Sacha wrote:
On 2011-06-02 23:41:36 +0100, "Ian B" said:

Sacha wrote:
On 2011-06-02 22:11:03 +0100, "Ian B"
said:
Bill Grey wrote:
"Ian B" wrote in message
...
Roger Tonkin wrote:
In article ,
says...

Why why WHY do the farmers ALWAYS bleat hard times time and
time again?

Have you ever seen a poor farmer?




There are plenty of them around here, where hill farming of
sheep is the only possibility. Also we know that dairy farmers
get less per lire for their milk than it takes to produce
(unless you run a super farm!).

Then why are they producing it? Something economically wrong
there, isn't there?

at
Ian
Supermarkets provide a ready market for them but dictate the
amount they are going to pay for their produce. One very good
reason why farmers are sometimes desperate.

You can't sell goods for less than your production costs. If farmer
A can't produce milk for price X, and farmer B can, then all that
can happen is farmer A leaves the milk production market. That's
how economic growth occurs, with the better supplier knocking the
inferior supplier out of the market. Which is often unpleasant for
the individuals concerned, but ultimately good for everyone.

The thing is, nobody can "dictate" a price. I can say I'll only pay
£100 for a Ferrari, but I can't make Ferrari sell me one for that
price. Likewise if the supermarkets demand milk at a cheaper price
than it can be produced, they will get no milk, because there won't
be any producers at that price. Any farmer foolish enough to sell
milk at below cost must be
cross-subsidising it from some profitable enterprise, e.g. crops or
sheep or something. He needs to get out of the cow juice business.
He's destroying value in the economy, and in his own bank account.


Ian

'Leaving a market" means the farmer has to sell his cows or have
them put down. For many/most, this is a heart breaking decision so
they soldier on, hoping things will improve. If they do get out
and turn to e.g. beef farming, all that does is widen the door for
the big buyers who dictate the prices to bring in milk from abroad.
When it's our only source of supply as all domestic sources have
gone, do you think it will still be cheap? This applies, of course,
to all our food producers. If you want to be in the hands of giant
chains and foreign producers, this is the right way to go about it.

Sacha, any business failure is heartbreaking. Back in the 70s, my
dad was stupid enough to try to run a (taxi) business under a Labour
government. It failed. So did my parents' marriage. Our home was
taken by the bank. I ended up in a borassically skint one parent
family. You can't keep propping up businesses on emotive arguments about
doe-eyed cows and sad farmers. snip

I don't know why you use that analogy because I don't. I'm talking
hard business. If we see all our farmers go out of business because
supermarkets are forcing down the price to the farmer, then we'll be
the long-term users. It has nothing to do with doe-eyed cows. But as
for the farmers, it is a heart-breaking decision. All the farmers I
know would tell you it's a way of life, not just a job, 9-5. Frankly,
I don'tk now why anyone would want to do it for so little reward in
the end.

It's not just "hard business" when we start into the heart-breaking way of
life stuff. It was heartbreaking when my dad's business failed. It's going
to be heartbreaking if mine does, and things are dicey at the moment but,
like those farmers, I'm soldiering on in the hope of improvement.

But you can't expect a business to be propped up if it's not competitive.
And what we seem to be down to here is that these farmers just aren't
competitive. Somebody is producing cheap milk, and it isn't them. They're in
a business selling a fungible product at wholesale, and that's always been
dicey and always will be. One pint of milk is much like another. It all ends
up in a tanker heading off to the bottling plant. All that matters is the
price. And industries like that tend to end up with a few large players over
time, because of their economies of scale.

Take your business; you're in retail. You can build up customer
relationships. You can compete on product quality. You can compete on
service. You can get loyal customers who care about more than price. None of
that can really apply to milk. EIther you can grow cows as cheap as the next
guy, or you can't.

The fact that a guy wants with all his heart to be a dairy farmer, because
his dad was, and his grandad, that just doesn't matter to the ultimate end
buyer in Sainsburys. As the market seeks out the cheapest suppliers,
Sainsburys woman gets cheaper milk, and that's all she's going to care
about. If these people go out of business, we're all long-term winners, not
long-term losers. It's why economic growth happens, and we can all afford to
spend money on fripperies like our gardens; because over the centuries,
millions of people lost their businesses and jobs. It's harsh, but better
than the alternatives by far.


Ian