Price pressures imperil future of fresh produce growers, warns NFU chairman

Guy Poskitt sounds alarm at the strain in relations between retailers and producers that threatens to stifle business plans.

Poskitt (above) believes that retailers should pay more for produce - image: NFU
Poskitt (above) believes that retailers should pay more for produce - image: NFU

Fresh produce growers are unable to invest in the future because of the tremendous price pressure they are experiencing from retailers.

This is the warning of Guy Poskitt, one of the country's largest root vegetable growers and chairman of the National Farmers Union (NFU)'s board for horticulture and potatoes.

Poskitt made his claims while speaking to Grower in support of the letters that were written last month (August 2015) by the NFU's leaders to the UK's top ten retailers. In the wake of this summer's dairy crisis, the letters demanded urgent discussions on how best to achieve fair and sustainable relationships between retailers and producers of all sectors.

Poskitt said he has not met a single fruit or vegetable grower in the last six weeks who has any business expansion plans.

He said: "Rather, they are talking about producing less because they are not receiving enough income from the retailers and are just receiving enough income to pay their bills and maintain the status quo. I have been to see, for instance, strawberry growers, asparagus and other vegetable growers, and tomato producers. They all tell me they are looking to stand still or reduce because they are under tremendous price pressure."

Poskitt added that everyone has "huge concerns" about the impending Living Wage particular because horticulture is very labour-intensive.

He said: "We support the fact that £6.50 an hour (the Minimum Wage) is not enough money but we (producers) also need to be paid a better price by our customers - 'living wage, living price'."

As Grower went to press, the NFU had so far met up with the discount supermarket Aldi - which earlier this summer signed up to NFU's Fruit and Veg Pledge, promising to fund all produce promotions itself to help support British growers and suppliers.

Comment - Jack Ward, British Growers

Jack Ward, chief executive of British Growers Association, agreed that investment needs to be made at every point in the fresh produce supply chain. He said: "If we don't invest it's going to be very difficult to see exciting, new products and lines coming forward." He also pointed out that the retail sector is currently experiencing a lot of change - and that that change is ultimately having an effect on producers.

"The retailers continue to support the UK markets for fresh produce ... but there's a big shift in the way that multiple retail is done and the impact is being felt all the way down the supply chain."

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