Prince Charles: Supermarkets give squeezed farmers a raw deal

Prince Charles has accused the big supermarkets and their shareholders of profiting from Britain’s farmers while taking on “none of the risk” of dealing with the roller-coaster economics of food production.

In his latest forthright intervention on issues of public debate from architecture to homeopathy, the heir to the throne has highlighted the iniquities faced by farmers who deal with dramatically fluctuating incomes while retailers reap substantial profits from their squeezed suppliers.

The Prince, who has previously been outspoken on threats to the countryside and is himself a substantial landowner through the Duchy of Cornwall, takes up the cudgels against the supermarkets in an edition of Country Life magazine which he guest-edited.

His lengthy editorial defends the work of farmers as guardians of rural Britain and argues that plummeting incomes are depriving farmers of the ability to invest long-term in their land, thereby storing up problems for sustainable domestic food production.

He said producers were, in effect, being “penalised” for choosing their way of life, adding: “Small farmers find themselves in the iniquitous position of taking the biggest risk, often acting as the buffer from the retailer against all the economic uncertainties of producing food, but receiving the least return.

“It cannot be right that a typical hill farmer earns just £12,600, with some surviving on as little as £8,000 a year, whilst the big retailers and their shareholders do so much better out of the deal, having taken none of the risk.”

Among the most adept agricultural managers is the Prince himself. The Duchy of Cornwall last year increased the income from its farm holdings from £7m to £7.3m as part of an overall surplus of £19.1m paid to him to fund his lifestyle and that of dependents, including his sons.

But the Prince’s criticism is supported by Government figures which show that total income from farming fell by 14 per cent last year to £4.7bn, while average income per farm dropped by 29 per cent to £47,500. The profits of the big six supermarkets over the same period rose to £7.6bn, according to the Campaign for the Protection of Rural England (CPRE).

Emergency payments by the Royal Agricultural Benevolent Institution have also increased dramatically, with three times as many working farmers (nearly 300) approaching the charity for financial support in the first nine months of 2013, compared with the same period last year.

The profit margins of the supermarkets are not the only targets for royal ire. In comments likely to be seen as a shot across the bows of Coalition proposals which critics say imperil areas such as national parks, the Prince describes the countryside as “the unacknowledged backbone of our national identity”. He says: “It is as precious as any of our great cathedrals, and we erode it at our peril.”

Complaints from farmers that they are pressured into reducing their margins beyond sustainable levels are a running sore between retailers and producers.

Campaigners claim supermarkets’ growth has impacted on farmers both by virtue of their huge direct buying power and their competitive advantage over smaller or independent retailers in rural areas.

Graeme Willis, policy adviser for the CPRE, said: “We have lost a lot of the traditional stores that should be the first port of call as outlets for smaller farms. There is a very strong argument for the supermarkets to deepen their direct links by buying from smaller local producers.”

Farmers have placed significant store in the introduction this summer of a new supermarkets ombudsman – the Groceries Code Adjudicator – who will investigate complaints from suppliers of unfair practice.

The new Groceries Code, which applies to the UK’s 10 biggest supermarkets with a turnover of more than £1bn, includes measures such as a ban on retailers from varying supply contracts without notice.

In response to Prince Charles, the British Retail Consortium (BRC) said supermarkets had a record of strong investment in farmers but added that they could not be expected to resolve all the issues faced by the agriculture sector.

Andrew Opie, the BRC’s food director, said: “Retailers are confident their investment means a strong future for farmers in their chain and that a very high proportion of our food will continue to be sourced in the UK. However, retailers cannot resolve all the problems for farmers, many of which are structural and beyond their control.”