A hard hitting campaign urging farmers to use auction markets as a means of achieving transparency in pricing has been launched by the The Institute of Auctioneers and Appraisers in Scotland (IAAS).
In a strongly worded document, the institute, which represents every livestock market in Scotland, has highlighted what it calls the ‘insidious use of closed-door deals to shield the major buyers from the transparency and honesty which can only be guaranteed in the livestock auction ring’.
The call is timed as major buyers, often those supplying UK supermarket chains, increasingly demand direct contracts with farmers and, in the case of cattle, are often making stipulations on maximum movements over the entire production cycle.
IASS has alleged these stipulations often amount to ‘nothing more than a deliberate attempt to avoid price scrutiny in the ring’.
IASS members claim to have seen a gradual rise in direct contracts for a decade, but over the last 12 months this has been more noticeable, with an absence of buyers representing supermarket suppliers from prime sheep auction rings.
The Use Your Mart campaign is urging farmers to take back control and demand transparency in pricing by selling through the ring.
IAAS president Scott Donaldson said: “Supermarkets are demanding more direct contracts at the very time when farmers need to ensure they are genuinely receiving a fair price for their produce.
“This is a practice which puts the efficiency of the rural economy at risk and might even be deemed by the authorities to be anti-competitive.
“Access to a fair pricing regime, as delivered by the network of livestock markets we represent, is the cornerstone of fair farming practice. We want to work with supermarkets as important and valued stakeholders, but it is time for this evasion on price to end.
“You would almost think the UK’s major retailers were seeking to deliberately avoid fair and transparent pricing in our food chain.”
IAAS is also critical of supermarket buyers limiting or excluding cattle which have been deemed to have had too many movements.
This move is despite livestock markets across the country investing in cutting-edge technology to improve traceability and animal welfare.
“Only the auction system can guarantee an outlet for livestock at any stage with the security of payment on the day.
“Cashflow is a lifeline for many producers and may become increasingly important,” added Mr Donaldson.