Inadequate profits for thesupply chain to re-invest

Dust everywhere as the contractors roar up and down the drive, bringing in our harvest. Yield is down 30 per cent overall on last year (which was a very good year), some of our sandy land is down by 50 per cent, and things are going to be very tight indeed next year.

There is still 300 acres of fourth cut grass silage to make, and it could be soon if the weather is favourable. We then need to empty the dirty water lagoons, which have mainly rain water in them following the recent bad weather; it would be nice to have them all empty on the 1st of November. Work will begin this week on the lagoons, with some restoration of the walls and a general increase in capacity.

n It’s been an interesting three weeks. I first attended the Liberal Democrat conference in Liverpool, where we heard supportive words about agriculture, and I attended a few more fringe meetings where I made myself unpopular with UNITE trade union over the abolition of the Agriculture Wages Board- a relic of the past; beurocratic, expensive, unnecessary and unique to agriculture.

I joined some of the late night gatherings, where they all dressed very casually indeed, and it’s quite difficult to recognise some familiar faces when they don Hawaiian shirts. Not everyone in the party enjoys the coalition. Indeed a whole book of songs with anti-coalition words set to popular tunes were sung with great gusto. As an example, a popular Christmas carol was hijacked with the words ‘On the first day of Christmas the Coalition gave to me. ‘Not very much.’ is the only line I can include in this column.

n On to Manchester, where NFU President Peter Kendall came under attack from UNITE and of course playing to the gallery and displaying his true colours, was Hilary Benn. Peter was also attacked by Hilary Benn over bovineTB, crucially letting slip that he himself was no longer interpreting the science but bowing to public opinion.

He is on shaky ground indeed, and it is just as well that Ed Milliband has moved him on from agriculture. As I have said many times, Hilary did some very good things for agriculture, but I am afraid that his legacy will be lack of action over bTB.

n In Birmingham, the Conservatives came out in force and our fringe meeting had the full Defra team’ Secretary of State Caroline Spellman, Agriculture Minister Jim Paice, Environment Minister Richard Benyon, and parliamentary under-secretary Lord Henley, all present and correct. The first thing that struck me was how much at ease the team seemed to be with each other, and how supportive they were. Of course, you could argue that they are very friendly as they need our help over the draconian cuts which will be announced later this month, and things will change very quickly once their plans are announced. Time will tell.

n I then attended the Farmer’s Weekly Awards in London, where we were treated to a succession of superb agricultural businesses, innovative, entrepreneurial, imaginative, and the truly outstanding.

What a change from the doom and gloom we usually hear about agriculture. This was progressive, science-led, dynamic agriculture at its very best and I felt truly lifted by the long list of awards and their worthy winners.

However, I was confused by all this on the one hand and the message Prince Charles delivered to the gathering. Small is beautiful he said. Small scale family farms and not large enterprises are the future of British agriculture. The countryside is not an industrial production line, and he showed concern over the move to larger farms.

“I shudder when I hear ever larger farms described as units,” he said. “That is the language of the factory, and that cannot be the right direction for British agriculture. We must resist the temptation to describe farming as an industry, and prevent the words turning into reality, because agriculture is exactly that – it is about the land and the culture that those who work on it create, as much as it is about producing food.”

Whilst I agree with a great deal of what Prince Charles says, there is one problem; survival. This column has repeatedly described the pressure and demands of the food chain, processors and retailers; and the reluctance of the consumer to pay proper prices for food. Proper food is expensive to produce.

Farmers will react to market forces, and the markets ruthlessly deliver the same message day in day out: efficiency of production and lowest unit cost is king.

The message is, if you cannot produce at this price, then best you do something else. Several dairy farmers a day over the last thirty years have done exactly that, and every ten years the number of dairy farmers in this country halves, but production is still not far from the average as others expand.

Let’s turn to the other story of the week; Tesco’s Terry Leahy retires as record profits are once again announced at the half yearly slot. These were his last set of results in a glittering career which has served Tesco share-holders very well indeed.

This is surely the most impressive career in retailing we have ever seen? Sir Terry is due generous praise from share-holders as he has delivered phenomenal growth, and more to the point, his ventures into non-food, financial services, on-line, China, India, Japan and USA. If they realise their potential, will be huge.

His vision, intellect, insights, drive, shrewdness and understanding of consumers, markets, and of course competitors, has delivered the magnificent achievements to date. But does Sir Terry leave a legacy or a liability? What about the suppliers, the farmers, the countryside?

How does Tesco fit in with Prince Charles’s vision? There is no doubt that Tesco is agriculture’s biggest customer, but does it allow the countryside to flourish; the farmers a decent living? Some have undoubtedly built big businesses in partnership with Tesco, but many, many more have been driven out of the industry.

The intensity of retail price wars, their appetite for large margins, their eagerness to give the consumer cheaper food than anyone else, carries a huge price. Tesco is king; it has triumphed time and time again under Terry Leahy’s stewardship, with millions of happy consumers every week entering its doors.

There is a dark side to all of this, and the constant squeeze on processors and farmers is denying the supply chain adequate profits for re-investment, and without re-investment there is no future. I salute Terry Leahy for his obvious skills and leadership, but his direction of travel has left the countryside traumatized.

Farm Diary - Gwyn Jones