Hirst on ... supply chain co-operation

Growing fresh produce is risky - perhaps none more so than brassica crops. In most cases a grower plants the crop with no idea what it will be worth at harvest - but what they do know is that the market is volatile and prices will change on a weekly basis.

The key to keeping the price steady is to manage supply - most crops are grown based on predicted sales. But one issue often puts a spanner in the works - the weather. This can lead to shortages or gluts. When a product is in short supply it will be worth more and when there is plenty it is worth less. The problem is, it costs the same to produce.

It's easy to blame retailers, but competition to supply supermarkets is high and it is unacceptable not to meet customer requirements. There has to be some slack in the production system to ensure supply. Unfortunately, slack in the system can lead to over-production.

With no contracts between supermarkets, packers and retailers, different growers supplying the same packer can be paid different prices for the same product. You can't blame the packers - if they can buy product cheaper, they will. But brassica growers are reaching a point where they need to see a sustainable price for their crop.

The only way to get sustainability and transparency in the supply chain is for all within it to co-operate. Growers must take responsibility for their situation and not blame packers, while packers must not blame retailers. Supermarket buyers need to understand that dropping the retail price but maintaining the same margin means there is less to share down the supply chain. For growers, this means selling more at a loss or at best breaking even: a situation they are not prepared to tolerate any longer.

- Richard Hirst is chairman of the NFU horticulture board.


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