Nick Clegg: “Time to take on the supermarket Trolleygarchs”

That will be the message from Lib Dem leader Nick Clegg later today when he addresses the National Farmers’ Union conference. And he doesn’t mince his words:

I’m a liberal. I believe the market should set prices for goods. When that drives efficiency from farmers, and benefits consumers, I welcome it. But if it is delivered by threats, blacklisting, and bully-boy tactics, if it delivers only profits for the retailer, not lower prices on the shelf, the market has failed.

“We already have proof of price-fixing on milk. And some supermarkets used calamities like Foot and Mouth or the summer floods to drive down farm gate prices, while keeping retail prices unchanged.

“Turning tragedy into turnover is a disgrace. It’s time to take on the Trolleygarchs.

“The Competition Commission’s proposals just don’t go far enough. They’re only interested in increasing rivalry between supermarkets – even if that means we have to have hundreds more of them.Their remit didn’t allow them to look fully at the rough deal primary producers are getting, even though they’ve seen some damning evidence.

“They do, at least, call for someone else to monitor the supply chain. It’s got to happen. I want a strong Food Trade Inspector, with his own powers of investigation, to enable complaints to be properly examined – with total anonymity for complainants. And I want planning rules to stop, not encourage, another generation of out-of-town stores springing up.

“It’s time for Fair Trade for British farmers.”

But Nick is clear, too, that trade tariffs, imprt barriers and export subsidies must come down in order that “British farming [can] prosper in a truly free market”.

If you want to devour Nick’s speech in full, read on…

Here’s the full text:

It’s an honour to be here as you celebrate 100 years of the NFU. Farming is part of the lifeblood of Britain, and the NFU helps keep that blood flowing: so let me wish you another 100 years of success. We all know British farming is changing.

The challenge is to make sure it changes for the better – becoming profitable, environmentally sound, and sustainable – instead of withering away under the pressures you all face. Last year saw an unbelievable series of calamities. Foot and Mouth. Bluetongue. Bird Flu. Flooding. And all just as you were getting your finances in order after the mess-ups at the Rural Payments Agency.

Your staying power is truly impressive – your determination to stay working the land in the face of such adversity. Especially when the government seems to go out of its way to make things harder for you. They just don’t seem to get the countryside. My ambition is to make things easier.

Not by returning to unsustainable production subsidies, or closing the doors against all international trade. But by setting a fair framework, supporting your stewardship of the land, and then getting out of the way so you can get on with the business of growing and rearing our food. Farming is close to my heart, and to my party’s. More than half of Liberal Democrat MPs represent rural seats, where farming is part of daily life. We’re on your side.

Today I want to talk about three things in particular. Climate change. Trade. And supermarkets. Climate change is big news for farmers. You could bear the brunt of the devastating effects of global warming. Climate change will bring unpredictable weather – floods, drought, storms, heatwaves, late frosts and more that we cannot foresee or prepare for. Planning ahead across the seasons and years will get harder and harder. And new pests and diseases will find a home in our crops and livestock.

We have got to take this seriously.

I know it’s hard to plan for and invest in the future when you can’t tell if your farm will even break even from one year to the next.
So the government must help, and support you as you adapt. And as you work to reduce some of the damaging effects farming can have. With 7% of Britain’s greenhouse gases coming from farming, we cannot postpone dealing with the problem. It isn’t just farming, of course. Every industry has to change if we’re to cut emissions as much as we need to. But methods of farming that pollute, destroy biodiversity or damage the natural environment must go.

I know you don’t want to be glorified park wardens, but you can and should be stewards of the land even as you farm it. Britain has a spectacular landscape, much of it shaped by you and your ancestors through generations of hard work. Let’s protect it, together.

From the Common Agricultural Policy to supporting local food: there is plenty to do. A proper price for carbon, within a global framework of emissions trading, will help reflect the environmental costs of transporting food long distances, giving local food a competitive advantage. But it’s years off. So Defra and local authorities have got to support better the network of farmers’ markets. Especially encouraging them to be set up in poorer areas, where the need for good value food is the highest.

We must establish a better network of local abattoirs to reduce the miles animals travel to slaughter. Once Meat Hygiene Services move to recovering all their costs, local abattoirs will go, and food miles will get worse. We mustn’t allow it to happen.

And government should look again at what it buys. Every year, 617 million school meals are served. And the NHS spends 300 million pounds on food. Isn’t it time they started buying sustainably?

And there’s more farmers can do, with the right help and support. You can grow certain kinds of sustainable biofuels. You can help with more sensitive management of floodplains – and government should support you in weed-dredging work and drainage. You can help reduce soil impaction in uplands, reducing the flood risk to lower, urban areas, too. And you can dramatically reduce the impact of farming by reducing nitrous oxide emissions, in particular through anaerobic digestion.

Why on earth is the government devoting all their efforts and energies to a new generation of nuclear power stations? It would make far more sense to support small renewable energy projects like AD on a far larger scale. And support for AD would be far more effective in cutting nitrous oxide than just imposing the impossible and ineffective regulations for Nitrate Vulnerable Zones.

It isn’t all bad news, though. Recent CAP reforms, by decoupling support from production, will help you to focus on the environment. But the government must remember that its grand strategy to protect our natural world is nothing without you. Without a strong farming sector, the strategy will just remain a piece of paper in a file in Whitehall. So we need to sustain farming for the future.

Government must help fight disease – reinstating animal health budgets for councils would be a start – and they must compensate you fairly when it hits. Especially if the disease outbreak is their fault. I will oppose any plans by government to make you pay a levy to fund disease compensation. And, if and only if the science shows it will work, I am prepared to support plans for a limited cull of badgers to stop the spread of TB.

Sometimes it seems people in government just don’t understand the pain farmers feel when their herd is sent to be culled. Compensation – if it comes – may ease the financial pressure but never the devastation. I know many of you are also worried about the future.

A couple of months ago in Longsleddale, in Westmorland, I met a group of hill farmers. Of seven local farms, only one had plans for who would carry on when he retired. The thought of seeing farms passed down through the generations, finally abandoned, broke their hearts. If we want a new generation of farmers we’ve got to make it easier to live in the countryside. Protecting our post offices, boosting rural public transport, and above all making homes affordable.

Local authorities should do more to help farmers convert empty buildings into new, protected, affordable homes – some agriculturally tied, to allow the next generation of farmers to live affordably on the land. And government should look at investing through the CAP in training, for young farmers in particular, so we have the right skills for the future. They must also sustain and deepen support for parts of the country where keeping farming going is an extra challenge, like upland areas. Failure to do so could see huge areas of low-intensity agricultural land abandoned, with disastrous environmental consequences.

So my parliamentary team is looking for ways we can extend support for these deprived areas, so farming can continue for future generations. There are other changes I want to see at European level to the CAP in the long run. Co-financing so Britain can tailor support to British circumstances. An end to the distortions which mean the richest 20% of farmers get 80% of the support.
But broadly, CAP reform is headed in the right direction, and should go further still.

The EU must move on trade barriers, import tariffs and export subsidies if we are to make progress in the ongoing Doha round of trade talks. I was there at the inception of those talks in Doha, and I’m certain their failure would be devastating to the future of world trade and British prosperity. I know the lowering of trade barriers on food imports worries many of you.

It’s hard to compete with low-cost imports that don’t match the EU standards you work so hard to meet. So the EU should press the WTO to allow countries to demand some basic animal welfare and environmental standards from imports. That was the rationale behind our successful campaign against Brazilian beef, demand for which was driving the destruction of the rainforest.
Food labels should also make clear where food’s from, and if it doesn’t meet EU standards.

As tariff barriers come down – which they should – this will be vital. And to help developing countries, the EU should support capacity-building projects to enable farmers to move up towards our standards. And there must be a fair market in labour too: the scrapping of the Seasonal Agricultural Workers’ Programme caused huge problems for growers across the country.

The government believes there is no need for any low-skill migration – even temporary – from outside the EU. Growers know better.
We cannot have another season where crops rot in the fields. The government must act to make sure British needs for seasonal workers are met, or we will just provide a new marketplace for people-trafficking and illegal working.

It will be a challenge for British farming to prosper in a truly free market. But a challenge I am convinced British farmers can live up to. To face up to supermarkets, however, you need more support. Supermarkets have an important role to play in our retail market. They generally do a good job in keeping prices for shoppers low.

But enough is enough.

Britain’s food market is now controlled by a “Trolleygarchy” – with power and profit sewn up by the few biggest players. I’m a liberal. I believe the market should set prices for goods. When that drives efficiency from farmers, and benefits consumers, I welcome it. But if it is delivered by threats, blacklisting, and bully-boy tactics… If it delivers only profits for the retailer, not lower prices on the shelf…

The market has failed.

We already have proof of price-fixing on milk. And some supermarkets used calamities like Foot and Mouth or the summer floods to drive down farm gate prices, while keeping retail prices unchanged. Turning tragedy into turnover is a disgrace.

It’s time to take on the Trolleygarchs.

The Competition Commission’s proposals just don’t go far enough. They’re only interested in increasing rivalry between supermarkets – even if that means we have to have hundreds more of them. Their remit didn’t allow them to look fully at the rough deal primary producers are getting, even though they’ve seen some damning evidence. They do, at least, call for someone else to monitor the supply chain. It’s got to happen.

I want a strong Food Trade Inspector, with his own powers of investigation, to enable complaints to be properly examined – with total anonymity for complainants. And I want planning rules to stop, not encourage, another generation of out-of-town stores springing up.

It’s time for Fair Trade for British farmers.

But farmers must also recognise that supermarkets are powerful because they’re popular. If you want to change the supermarkets, you need to change the people supermarket bosses listen to: the customers. You might think it’s a hopeless task. But it can be done. 20 years ago Marketing Magazine predicted demand for new fangled Free Range Eggs could “eventually” reach 4% of the total market. These days, 1 in 3 eggs sold in Britain is Free Range. Consumers can change. The NFU is doing good work to make it happen – and it’s vital this continues, and goes further.

That means farmers’ markets – which help drive custom into town centres and suburban shopping streets, and away from the out of town supermarkets. It means finding new outlets like vegetable box schemes, or your own websites. It means processing your food locally – alone or in cooperatives – to create specialist produce with a higher margin. It means opening up your farms to visitors – through B&B, school visits, and farm shops.

I work with a brilliant charity in my constituency, a 130 acre working farm called Whirlow Hall, which offers day trips and residential stays for 10,000 inner city children a year. It’s a life-changing experience.

It’s no use despairing that inner-city children don’t know that milk comes from a cow, or what an onion looks like. Help to do something about it – and you’ll have a new generation of consumers who actually understand and care where their food is coming from. I am always struck in France by the emphasis put in every part of the country on “produits regionaux” – regional specialities that get a special display case in every service station and supermarket, and are cherished by local people. Tourist agencies should help you to emulate that success here, and market your farms and your food.

I’m talking about nothing less than a new life for the countryside. Because this is a time of tremendous opportunity for Britain’s farmers. Global demand for food, and for the quality food we produce here, is growing. We can take advantage of it.

By taking the environment seriously, equipping ourselves to compete in a free trade world, and investing in the future, I have every confidence that British farming will be prosperous, and sustainable, for the NFU’s next 100 years.

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14 Comments

  • Three cheers to Nick for challenging the ‘trolleygarchs’. There is abundant evidence of their serial abuse of their market power and any party that aspires to greater fairness cannot neglect this.

    However, these abuses need to be tackled directly and made illegal; just creating yet another regulator in the form of a Food Trade Inspector is likely to be as useful as a straw hat in a hurricane. The Supermarkets are past masters at neutering regulators (including the Competition Commission itself to name but one).

    Nor do I think that farmers’ markets and the like are the answer. Not that I’ve anything against them as such and they certainly have their place but the job of farmers is … well farming – not retailing. It is not unreasonable to expect that there should be a retail sector that does that job without grabbing ALL the profit from the entire supply chain.

    There are many things that could be done but that would be beyond the scope of this comment – suffice to say that where there is a political will there is a way.

  • There is no conflict between liberal democracy and a need to police the ‘free’ market. One of the Liberal Party’s cornerstone economic policies was always a Monopolies and Merger Commission with real teeth because the Party recognised the tendency towards monopoly in advanced capitalist society had to be countered, and how right we were as the food retailing sector shows. To those for whom the market can do no wrong and who believe that any interference in its operation is illiberal I suggest that they should consider how much economic freedom there is in a situation of monopoly capitalism

  • Good to see another decent poll rating for the Libdems in tomorrows guardian ICM poll -21%

  • Andrew Duffield 19th Feb '08 - 10:02pm

    This would have been a good opportunity for Nick to have mentioned our excellent, distinctive and long standing policy for charging supermarkets a business rate based on the full development value of their vast car-parks and speculative land holdings. The additional revenue raised from these (and all other undeveloped, under-utilised or derelict commercial sites) would allow rates for local businesses to be reduced accordingly – lowering commercial rents as well in the process – so levelling the market place and allowing free competition (with greater price parity) to flourish in a fair, sustainable and non-interventionist way.

    Perhaps he’ll remember next time.

  • For some reason the number prefixing responses isn’t showing up on my computer any more, but replying to Tristan Mills: as I respect the seriousness of your comments without necessarily agreeing with you I would be interested to hear an elaboration of your point that monopolies cannot charge monopoly prices because this makes no sense to me. The supermarkets are not, I would suggest, a prime exemplar of government cronyism, but rather an illustration of what happens when a few companies become so powerful that they can use their economic muscle to determine the structure and shape of the market in which they operate. They do this in a quasi-competitive way, and at the same time have covert anti-competitive agreements in some areas. All of these aspects are acting against the interests of the consumer and primary suppliers. How less government regulation would rectify the situation baffles me.

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