Farmers pay the price of keeping UK inflation low

UK - FARMERS are paying a heavy cost in keeping inflation at levels which are in line with Treasury policies, but there may yet be a price to pay unless food prices are allowed to rise to give the industry a reasonable level of profitability.
calendar icon 18 May 2007
clock icon 1 minute read

That was the view of Duff Burrell, the chairman of the National Beef Association (NBA), when he spoke yesterday at Beef Expo 2007 in Skipton, North Yorkshire. He also claimed that farmers urgently need higher prices to compensate for the loss of direct support, following the reforms of the Common Agricultural Policy.

Burrell said: "This means that the government is contradicting itself when it tells food producers that they must re-connect with the market to make up for subsidy losses because it is also pressurising all markets, including food, to keep prices down.

"Direct subsidies were part of the post-Second World War cheap food policy and removal of these measures should have resulted in compensatory price rises to keep farmers in business, but that simply has not happened.

"Whether it likes it or not, the weight and strength of the government's low inflation drive makes it a player on the food market. A continuation of this policy will define just how much, or how little food, can be produced domestically and how many, or how few, farmers can remain in business."

Source: Scotsman

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