According To Dixon ... Destruction reaped by price deflation

Price deflation is a great idea for the retail consumer, at least in the short term. The supermarkets and other large retailers are scrambling over each other offering low prices right now.

For producers, especially those in the fresh-produce sector, it is not good news. Their input prices continue rising, especially for imported commodities such as seed, fertilisers and agrochemicals. This disparity only amplifies the dilemmas that have damaged UK horticulture for a generation.

Recent press comment identified that fruit and vegetable consumers' prices have risen threefold since the 1990s. Yet over that same time the growers' prices have stagnated. As a result the industry has contracted. Smaller growers have been squeezed out and the larger ones have rationalised.

The net result is an industry composed of a few - very few - large producers. That suits the supermarkets very well. They are only dealing with one or two sources. But in the longer term it sows the seeds of disaster for the industry collectively and for the country.

The effects of price deflation in dairy farming are transforming England into an oil rape prairie. Less obviously but equalling insidiously, destroying small and medium-sized growers will drive out publicly accessible market innovation. That effect will not be immediate but will mirror what has already happened in the USA.

The few remaining large enterprises will commission their own research and development and retain its intellectual property for their balance sheets. That further bankrupts Britain's international credibility in horticultural and plant science.

At the RHS Chelsea Flower Show, renewed secretary of state for Defra Liz Truss was given a very vibrant view of Britain's diverse ornamental horticulture. Hopefully her Norfolk roots will encourage an appreciation in Defra that diversity is equally essential in the fresh-produce sector.

Professor Geoffrey Dixon is managing director of GreenGene international

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