk production onto their fields
because they could not compete with imported
powdered milk from the USA.

There is no longer any diary or beef infrastructure
in Jamaica. Restrictions based on 'quality control'
measures were established on the argument that proper
refrigeration was an 'unreliable' factor in that tropical
climate. Powdered milk does not require refrigeration.

In fact these regulations were put in place to allow
American powdered milk surpluses to be imported.

Ironically these quality controls were first instituted
because McDonalds insisted it must be able to provide
'consistent standards' in its burger products and claimed
this could only be achieved by allowing then to import
their own surplus 'frozen' beef.

Unable to argue with IMF demands because of servicing
their ongoing national debt to the Whirled Bank, the
Government of Jamaica had to establish bogus quality
control standards that dismantled local infrastructures.


~jwf~

I wrote at some length earlier- and lost it because I had taken too long. .

So one quick point, the farmers are being paid less for the raw milk which contains not just the milk that we consume but all of the ingredients that go into dairy products, many of them made with what is taken away from the milk that we buy and consume.. A government minister made this point because we actually import significant amounts of dairy produce.

But in part the whole problem of agriculture can be related to the "flight from the city" phenomenum associated with the middle class revolution. Commercial farming used to benefit from proximity to cities for which the rural society provided a hinterland, and a special relationship with the town/city dwellers that allowed them to tailor their production to fit the market quite exactly. In France there is still something of this feeling about the produce of one's own piece of regional land: But globalisation reduced the produce of the Land to mere standard food, raw materials and commodities that in theory can be produced anywhere on the planet. Only more recently have consumers become aware that sometimes they would prefer to really know what conditions the food is being produced in and just what is being put into the food we eat.

The present crisis is a reminder of an age-old truism, you can only trust people with whom you have a relationship based upon mutual trust.

Cass

I decided to re-write and complete that post, and have put it as a guide entry in order not to clog up the thread.

British Farming http://www.h2g2.com/entry/A87765574

Cass

For those who cannot get the above link to work: A87765574

lil x

Thanks Lil- I always seem to forget that.. But it seems to work for me when I check.

By the way- I think I saw that you are having to cope with the vagaries of the Housing Market etc.. Hope it is going well and not too traumatic.. One of life's major upheavals. Our daughter is currently in the throes.

Cass

It's one of those silly gremlins that seem to jump in between Ripley and Pliny, Cass.

Yes, that's me! Thank you for your good wishes. We have the young gentleman and his father coming round this afternoon.




Normal service is now resumed

lil x

a) There is no such thing as a free market.
b) Monopolies and cartels.
c) Global inequalities of pay and standards,

Hi Lil
I hope it goes well!

Further to my previous I was thinking of a holiday we had one Easter in Pembrokeshire perhaps 20 years ago when the landlords of the cottage we rented turned out to be a couple who had lived in the Home Counties, but who had chosen to opt out of the "rat race" cashing in their assets for a life-style that would be more satisfying and that allowed one of them the opportunity to really take up Eventing seriously.

It was that post-Cold War period when Capitalism found a new lease of life with the "Big Bang" and globalisation, and many institutions opted for increased productivity by "down-sizing"= getting the same production levels from staff reduction.

But this meant a clear-cut division between (a) those who were really ambitious to achieve wealth and what wealth could bring, and (b) those who felt that wealth was not everything and in fact quality of life was much more important. [Some of the latter emigrated to try smallholding and other forms of agriculture in Europe]

But- in addition to the market distortion of the agricultural economy by UK, EU and GATT interventions- there were/are all the distortions involved in Britain's "Welfare State" and the growing importance of the "Social Contract" in Europe.

One of the factors that made "downsizing" possible/practical is the fact that politics of wealth distribution have included almost punitive taxation levels on those with high incomes and the use of that wealth to provide goods and services, and even incomes, to people who get more out of the State than they "put in" in terms of things can can be given a clear monetary measure.

That division between those chasing money/wealth at all costs and the "silent majority" seems to have led to the present Financial and Banking crisis, since the Finance Industry was very obviously THE place to make lots of money.

Cass