Lower prices for shoppers must not mean a squeeze on farming and suppliers, argues Co-op Food chief executive Jo Whitfield

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While grocers attempt to keep food prices down, how will this impact farmers and suppliers?

Right now, rising energy bills are putting a significant strain on many families up and down the country, and really squeezing what they can afford to spend on food. 

Some consumers will be looking to manage their budgets by switching to cheaper food options or buying fewer treats. 

But, according to the Joseph Rowntree Foundation, around 1.8 million children are already growing up in deep poverty, meaning the household income is so low that it is completely inadequate to cover the basics. 

For those families who were already running on a tight food budget, their reliance on food aid is going to increase or they may even be forced to miss meals. 

On the face of it then, keeping the price of groceries as low as possible is something we’d all champion. The quandary is that lower prices for shoppers can often mean a squeeze on farming and suppliers. 

“On the face of it, keeping the price of groceries as low as possible is something we’d all champion. The quandary is that lower prices for shoppers can often mean a squeeze on farming and suppliers”

Britain’s exit from the European Union means farmers are facing fundamental changes to how and when they will receive government support for producing food, protecting the environment and preventing climate change. 

Higher production costs are also hitting the farming sector, from the rising costs of energy and animal feed, to wage growth. For growers, 70% of their costs can be down to wages.

With the looming threat of a supermarket price war as retailers seek to protect their market share, the victim in all this could be the British farmer.  

Farming is tough. It requires a rare breed. Someone to plough on in the face of adversity, be it against rising costs, weather conditions, import competition or falling prices. 

Retailers are often seen as a foe, not a friend.

The big squeeze

The UK’s environment, food and rural affairs secretary George Eustice recently told farmers to “stand their ground” in negotiations with supermarkets. But the recent decision by one supermarket to retract its commitment on British beef highlights that it’s easier said than done as some buyers will vote with their feet. Many farmers would argue that supermarkets hold all the ace cards.

The race to the bottom on price has also prompted fears about the sustainability of food production driven by a culture of cheapest is best and the impact of cheap processed foods on people’s health.

The big squeeze is on and cheap food is obviously good on the wallet for consumers – maybe less so on the waistline – but cheaper shouldn’t mean that British farmers are the ones served up the smallest part of the pie.

“We need to think differently about how we work with our farming communities and keep the costs of food down – ensuring that we’re able to offer the real value that customers need, in the ways that matter most, without compromising on our values”

We need to think differently about how we work with our farming communities and keep the costs of food down – ensuring that we’re able to offer the real value that customers need, in the ways that matter most, without compromising on our values. 

Co-operation itself is built on a number of ethical principles. Equity, solidarity, honesty, openness, responsibility and caring for others. While these were the building blocks for the founders of cooperation back in the 1800s, they do not look out of place today as we seek to tackle the challenges of inflation.

These principles will be fundamental to help us rethink how we need to invest in British farming for the long term. 

We need to ensure we’re giving customers a sustainable and healthier diet while minimising costs to ensure we can offer fairness on prices for all.