Falling food prices on supermarket shelves are putting extreme pressure on farmers, warns the chief executive of NFU Scotland.
The warning from Scott Walker came in response to news yesterday that UK inflation had turned negative for the first time in more than 50 years.
“Farmers across many commodities are facing a challenging time,” he said.
“While food has never been cheaper in real terms for the public, the incessant pressure on food prices has a real impact on those who produce the food we eat.”
The supermarkets’ mantra of “everyday low prices” had paid dividends with consumers but the reality was that deflationary domestic prices for food were felt by other parts of the supply chain.
“If we want to develop our ambition to be a ‘land of food and drink’, then it is essential that risk and reward are better shared across the whole supply chain,” added Mr Walker.
“If we continue to take our high quality food for granted, we may not always be able to get it in the future.”
Meanwhile, a top agri-consultant has said many farm businesses will struggle to make a profit in the coming year.
Richard King, who edits the Agricultural Budgeting and Costing Book, said any turnaround in markets for the main agricultural commodities was unlikely.
The introduction of the new CAP regime would also impact on businesses, with farmers in Scotland and Wales likely to be worst hit as they moved from historic to area-based payments.
“Faced with these external pressures British farmers need to focus on the factors that they can control how their businesses are set up and run,” added Mr King.
“The gap between the best and the rest in UK agriculture is growing.
“The top farmers, in any sector, will still be making money even in the current business climate.”
He said there was much to learn from the best producers at home and abroad.
“Taking inspiration from outstanding operators can help the entire industry improve and even see it prosper” added Mr King.