Farmers take tiny slice of food profits, study reveals

UK farmers can receive less than 1% of the profit from the food they sell with supermarkets, retailers and processors taking the vast majority. 

NGO Sustain compared the distribution of money in retail supply chains and alternative routes to market, such as box schemes.

Dairy farmers made 2% of the profits that large retailers enjoyed on cheddar cheese, while growers made negligible profits on carrots, a common loss leader in supermarkets.  For four beefburgers the processor gains 10 times the profit of the beef farmer.

Vicki Hird, head of farming at Sustain said it was “astonishing” how little of the money consumers paid for food actually ends up in the hands of the farmers and growers. 

Conversely, in direct supply chains the profits were split more evenly between farmers and retailers. A loaf of bread from a local bakery returned a wheat grower five times more profit than a typical supermarket loaf, for example. 

Sustain is calling for more mandatory reporting, investment in infrastructure to build shorter supply chains and tougher regulation to address this power imbalance, including maintaining the Groceries Code Adjudicator. 

“Farmers carry a lot of risk and work in difficult conditions to put food on our table,” Hird explained. “We also expect them to look after our landscape and our nature – and want them to do more of that in the future. If they are to do that, they need more money in their businesses.”

Sustain’s reportUnpicking Food Prices: Where does your food pound go and why do farmers get so little?, came as the National Farmers Union warned the UK is “sleepwalking” into a food crisis as farmers struggle with soaring prices for fuel, fertiliser and feed, and are reducing production to cut costs. 

NFU President Minette Batters urged prime minister Rishi Sunak to honour the commitments he made to support British farmers through the energy crisis and to set a target for the nation’s food security, with a statutory duty to report on domestic food levels.

An “urgent investigation” into the egg supply chain is also needed. And the cap on the seasonal worker scheme must be lifted to help ease the staffing crisis in the fruit and veg sector.

The Environmental Audit Committee is currently examining the UK’s preparedness and resilience to future food supply stresses or shocks caused by climate change and biodiversity loss. Its call for evidence closes next week.

Comments are closed.