Farm Assurance Schemes

BY JIM WEBSTER

Are they worth it and if you’re not a farmer have you ever even heard of them?

I was lucky in that when they were coming in, I was out of dairy and was buying calves and selling store cattle. So I managed without the extra expense. I did finish a handful of cattle, but I sold them direct to the consumer. I sold my customers an eighth of a bullock (because when it comes to freezer space, the Janet and John formula is one lamb is half a pig is an eighth of a bullock). My customers didn’t care about farm assurance schemes and weren’t interested in knowing about them. In reality I was my own farm assurance. They were buying from Jim. They knew me, could drop round and even get introduced to their animal beforehand if they so wished.

I was also involved peripherally in a body called ‘Cumbria Local and Fair’ at one point. In simple terms the Fair-Trade movement has done a lot of good around the world for a lot of people. There are doubtless places where it could do better and places where people take advantage of it, but across the board I’d say it has done a lot of good.

Now the idea was that the principle could be extended to Cumbria. After all, farmers in Cumbria (and the rest of the UK) deserve a fair crack of the whip. We should no more be screwed by major retailers than our fellows in the 3rd world (or in any other part of the world for that matter.) There were problems. Some of it was about scale. One supermarket was interested in selling Cumbrian milk from its Cumbrian supermarkets. It’s not one of the big chains, but even so, they were rather shocked to discover that one Cumbrian dairy farm (and not an especially big one) could provide all the premium Cumbrian milk they needed. Cumbria is physically large and with twenty million visitors a year we can get crowded, but there’s fewer than half a million of us who live here all the time.

Another problem was expectations on the part of people wanting to set things up. One idea was we could try Cumbrian beef. Now I looked into it and did the basic research. I could have arranged this comparatively easily and cheaply. Because all cattle have individual passports, it’s far easier to arrange than, say, with lamb. So to be ‘Cumbrian Beef’ the animal has to be born in Cumbria (which is easily proven from the passport and we’ve got plenty of dairy and beef units with cows to produce the calves) and must live all its life in Cumbria. Again this is easily done. If the animal is born on a dairy farm and is sold to somebody who will rear it for beef, the animal’s passport will show which farms it has lived on. It will even show the auction marts the animal has passed through – Cumbria has a lot of good auction marts.

Finally it is possible to get the animal slaughtered in Cumbria and it could then be delivered to the butcher, if necessary with a photocopy of the passport accompanying the carcass. It means the consumer could go into the butcher’s shop and know they were buying Cumbrian beef.

I talked to people in the trade and they agreed that actually that sort of thing could be done for extraordinarily little extra cost. Initially there would be little extra money in it, but the beauty of the system was that, without really costing anything, it would respond to consumer demand. So if customers started asking for Cumbrian beef, butchers would ask the abattoir to send them more. So the buyers standing round the rings at Cumbrian auctions would start putting in an extra bid or two to make sure they bought the guaranteed Cumbrian stock. Slowly the price might rise, and you’d get a Cumbrian premium. But even if you didn’t, it had cost you nothing.

The problem was that this wasn’t enough for people who wanted to set up a scheme. They wanted to guarantee extra welfare or have extra restrictions on feed or whatever. Even if these extra criteria cost nothing, you would still have to organise members and police things. You’d need an organiser who did on-farm inspections etc to make sure that the rules were being obeyed.

As somebody pointed out to me, given a £30k salary, car, and computer, even if they worked from home you were going to struggle to keep the cost below £50,000 a year.

If you got a hundred farmers to sign up for it they would have to pay £500 each and every year with no guarantee that they would see any of the money back because you cannot guarantee a premium. As far as I could see there was no way you could sell that to farmers. Most would think that you’d probably got more chance of getting your money back betting on the horses.

But this is one of the problems at the heart of farm assurance schemes. By law we have remarkably high standards in the UK. In a lot of areas we are ahead of Europe. For example in the UK (and I believe, Sweden) sow stalls are banned. In the rest of the EU, to quote Compassion in World Farming:

“Their use is limited in the EU, with a partial ban enforced from 2013. However it is still permitted for sows to be kept in sow stalls from weaning of the previous litter until the end of the first 4 weeks of pregnancy.”

So in reality we already have a whole UK farm assurance scheme. We produce in the UK to UK standards and the various UK authorities who are in charge of monitoring these standards stand behind them.

Now by definition there are costs you face as a farmer when it comes to producing food in the UK that you wouldn’t face in some other countries. (To be equally fair they will have costs we don’t have). If, on top of these standards, we introduce farm assurance schemes with higher standards there will be more cost. There will be the costs of running the schemes and all these costs fall on the farmer members. There will also be the costs of meeting these standards. This is entirely acceptable if there is a premium being paid to cover these costs. The problem is, if you have a universal scheme that aims to cover all UK farmers, there cannot be a premium because everything is produced to that standard and that standard is the norm. The danger is that the scheme becomes a protection racket, ‘If you don’t hand over the money you won’t sell in this mart’.

Now the universal scheme covering all UK farmers would work, but only if buyers valued it. But we see grain buyers buying farm assured UK grain and mixing it with imported grain that doesn’t meet UK farm assurance standards. We see manufacturers mixing UK farm assured meat with meat from elsewhere in the world, buying on price rather than quality.

And here is the problem. Actually pushing up farm standards is the easy bit. The important part of the system is getting farmers a premium for the high standard produce. But there will only be a premium if the consumer actually cares about your standards.

And here we run into another problem. I have talked to family and friends who aren’t in farming and have discussed farm assurance schemes. They immediately used to tell me about their experience with introducing British Standard (BS) 5750. Its equivalent in European Standards is EN29000 and in the International Standards Organisation ISO9000. These standards lay down formalised procedures and require documentation but do not as such lead to improved quality of the product. I’ve had no end of people tell me about the ‘work arounds’ and ‘fudges’ that they had to make to ensure that their employers’ systems were fit for BS 5750. One lady mentioned that she, as a very junior employee, was given the job of documenting how they ordered from all their suppliers.

She did the job, the boss was pleased, and they got BS5750. Ten years later she happened to see the file on a shelf and opened it out of interest to see who had updated it. There was her work, pristine and untouched. In those ten years they had changed all their suppliers, but nobody had ever bothered updating the paperwork. But they’re still BS5750.

So just having an ‘assurance scheme’ isn’t going to impress anybody. Most of our consumers are involved in fudging the data for something similar.

So who should the assurance schemes target if cynical consumers aren’t going to be bowled over with them?

The buyers are an obvious first step. But most major retailers would rather set their own scheme up. It allows them to lock in farmers and can be a useful marketing tool. Why would a supermarket want to drop those advantages to join a national scheme ‘everybody’ is part of? They get absolutely no marketing advantages at all.

The crucial point is that with a national scheme all suppliers are part of, the people you are really targeting are your overseas competitors. If we can get them to meet our standards to sell in the UK, then this will put their costs up and make it harder for them to out-compete us. All this needs is a government that bans the import of food products that do not match our standards. To be fair I suspect the ban on all EU pork products other than Swedish is not going to go down well.

Across the board, at the moment, with governments borrowing at unprecedented levels and with unemployment about to increase massively throughout the US, the UK and the EU, this is not a time when governments are going to do anything that raises basic food prices. Electorates are simply not going to put up with it.

Jim Webster farms at the bottom end of South Cumbria. Jim was encouraged to collect together into a book some blog posts he’d written because of their insight into Cumbrian farming and rural life (rain, sheep, quad-bikes and dogs) It’s available here.