We\’re meant to find this a shocking figure

It is hardly surprising, then, that out of every pound spent in a supermarket, only 8p makes it back to the farmer.

Perhaps it is a shocking figure.

I wasn\’t aware that farming is so easy that it adds very little value while the logistics of supply and retailing were so difficult that they add a lot of value. At least, not quite as easy/difficult as that number implies.

16 thoughts on “We\’re meant to find this a shocking figure”

  1. This figure is meaningless. If it was of every pound SPENT ON FOOD, then there is a comparison.

    Yer average Tesco is hardly a FOOD store, and even Waitrose has massive areas of non-foods even in our small town.

    Alan Douglas

  2. What Alan said.

    I imagine 8p is pretty high, given the amount spent on DVDs, booze, clothes, etc. But that won’t stop the Guardianistas crying “something must be done!”

  3. Yeah, this figure is meaningless without some information on how it’s calculated. This article reads more like something you’d find in the Guardian, than the Torygraph…

  4. If it’s 8% including bleach and dvds, it’s more or less meaningless – it might tell you about the mix of stuff sold in supermarkets, is all. If it’s 8% of food, is it all food including processed food? still not shocking to me if the farmer only gets 8% of retail of oven chips. Now of potatoes, yes. Slippery use of a statistic that might mean something or nothing.

  5. If it was of every pound SPENT ON FOOD, then there is a comparison.

    Oi tink it iz . My view is, fuck farmers , they do pretty nicely compared to the rest of us . This is only a problem is the Supermarkets are operating as cartel . Are they or aren`t they ? I see no evidence for it except they are oddly recession proof.

  6. “they are oddly recession proof.”

    So is a lot of other stuff (Sotheby’s!). Apparently. But I suspect it’s to do with the phony recession. The real one will be here shortly.

  7. We also need to understand how vertical the farming operation is. Do they just dig stuff out the ground and then sell it to someone else, or do they clean, prepare, pack and deliver?

    Despite all the above we can be sure that this number will now appear all over the place and used to bully supermarkets without any thought to what it means.

  8. “the phony recession”: a neat allusion, Kay Tie. I suppose it would be going too far to refer to someone called Brown, a son of the manse, as “Dunkirk”.

  9. If it were just food, though, there’d be an interesting comparison to be made with High Street food shops. Supermarkets tend to undercut them. Assuming the farmer receives the same price for food whether it gets sold by a supermarket or a small retailer, which is normally the case, I think, then less than 8p in the pound would make its way to farmers from the High Street.

    So supermarkets are better?

  10. It is unclear to me where the figure comes from, but it is often quoted as a “fact”. It seems to be money to UK farmers of food sold in the UK – i.e. they get nothing from the sale of banana, but that it still in the figures.

    The Competition Commission looked at a few marketes, that for red meat saw the farmer typically getting about half the price

    http://www.competition-commission.org.uk/inquiries/ref2006/grocery/prov_findings/prov_find_app_8_4.pdf

    Red meat is pretty much the supermarket buying the raw material. One wouldn’t expect a ready meal, for example, to yield much to a UK farmer – expect value added by the manuafacturer and distributer plus the use of cheaper foreign sourced ingredients

  11. It used to be said, don’t know whether it is still the case, that most of the flour used in our bread came from outside the UK, places like Canada and the US.
    And I don’t suppose British farmers make very much out of sales of toothpaste, soap, detergent, laundry powder, toilet rolls, kitchen paper, disposable nappies, clingfilm, tinfoil, school uniforms, vests, knickers, shoes, microwave ovens, toasters, kettles, cutlery, glassware, and crockery. Nor would I expect them to see much return on the sales of smoked salmon, avocado pears, scallops, sea bass, swordfish, bananas, mangos, or kiwi fruit.
    A fairly high proportion of stock on sale hasn’t come from UK farmers at all. In particular the more expensive items. I think it would be instructive to have a good measure of the markup versus value added in the chain, but this isn’t it.

  12. “that for red meat saw the farmer typically getting about half the price”

    He gets all of what I pay, because I buy online, direct from the farm.

  13. if you want to argue that the share of final selling price received by farmers is too low, you need to argue that either supermarkets costs are too high or that its operating profits are too high – it drives me mad how people always look at gross profit.

  14. “He gets all of what I pay, because I buy online, direct from the farm.”

    Yay, disintermediation. The internet is becoming the greatest invention of mankind, soon to nudge ahead of the flushing toilet and the sewage system behind it.

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