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A Scottish Butchers' Life In A Niche Market

Mar 30, 2008
I am well known for my views on niche marketing and the use of the term Scottish. I firmly believe that the only sustainable way forward for Scottish agriculture is in the production of high class differentiated products, properly marketed and driven by consumer demand. Consumers will only demand our products in the long term if we give them tangible benefits. These may be perceived to accrue from our environment, the way we farm as well as the most important assets; the quality of our products and the integrity of what we sell. Trust backed up by high quality and accurate descriptions are vital to the long-term prosperity of Scottish agriculture.

The trouble is many of us already do this and can see little or no benefit for it. Supermarket buying power, global supplies of agricultural products, loosely described products able to assume the same quality status as the best of our Scottish products and the inability to control imports effectively. Not to mention the lack of a level playing field in terms of overseas production costs, have all been cited as reasons for loosing the premium we feel we deserve for our products. These concerns I think are largely justified as far as individual Scottish farmers are concerned. The problem being that we are often sacrificed for the 'greater good'.

The 'greater good' of course is the relentless Holy Grail of ever-cheaper food, which cannot be continued ad infinitum without creating very real risks to human health. This crusade reduces the profit margins of primary producers and processors to dangerous levels. Without sufficient funds to reinvest or provide adequate returns, you create the very climate that spawned BSE and allowed FMD to spread. If business is starved of profit then the temptation to cut one corner too many, or strip out one vital control becomes extreme. In both BSE and FMD animal feed was the culprit but where could the problem arise next time? The current practice of procurement at the lowest cost available puts Scottish producers without specialist products in an invidious position. In the current situation of global production the UK and Scotland in particular, will rarely be the low cost option. Environmental constraints, health and safety regulations, labour laws, animal welfare standards, all perfectly laudable in their own right will drive up our unit cost of production. In other parts of the world there is often a more relaxed attitude to many of these issues. This of course gives them the ability to lower costs of production without taking into consideration climatic advantage such as year round grazing as found in parts of the Americas and New Zealand. If we could merely subsidise our farmers to cover these extra aspirational costs life would be simple, however this is where trade agreements, state aids and treaties come into play.

The political will to allow third countries the opportunity to trade with us is high and the offset for primary products supplied by third country agriculture is against manufactured goods or services. This means that we cannot protect our agricultural products against imports from such countries. The forum for these negotiations is of course the World Trade Organisation (WTO). Within the EU the principle of freedom of movement of goods prevails. State aids deemed to distort a fair market are prohibited. Negotiations to achieve accurate labelling and prevent substitution essential to Scottish quality products including country of origin labelling are intense and regarded with great suspicion by all except the beneficiary. The government is very active in this sphere but progress is very slow.

All this gives buyers in the UK carte blanche to do as they will. This cannot however all be blamed on evil supermarkets or lax government. Farmers also have a crucial role to play. The co-operative system successful on the continent has largely failed in this country in no small way because farmers have failed to support them. Perhaps a legacy of the auction system where the highest bidder gets the goods has resulted in a lack of commitment by many farmers, always hunting the highest price on the day. The auction system can also dull the requirement to market specific products often acting as a clearing-house for indifferent produce. This is not a criticism of the auction system rather some of the products that auctioneers are presented with. This situation will worsen if auction throughput falls much further especially of finished stock. Similarly the Common Agricultural Policy has stunted innovation and entrepreneurial activity. The contrast between the supported and heavily controlled agricultural sector and the free market shellfish and salmon industries could not be starker, with innovation, unsupported investment and marketing flair much more apparent. Consider the aftermath of FMD amongst those who lost their stock. How many have made significant changes to their farm strategy? Not enough - far too many have merely picked up where they left off, despite a huge change in the agricultural scene over recent years.

To progress, farmers must regain the initiative. To enable us to do what we are best at - farming, progress on Land Management Contracts is vital to free up the ability to use the land to its best advantage and to the best ability of farmers. Decoupling - separating production from subsidy is essential to get farmers off the treadmill of chasing subsidy, and where the same product is worth different prices to different people depending on their subsidy position. Collaboration and co-operation are required to make the best use of our resources both capital and labour. We need to adapt our stubborn culture of independence to include one another, taking advice and professional help more readily, especially with marketing, and to substantially improve our public relations. There is best practice out there. Some producers have been spectacular in their success. Brands such as Orkney Meat are an example to us all. We must empower ourselves again to be able to negotiate with our customers in a meaningful way; we must not always be the takers of whatever is thrown at us. We can help ourselves; we don't always need the Scottish Government to lead us by the nose, do we?
About the Author
Michael Gibson is owner and director of Macbeths Butchers and Edinvale Farm in North East Scotland. He has held positions with the Food Standards Agency and the Macaulay Institute amongst other positions.
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