Producer Groups 'key to taking back control' of beef sector

Beef farmers believe Producer Groups are 'essential' in bringing the balance of power back to the centre
Beef farmers believe Producer Groups are 'essential' in bringing the balance of power back to the centre

Producer Groups could help address the dominance and lack of competition of processors and retailers amid fears the beef sector is being 'driven to its knees'.

Industry groups and farming unions have recently voiced their concerns surrounding the beef industry's ongoing situation.

The NFU said farmers and the government need to work together to find solutions to this 'emerging crisis'.

Meanwhile, the National Beef Association (NBA) said the future of the industry is is being 'traded away for pennies', with every penny removing over £110,000 from producers.

However, agricultural cooperatives called Producer Groups could help address the issue, the NBA says.

It believes these groups are 'essential' in bringing the balance of power back to the centre instead of entirely with the processor.

Such groups an concentrate supply and improve the marketing of products, optimise production costs, carry out research and share and disseminate their individual experiences to the wider co-operative.

Chris Mallon, NBA chief executive said: “If new groups have any chance of being able to stand up to the dominance of the powerful retailers and processors, they will require ongoing support, especially in the early years.

“They need to be looking towards direct contracts with retailers, creating a distinct brand to build up a consistent quality of product.”

'Control supply and work together'

The NBA says both future and present groups should consider how they sell their stock, moving away from bid prices on a Friday, and towards tenders with processors and direct contracts with retailers.

Any new Producer Groups would also need to be well funded and organised, with potential to be marketing a significant percentage of UK cattle, perhaps over 40%.

“Farmers need to start to control the supply of cattle, and work together, if they want to have a future supplying beef,” said Mr Mallon.

“Size matters, and as we see at the moment, no one farmer matters on their own.

“Producer groups will need to be farmer-owned and independent of the processor and retailer. Retailer and processor owned groups only satisfy the needs of those who ultimately control it and that is not the farmer,” he said.

The NBA says independence from those further up the food chain is critical, and any relationship needs to be under normal commercial rules.

The day of farmers giving over their commercially sensitive information to third parties needs to end, it says.

Mr Mallon added: “Giving over your costs only drives down the price. We need to take back control by coming together and sticking together for the common good.”