New report: Fairtrade begins at home: Supermarkets and the effect on British farming livelihoods

A report by the Church of England's Ethical Investment Advisory Group, November 2007.

This report looks into the relationship between the major food retailers and farmers in direct response to concerns from members of the Church of England's General Synod regarding the doubtful viability of many farming livelihoods given the squeeze on farm gate prices. This review represents a contribution to the ongoing debate around the future of a vibrant, sustainable agricultural sector to which the Church is committed. As part of this review we have found:

• continuing price pressure on many parts of farming that are putting livelihoods at risk

• there are many complex reasons for the malaise in British farming, but the pursuit of cheap food, coupled with the skewed buying power of the food majors is undoubtedly contributing to the difficulties of the sector

• the review identifies a number of invisible and pernicious practices that the consumer is largely unaware of, and which have been accepted by farmers as a fait accompli as part of the price of doing business

• these practices include labelling that obscures the country of origin of the primary ingredients of some products labelled as British but often only processed or packaged here; flexible contract terms that seldom work to the advantage of the farmer; flexible payment terms that, subject to arbitrary change, have often put farmers to increased cost and financial loss; facilitation payments; deductions and a range of financial inducements paid to the retailer or processor at the farmer's expense. There is little evidence that retailers share the benefits of promotions with farmers, and much evidence that farmers, in the main, bear the costs

• this report looks particularly at the dairy industry where retailer price competitiveness for a staple product has led to a significant reduction in the number of dairy herds, placing many of those remaining at the margins of economic viability, although more recently there are some positive signs of change

• concludes that farmers do not seek special treatment, but a genuinely free market that is not skewed towards a few retailers with enormous buying power. There is visible inequality and dysfunction within the supply chain, which in our view requires attention. Farmers are asking for no more than a fair price for a fair product which requires a connection to be made by the British consumer that fair trade begins at home with British produce, reared and farmed by British producer.

Available for free download at http://www.cofe.anglican.org/info/ethical/policystatements/fairtrade.pdf