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Free Market or Controlled Market?

Free Market or Controlled Market?

Recent reaction against market play in the dairy, lamb and other sectors has raised some complex but interesting questions. We’ve just come through lengthy debates and a general election where the call for more open markets, less “red tape” and reduced influence by the EU has prevailed with a sweeping Tory triumph in Cornwall and the South West. At the same time the removal of quotas in milk production seemed to cause no particular concern notwithstanding a declared build up in capacity within Ireland.

Now, in but a short space of time, the National Beef Association (NBA) – among other industry organisations – is calling for industry wide regulation and, at the core, price controls over food production. “It cannot be one section of the supply chain that retains all the profits, we need to re-­evaluate the current system and find one that benefits all parties” says NBA CEO Chris Mallon.

On the other hand the supermarket sector has been the dominant drag on the top 350 UK companies this year with £10.7 billion wiped off food retail profits in the quarter up to March. So is the farming industry right to target the supermarkets as “the enemy”? Should the real target be consumerism whereby price governs all decisions with environment, seasonality, food security and other concerns – even health – merely marketing aids? If we want to stabilise and preserve home production should we revisit notions of protectionism?

Gestures such as voluntary extra pence on milk “for the farmers” may be doing more harm than good as they sweep the real issues under the carpet for another day. In the medium term are producers’ interests better served by differentiating products coupled with stronger marketing? By supplying into a generic product market – “milk”, “chicken”, “potatoes” – do we devalue our product by making it commonplace and losing its unique selling point?

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