UK farmers are receiving negligible profits for many items as food prices rise and supermarkets boast record takings.
An average block of cheese or loaf of bread produces less than a penny for farmers, and fruit producers do not fare much better, making just 3p from each kilo of apples.
Food charity Sustain analysed five everyday foodstuffs: apples, cheese, beefburgers, carrots and bread. It argues that because the margins are so tiny, farmers cannot invest in changing to more environmentally sustainable systems.
The report, published on Friday, found that a cereal farmer spends 9.03p to produce a loaf of bread, yet makes just 0.09p in profit, despite a selling price of £1.14. For a loaf sold in an independent bakery, they make 0.5p profit.
It finds that for a packet of four beefburgers sold in a supermarket, the processor makes 10 times as much profit as the beef farmer, who makes less than a penny per packet. For a 480g pack of mild cheddar costing £2.50 in a supermarket, the dairy farmer’s costs are £1.48, and they make less than a penny in profit.
To fix the low payments for farmers, Sustain is calling for ministers to force supermarkets to publish more information about their supply chains, and for the government to put in place regional structural funds to invest in more infrastructure like hubs and local processing that could shorten supply chains. It is also calling for legally binding supply chain codes of practice, which would force supermarkets to give farmers a fair deal.
Prof Lisa Jack, from the University of Portsmouth, a researcher on the report, said: “Our food systems have very high production and overhead costs, yet what profits there are could be shared more fairly along the supply chain, supporting not just affordable food but better incomes for those working in the industry”.
Vicki Hird, head of farming at Sustain, said: “It is astonishing how little of the money we pay for our food ends up in the hands of the farmers and growers. Farmers carry a lot of risk and work in difficult conditions to put food on our table. We also expect them to look after our landscape and our nature – and want them to do more of that in the future, including protecting nature and helping to cut 30% of food-based climate changing greenhouse gas emissions. If they are to do that, they need more money in their businesses. That money should not leach out of the system into the coffers of food industry intermediaries and supermarkets.
“Crucially, our report shows that paying farmers more need not mean higher food prices, so retailers cannot use that excuse – there would be little impact on many products’ retail prices if farmers were paid more.”
National Farmers’ Union chief food business unit adviser, Amy Fry, said: “It is vital that farmers and growers have the confidence they need, working within a fair and transparent supply chain to meet demand from shoppers and to protect the future of homegrown food production.”
The British Retail Consortium, which represents supermarkets, has been contacted for comment.
