On average, farmers only get 8 pence of every £1 spent by the consumer. This isn’t sustainable and most farms need to diversify into more profitable markets.
Together with the market researcher Agrismart, the Sustain Alliance has explored how 500 farmers from across England and Wales feel about these issues.
The respondents are a representative sample of English and Welsh agriculture: large, medium, small, arable, livestock, poultry, pigs, dairy, horticulture, and mixed farms.
Supply chains and routes to market play a critical role in influencing what farmers grow and how they grow it. They are an important part of the food system that needs genuine change.
Supermarkets and large manufacturers won’t disappear anytime soon, but it’s critical that their dominance (with over 90% control of the retail market) is reduced.
The survey results show that farmers clearly want change. Most recognise that the current food and farming system is broken and needs a shake up, but the future is so uncertain that making these changes is daunting.
Many good food enterprises have already shifted their mode of operation during the pandemic with the biggest changes being the use of e-commerce (45%) and click and collect/delivery services (45%).
Despite significant barriers, the majority of the survey respondents said they want to supply into food hubs, box schemes, independent retailers and the catering/ hospitality sectors.
The benefits for farmers of diversifying into direct sales channels are seen to be:
- Getting a fairer price and having a more resilient business
- Having greater involvement in the market post-farmgate
- Building closer relationships with customers
- Being supported for managing land in a more climate and nature friendly way
- Providing more secure and better employment opportunities
The results suggest that many farmers want to have access to locally based infrastructure and to shift partly, or fully, into farmer-focused supply chains.
56% of respondents said they want to supply into a different market and a further 20% said they would consider doing so. The top four infrastructure needs were: an established food hub, box scheme and/or farmers’ market (51%); a local independent retailer (28%); a local packer and/or distributor (28%); and/or their own retail space (26%).
Over 50% of respondents want to join or start a cooperative or farmer buying group, with another 25% saying they would consider doing so.
To successfully move away from the current approach of supplying into supermarkets and larger processors/manufacturers, farmers said they need better access to local infrastructure, affordable finance, marketing knowledge, and market outlets (like established box schemes or food hubs).
Here’s a summary of the data:
86% of the survey respondents currently supply a supermarket, processor or manufacturer, with only 12% selling directly to the consumer.
Only 5% of respondents said they would ‘prefer’ to sell to a supermarket, processor or manufacturer, with the top three preferences being a food hub (55%), direct sales (36%) and/or food service (29%).
56% of respondents said they want to supply into a different market and a further 20% said they would consider supplying into a different market.
The opportunities which those preferred markets could provide include a better price (75%), able to sell large quantities of produce (49%), business resilience and stability (42%), better market control (38%), direct links to customer (31%), and supporting future climate and nature ambitions (30%).
The top four barriers to supplying into a preferred market were:
• Lack of access to affordable finance to make necessary changes (48%)
• Lack of time to do market research/planning (44%)
• No local market to supply to (39%)
• No access to local infrastructure (28%)
We asked about infrastructure needs. The top four were the need for an established food hub, box scheme and/or farmers’ market (51%), a local independent retailer (28%), a local packer and/or distributor (28%), and/or own retail space (26%).
By changing to a preferred supply chain, the respondents said it would:
Improve Sales margins (79%)
Enhance Business resilience and agricultural diversification (62%)
Improve Animal health and welfare (51%)
Provide more jobs (38%)
Enhance biodiversity (33%)
Enhance carbon sequestration/storage (30%)
Improve Communications with the consumer (31%),