Improving efficiency and differentiation are the survival lessons UK agriculture could learn from the retail sector.
Lord Mark Price, former Minister for Trade and Investment and managing director of Waitrose, told this week’s NFU Henry Plumb lecture that UK farmers would face more competition, lower prices, and less subsidy, irrespective of which trade deal was negotiated with the EU. However, there would be an opportunity to export more.
Retail was facing similar headwinds, with the rise of the discounters, costs increasing ahead of sales, business rates, the National Living Wage and higher import costs due to a weak pound.
Couple this with the growth in online shopping, which Lord Price predicts to grow from 5 per cent to between 10 and 20 per cent in the next decade and it made for a difficult trading environment.
He said: “None of these things suggest a more benign selling environment for farmers and producers. There are perhaps, however, lessons to learn from retailing.
“To survive in retailing you need to do two things: become more efficient and more differentiated.
“Players reach for scale as a defence and we continue to see mergers. But what do you do if you are a small player? A Waitrose?
“You begin by looking for new markets.”
He also urged the Government and NFU to decide whether they wanted the UK to be a net importer of food while paying farmers ’from a public utilities point of view’ or help farmers innovate in order to boost production.
“In the brave new world fast approaching be it no deal, customs union or free trade agreement, I would suggest your competition is no longer the farm next door or in the neighbouring county, it will be Mexico or Argentina, or New Zealand or Australia, as well as an EU with potentially higher subsidies,” added Lord Price.
“It has been good enough to be good enough within the confines of the EU’s protective blanket.
“In the future the UK does not need to just compete against 27 EU countries but will instead have truly global competition, as well, as opportunity.”
He said better collective buying and selling would be key requirements for farmers and called on the NFU and others to facilitate this at farmer level.