As an objective supporter of UK agriculture and horticulture and an industry leader, AHDB has views on industry issues and current and future developments. Our blog features updates and commentary from senior figures at AHDB on industry-wide talking points, ranging from exports to education, climate change to innovation, soils to sustainable production. The blog also offers an insight into how AHDB is tackling these key issues.
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Thursday 22 December 2016
Futures markets are often held up as a silver bullet to dealing with volatility, but to my mind are a classic example of “a little bit of information being a dangerous thing”. The AMTF have covered off a good many issues sitting behind the role of futures markets and in summary this is how I see a couple of the challenges:
Main AMTF recommendations on Futures and other derivative instruments:
“Require/encourage Member States to make funding available under their rural development programmes for practical training for farmers/cooperatives on how to use futures.”
“Initiate and facilitate cultural change by rolling out information and promotion campaigns that aim to level-headedly provide information about futures (counteracting the simplistic tendency to see futures as a complex financial tool benefitting mainly speculators).”
“Provide technical advice concerning the risks that too restrictive financial regulation and regulatory technical standards can have on the prospects and viability of futures markets. Futures market cannot exist without speculators, investors and financial intermediaries who can offer market access at reasonably low thresholds of cost and administrative burden. It is important to bring actors together and to share best practices.”
“Encourage commodity exchanges to put in place market maker programmes so as to stimulate liquidity in the early days of a new futures contract. Require/encourage Member States to mobilise funding for designing new futures markets meeting the needs of stakeholders.”
“Promote the setting-up of credit or guarantee funds in Member States to facilitate access to futures for farmers/cooperatives which would experience difficulties in covering the margin calls (for example through a pool funded via financial instruments supported through rural development programmes).”
“Ensure that price monitoring systems promote the identification and timely dissemination of representative market spot prices for given products which can be used as reliable and accurate reference values that cash-settled futures contracts can incorporate (these systems should include proper procedures for verifying and guaranteeing the robustness of the underlying data).
“Develop and ‘spread the word’ about specifications for the main products that should benefit from the existence of viable futures markets (for example an EU standard for certain types of cheeses could help to develop cheese futures).”
“Assess the impact of public intervention in markets on the perceived integrity of a given agricultural market. Sudden changes in public policy may have a detrimental effect on the development of a futures market. A stable policy environment favours commodity exchanges' provision of new contracts.”
Putting futures markets into context
Just like many of the other areas concerned, futures markets is a massive topic and their role in managing risk in agriculture varies by product. As such, we must avoid using the tools as a one size fits all approach.
Many of the issues raised, in fact rely on having a functioning and transparent free market beneath the futures mechanism, which quickly takes us back to the issue of transparency. So, crack the issue of transparency and viable futures markets are a more likely concept in certain commodities. Then it’s down to the challenge of liquidity.
We must keep in mind that even where futures markets are functioning, i.e. for grains, their role is in helping short-term volatility, i.e. they do little to protect sellers from a more prolonged period of low prices.
Also, let’s keep in mind that futures markets for very good reason are very formal markets and even to the partly informed operator can expose businesses to additional risk, primarily cash flow. As such, these markets come with meaningful regulation that the majority of European farming businesses are going to be unable to fulfil. That said though, access can be indirect via supply chain partners.
As part of AHDB’s volatility work, we’ll be looking to assess more deeply what futures markets can and can’t do for UK agriculture.
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Tuesday 20 December 2016
By its own admission, the AMTF saw risk and its management as a very broad arena, but classified these into the physical risks associated with production and the market risks due to volatility.
In the AMTF report, there was a clear and understandable focus on the CAP as the primary pillar of risk management for agriculture. Whilst this is logical, it does risk setting a dangerous default position that EU agriculture should look to outsource its risk management to the CAP or whatever the post-Brexit UK policy will be.
Arguably, this can also lead to an air of complacency in the industry in that little direct responsibility is taken for risk management. We need to bear in mind that to date, the modern CAP has provided less in the way of direct risk management and more in terms of resilience i.e. direct payments to deal with the impacts of the risk. One could argue that this provides no incentive for proactive risk management on farm and reliance on policy for resilience.
Taking this a step further, if it is clear to the supply chain that farmers’ risk is being underpinned by policy, this very quickly puts a dampener on market-led innovations. Although, for such market-led solutions to perform, far greater trust and confidence in contracts are likely to be key pre-requisites. This of course underpins the importance or the area of contracts and transparency, also covered by the AMTF remit.
Insurance schemes seem to be coming into political fashion now as they are in the US. However, there are some major practical and cost considerations to bear in mind. Earlier this year, we provided a run down on the complexity of the US system and identified what makes it successful.
Main AMTF recommendations on risk management:
“Invest in education, training, knowledge transfer etc., via the mandatory inclusion of advice on farm risk management business strategies in the EU´s Farm Advisory Service scheme.”
“Explore mandatory inclusion by Member States of action promoting on-farm risk management strategies in their rural development programmes.”
“Set up an EU platform including Member States, sectors and other stakeholders allowing the exchange of best practices concerning agricultural risk management.”
“Explore the possibility to use indices (proxies) and other technically and actuarially viable models for calculating losses and reimbursements, possibly managed by sectoral organisations.”
“Analyse whether the thresholds set for crop insurance could be revised to render such insurance more attractive for users.”
“Explore the possibility for EU co-financing of reinsurance schemes.”
“Invest in sound monitoring and evaluation systems (at EU and Member States level) in order to be able to map all relevant data linked to occurrence of risks, yield variations, disease outbreaks etc. for use by private and public entities enabling a matching availability of risk management products in line with actual needs.”
“Explore ways of exchanging information on and harmonising Member States' existing practices of tax averaging (> three years) and similar fiscal measures in favour of agricultural producers.”
“Explore the possibility to shift CAP resources to make it possible to develop and fund a strategic EU risk management policy which should be complementary to and coordinated with Member States´ systems for agricultural risk management and allow Member States the necessary flexibility to address their specific needs.”
“Given the heterogeneity of risk, conditions, and farm structures, it is appropriate to allow Member States flexibility in selecting the instruments (mutual funds or insurance systems) to program the EU's Income Stabilisation Tool. This should facilitate the evolution of current national risk management strategies and apply the same conditions to national aids under national risk management schemes as apply to the EU risk management instruments.”
Key practical considerations & observations:
‘Risk management’ is a very big subject and needs to be broken down into sub categories to be able to strategise solutions, such as:
However, here we have a bit of a stand-off. Essentially with a significant resilience program in place i.e. CAP direct payments, is this preventing desire to explore supply chain or within business solutions? Arguably this could be seen as a little more urgent for the UK than for other member states.
Agriculture is inherently a risky industry and it would be pure ideology to expect all risks to be manageable. To that end, farm businesses will continue to need a level of resilience to embrace unknown and unmanageable risks. Whether that resilience should be delivered privately from within the business; from the supply chain; or from the public purse, is an area for intense debate.
Friday 16 December 2016
Transparency in any market is a huge topic, so it’s important to understand what we mean by it. For me, investment in transparency has to yield value for producers and the supply chain as opposed to ‘nice to know’ information. In relation to the better management of volatility, transparency can help build trust in risk sharing supply chains and help in the development of market-led solutions such as contracts based upon a price formula.
There is more to transparency than purely price with visibility of production, consumption and stock important market signals – something that AHDB stressed in its submission to the AMTF. On the specifics of price though, in one of AHDB’s submissions we stressed the need for specific price data based on a defined specification rather than a broad average price indicator. With this in place, the industry is better able to put market-led solutions in place that relate to the specific commodity in question.
The AMTF appears to have spent some time examining the role of mandatory reporting of data. The US was used as a specific example of where mandatory reporting is used in livestock sectors. This has been in place for almost 20 years and came about to facilitate price discovery for all involved with the market. A key catalyst was the growth of alternative marketing mechanisms such as formula pricing and concentration in the livestock sector.
The role of technology in transparency can’t be underestimated as a driver of efficiency and validation. Agriculture has arguably not kept pace with other industries when it comes to data collection, handling, analysis and dissemination. This element will likely be as important as any mandate on offer.
Main AMTF recommendations on transparency:
“Introduce or enhance mandatory price reporting as a means to increase the transparency of prices especially in the meat, fruit and vegetables and dairy sectors. This should apply in respect of a few priority products and be undertaken in useful intervals.”
“Review and improve the definition and standardisation – and thus the comparability – of the market data it collects.”
“Create a forum for better communication and exchange of information between Member States collecting market data and other food chain observatories. The existing market observatories for the milk and meat sectors are an important development. The collection of data should be modernised and data be made available more quickly.”
“Encourage Member States to modernise data collection by way of harnessing possibilities related to ‘big data’ generated on and off the farm.”
“Continue to focus on the dissemination of market information in readily accessible (internet-based) and user-friendly formats. The market dashboards to be found on DG AGRI´s website are a welcome evolution.”
“Examine whether and how the use of consumption data (especially scanner data) and input prices could be integrated into existing market information systems so as to complement the information that farmers can access.”
“Take appropriate action to help farmers – possibly via their professional organisations – to use the increasing amount of commercially relevant data available.”
In taking these recommendations into consideration. Whether at a UK or EU level, there are a number of practical considerations to consider:-
In the last meeting of the Volatility Forum, we started to explore the role of transparency in improving the ability of the industry to manage volatility. Part of this involved mapping a number of supply chains to identify what additional transparency is needed and why. What became clear was that even identifying where more transparency is needed is not a straight forward task.
We are using some of the initial insights from this pilot work to assess whether wider supply chain mapping would help identify where more transparency would add value.
Wednesday 14 December 2016
Through 2016, the EU’s Agricultural Markets Task Force (AMTF) has been working to identify issues and make recommendations under the remit of ‘Enhancing the position of farmers in the supply chain’. AHDB made a number of submissions to the AMTF.
The final report has been released, it identifies a number of issues and makes recommendations under a number of themes. Many of these themes and work areas chime with some of the early work of the Volatility Forum, which last met back in October with a focus on transparency and putting a culture of risk management at the heart of UK agriculture.
Looking to the future, it will be intriguing to see how the recommendations of the AMTF will help shape the future of the CAP post 2020 and what the UK can take from it to help shape post-Brexit agriculture. A number of issues raised in the final AMTF report will be recognised as challenges in the UK. To that end, this evidence is likely to be key in the formation of policy in the UK and should be seen as a useful resource.
In this series of four blogs, we will cover some of the key areas that complement the theme of volatility. In addition though; trading practices, use of contracts, access to finance and CAP post 2020 are also lengthy topics covered off by the AMTF report.
The output of the AMTF raises a number of recommendations that will likely help shape debate for both the CAP and UK agriculture policy post 2020. Many of the issues raised will be recognised in the UK so this is a useful starting point for the UK.
The ability of agriculture to manage risk, embrace volatility and have access to sufficient resilience are crucial for success. The backdrop is that the CAP has provided a backbone of resilience to UK agriculture for almost a generation. Now though the role of resilience from within the business, from the supply chain or from public policy needs to be debated and evidenced.
Although conceived in a pre-Brexit environment, the role of the Volatility Forum as an industry resource is critical and in line with many of the recommendations from the AMTF report. As an industry resource, the Forum is open to anyone with an interest and ambition to help UK agriculture better manage volatility.
Thursday 15 September 2016
Since joining the EU in 1973, the Common Agricultural Policy (CAP) has shaped UK agriculture, its supply and customer industries. As such, disconnecting from this policy framework and taking domestic responsibility for agriculture is likely to be bigger than any historic CAP reform ? even decoupling and MacSharry.
For the foreseeable future, what this actually all means for the UK grain industry will remain unclear, with speculation likely to lead to a number of blind alleys. Nonetheless, now is the time for preparation, which will enable better management of the risks that arise as more details become clear.
UK agriculture and its supply chains will likely have to ask some fundamental questions surrounding systems and structures that have evolved over the last 43 years. Farm support policy and access to the single market will be key areas for the arable industry to watch. Direct payments offer an important source of resilience to deal with ongoing volatility, survive periods of low price and to finance investment as well as the growing of the crop itself.
Looking ahead, the arable industry could well need to find alternative source of resilience, which could mean a more diverse range of enterprises (farming and non-farming). In addition, industry and individual business competitiveness is also likely to become ever more important in a post-Brexit environment. To that end, now is the time to explore what competiveness actually means on the world stage ? given that this is a huge driver of global trade. Samuel Ferreira Balieiro from Agri Benchmark will introduce this huge area, by looking at key competitors such as Russia, Ukraine and Brazil. Samuel will also start to explore the competitiveness of maize, the world’s dominant feed grain, versus wheat.
At this year’s Grain Market Outlook Conference we won’t be shying away from the Brexit ‘elephant in the room’ with AHDB’s Head of Strategic Insight, David Swales Making sense of the challenge ahead. At the same time we can’t ignore the fact that the global and UK grain markets continue to rumble on.
As always the conference will deliver comprehensive insight into both the grain and oilseed markets. Aside from the Brexit currency impact, there are a number of other factors for the grain markets to consider, including:
Oilseed rape has had a rough time in recent years and as a result the area grown in the UK has continued to fall. In £/t terms oilseed rape feels the biggest impact of currency (compared with other crops), but this will do little to offset the disappointing yields of 2016. Christophe Cogny, Biofuel & Oilseed Market Analyst with Stratégie Grains will outline what lies in store for oilseeds in 2016/17.
All in all, Brexit vagueness adds to the usual uncertainty of the marketplace. Now is not the time to speculate but rather to prepare an industry with resilience and competitiveness via independent insight.
Tuesday 23 August 2016
The idea was borne out of sheer frustration that projects were being duplicated across Europe; organisations found themselves communicating different messages to pig producers and spreading themselves too thinly.
Key questions being asked were:
Ironically, we received the go-ahead to proceed to grant preparation for our EU Pig innovation Group (EU PiG), the very same day Brexit was announced. Despite mixed feelings about Brexit, the group hasn’t wavered in enthusiasm since its set-up several years ago and, despite a set-back with its’ first grant submission last year, we are back on track with a likely start date of 1 October 2016 (pending signature of the grant agreement). The network consists of 19 organisations representing 13 EU Member States.
The network will address all of the above key questions over four years; two topics per year on each of the four themes: health management, welfare, precision production and meat quality. Producers will raise specific topics they would like investigated and, after ranking and prioritising, the core thematic groups will look at the literature, case studies and best practices from across Europe. Economic evaluation will underpin all of this work to ensure advice follows sound economic judgment and dissemination will occur through a number of different routes. Regional groups will identify innovative producers, link them up and have mini competitions.
It’s very much a ground-up initiative and the reason I like it so much is because it's all about knowledge transfer. We will also be trying some innovative technologies to help and link producers together to progress innovative ideas. Most information is available within the networks we have; it’s just a case of connecting people and focusing on fewer things to make it a reality.
Tuesday 2 August 2016
Sheep meat is a primary protein choice for Muslim consumers and presents a huge market to capitalise on. After all, the Muslim community consumes around 20 per cent of all the sheep meat sold in England.
With the UK exporting around 35 per cent of its sheep meat production and Europe’s Muslim population expected to grow from six per cent in 2010 to eight per cent in 2030, there is also major potential in overseas markets.
Religious slaughter, however, remains an emotive subject and one all too often misunderstood, with many believing Halal simply means non-stun slaughter. Halal does not mean non-stun per se. Current regulations regarding the slaughter of livestock expressly permit a derogation for the use of non-stun slaughter for religious rites and are therefore both a regulated and legal practice in England. Additionally, stunned Halal adheres to the same animal welfare standards as products destined for the non-Halal market.
Continued public misunderstanding about the subject prompted us to look into producing an educational video to dispel some of the myths and ensure future debate on the subject is properly informed.
Compiled by our in-house digital team, it illustrates best practice for stun, post-cut stun and non-stun in religious slaughter to increase general understanding among a wider audience and inform debate on the topic. The resulting film is a fantastic piece of work which has been well received within the industry.
Ultimately, any constructive debate on the subject needs to be underpinned by broader knowledge of the subject matter. In producing this film, AHDB has taken a lead in providing transparency and clarity on the subject with a go-to resource for anyone interested in the topic.
The information film can be seen on AHDB Beef & Lamb TV.
Friday 6 May 2016
As you may well have seen in the industry media, Total Income From Farming (TIFF) was down some 29% in 2015 — highlighting just how volatile income is for our farmer levy payers. Despite the jaw dropping headlines, this won’t come as news to the industry who have been battling with volatile prices and costs for a number of years now and has become an extremely challenging fact of life.
The hardest hit are likely to be those that have borrowed money to finance expansion plans. This immediately sets off alarm bells in my mind as volatility looks to be the biggest threat to progressive and ambitious farmers that want to compete on a world stage. Unmanaged, this volatility could well deter even the most optimistic investors — limiting investment and slowing productivity gains.
As a result and buoyed more recently from the results of the levy payer survey, AHDB has embarked on industry leadership in the area. We started back in January by launching the concept of a Volatility Forum — to maintain a long-term focus and knowledge sharing. At the launch we issued a call to action to the industry as we were looking for ambitious and skilled individuals to help us drive this initiative. We had a fantastic response and have now formed the main steering group, chaired by Gwyn Jones — Chair of AHDB Dairy — and some key names from the industry, such as Allan Wilkinson from HSBC. This is all being done on a voluntary basis so we have a huge commitment of in kind to help lead the industry through this issue.
We conveyed the first conference call gathering of the group in mid-April and I was somewhat taken aback by the sheer level of ambition and long-term focus the group had.
In terms of next steps, we are currently finalising our latest submission into the EU’s Agricultural Markets Task Force (AMTF) on the area of futures markets. For a number of years there has been a huge amount of industry rhetoric around the area and using our AMTF submission as a spring-board we have the opportunity to set out the realities. If futures are to become a more useful tool then we’d need to see major culture change across supply chains, policy to act as a catalyst and much more transparent data.
We’ll be bringing the group together again in July and will start looking at some meaty strategic questions, such as:
Finally, many thanks to those of you who have provided constructive feedback — it has been really useful stuff!
Friday 20 November 2015
As the SPot Farm programme grows, head to the dedicated SPot Farm blog for the latest news and updates: strategicpotatofarm.blogspot.co.uk
Strategic Potato Farm (aka SPot) is an all-new initiative for AHDB Potatoes which aims to offer a field-scale demonstration of the latest AHDB-funded, independent, agronomic innovations and 'evidenced best practice' in a commercial farm environment.
The concept is to take a wide range of developments from our (or associated) R&I and implement them with the assistance of a partner grower in a fully commercial situation, where the benefits can be demonstrated to a wide audience.
The project is based on the premise that growers and their advisors appreciate field-based demonstrations, and experience shows that these often result in the best grower feedback received by AHDB Potatoes.
We hope to give growers the confidence they need to try something new by seeing it for themselves, live, in the field.
The first SPot farm is based in Staffordshire, hosted by James Daw and his son Sam. This year (covering the 2015-16 growing season) was year one of what is envisaged to be a three year project.
The SPot farm has been open regularly throughout the season and we have run a range of demonstration activities, including:
So far, the responses from growers have been very encouraging. We’ve had over 4,800 views on the blog, in excess of 400 visitors to the site across the season and interest from all corners of the industry.
Mark Rennie, a grower, said: “If you don’t see it in practice, working, it is difficult to adjust your own stuff, so I think coming down here and seeing how they’ve done it here on a real farm gives you confidence to go home and try the practices yourself.”
Mark Rennie, a grower, said: “If you don’t see it in practice, working, it is difficult to adjust your own stuff, so I think coming down here and seeing how they’ve done it here on a real farm gives you confidence to go home and try the practices yourself.”
“It is good to learn things on the ground practically and see things in front of your eyes in the field rather than ‘death by a Powerpoint’,” said Andrew Wilson, a grower.
Factual, evidence-based advice, information and activity is core to what we do at AHDB Potatoes. At the Strategic Potato Farm we are up scaling the research work we fund to commercial, field-level demonstrations. Based on the feedback we have received we intend to expand the programme into the East and Scotland for the 2016 season. At each SPot farm the areas of work will be determined by the steering group. These areas will change from year to year as the location of the site and issues it raises changes with the rotation.
All of this activity is aimed at helping our levy payers take the latest thinking and industry developments home to their own businesses enterprise. This season, we have been examiningthe latest thinking on soil management and cultivation practices; crop nutrient planning, seed rates, the use of precision, practices to limit in-field greening, irrigation scheduling and managing crop variability and water run-off.
To accompany an array of in-field discussion forums and events, we are producing a suite of technical summary videos as well as a ‘season one overview’ video. The first technical video to be published will be on ’Irrigation scheduling’; look out for news of it on our blog. Our website also is a good place to find out details of our upcoming winter events.
As the SPot farm attendees themselves say, this delivery of technical expertise is important because:
“It’s absolutely vital as a potato grower to stay up to date; if you don’t, you’re going to be out of business, basically,” said grower Alex Godfrey.
"There are fewer and fewer potato growers around year by year, and it is the ones who are at the forefront and are the most advanced growers are the ones who will still be in it in ten, fifteen years’ time.”
The SPot Farm programme continues to grow with up to date news available on the dedicated SPot Farm blog: strategicpotatofarm.blogspot.co.uk
Thursday 8 October 2015
Very few weeks go by without there being something in the media about red meat and health. Often it is positive, but just as often – sometimes the next day – there can be a story giving the opposite message. Whether it is the Mediterranean diet, red meat and cancer, red meat as a source of protein, or red meat and diabetes, the issues seem endless – and the end message to the consumer is confused.
Separating fact from fiction is the challenge and if we, as an industry, do not work hard to ensure the facts are there for people to make informed choices about what they eat, it does nothing to help maintain the meat eating habit which endures still among 97 per cent of the population.
AHDB has a dedicated meat and health programme split into two arms, with Meat Matters focused on consumer messaging, and a dedicated meat and health resource for healthcare professionals and journalists. The aim is to ensure that evidence-based information about red meat and its nutritional benefits are widely available.
We have produced factsheets on a range of issues that cover everything from cancer to diabetes to weight management, protein and minerals. They are all evidence-based, fully referenced with sources for the data, something rarely seen in anti-meat scare stories in the media.
Of course the challenge to us by anti-meat lobbyists is: well, you would say that wouldn’t you? (As would they about non-meat diets.) However, we believe there should be a balanced, properly informed debate on issues around consumption of red meat so people can make their own choices, and our work seeks to provide that balance.
It is always great though when third party advocates champion the importance of red meat in the diet, just as Zanna Van Dijk, a personal trainer and fitness guru with a celebrity client list, did it he Daily Mail last week. She highlighted the importance of red meat as a source of iron to help cut fatigue. This was supported by Dr Carrie Ruxton, a nutritionist and member of the Meat Advisory Panel, which is supported by AHDB red meat divisions.
However, it remains difficult to get clear, evidence-based messaging on red meat out in the mainstream media. This will inevitably lead to more stories in the coming weeks, months and years urging people to cut red meat intake. So here are some key points to remember:
At the end of the day, lean, fresh red meat enjoyed in moderation as part of a balanced diet is something everyone can enjoy, even vegetarians after a few drinks, according to a recent survey, though it suggests they tend to skip the lean and fresh part!
To find out more, check out our Mind the Knowledge Gap report and the paper Red Meat in the Diet.
Wednesday 24 February 2015
The UK food industry feels like a very challenging place to be right now, with seismic changes long and short term. How can organisations compete and win as these changes play out?
Many in our industry will say that life now feels significantly tougher than in the years following 2008. Why is this? Well, there is a huge amount of change that we are all adjusting to.
First there are long term changes in how the nation lives and eats. We have an ageing population, eating out far more than 20 years ago, looking for foods that are quicker to prepare in home, and increasingly health aware.
Then we have recent changes in the Grocery Retail market. Online and convenience store shopping is growing at the expense of bigger supermarkets, but these channels are less profitable, meaning less profit to share in the supply chain. At the same time, Discounters have re-set consumer expectation of value for money. Again, squeezing profit for the industry.
As a result, we are seeing low or no sales growth in grocery retail, especially for the Big 4. And the pressure on the Big 4 is shared by their suppliers, who have become used to annual growth as the norm.
What marks out the organisations that manage to thrive in these choppy waters? Above all, they have agility.
The agility to bring new products to market that chime with the new ways of living and eating.
The agility to find growth in previously less attractive or less obvious channels. This means Foodservice, Discounters, “emerging food” retailers, international.
The agility to do more for less with the Big 4. Providing advice on how to win in categories in the new world. Providing the right solutions for smaller stores and online as well as big stores. Doing all this AND fiercely attacking costs, to help in the battle against the Discounters.
It isn’t easy, but there are organisations staying afloat, and even thriving. Some of them are small – all of them are agile. It’s the old story of following the consumer and shopper, but what is new is the pace of change.
Partner at Insight Traction— www.insight-traction.com
Friday 15 August 2014
Barely a week goes by without there being some story or other in the media about the state of the UK’s public services, often related to the quality of food being served in hospitals, schools and the like.
Successive Governments have recognised the central role that good food plays in the wellbeing and health of those being fed from the public purse. A number of initiatives have been tried but these have tended to fall by the wayside, either as a result of a lack of will on the part of procurement managers to incorporate what is a voluntary scheme into their purchasing or due to pressure from budget holders to always purchase the cheapest option.
But probably the biggest stumbling blocks have been the lack of a clear definition as to what is good food and also there never being an opportunity to prove what could be achieved were there a willingness on the part of all links in the supply chain.
The London 2012 Olympic and Paralympic Games showcased this country to the world and maybe more importantly for levy payers, showcased their produce to the catering industry tasked with the largest peacetime feeding exercise in our history.
London 2012 Food Vision provided a specification and audit process which has now been taken forward by the team at Defra into a new legacy-based set of mandatory standards for food served in Whitehall and central Government Departments, such as the Ministry of Defence and Her Majesty’s Prison Service. Additionally, the standards are open for use by the NHS, school meals and social services, as well as contract caterers providing services for the public sector.
Next month will see the launch of “A Plan for Public Procurement: Food and Catering services.” Many will ask why this new initiative will work where others have failed and how, as a levy payer, might I benefit when in the past this market has been difficult to understand and access.
The plan firstly removes the emphasis from being on the cost of the food purchased and instead, through a balanced scorecard approach, requires procurement managers to attribute weighting to a list of considerations. These are based on ‘Quality and Value’ and sit alongside the food’s specification. They are:
So, with the exception of cost, when set over a 12-month period, all of the other ‘Quality and Value’ requirements are features of the domestic supply chain and many are encompassed by the assurance schemes to which levy payers subscribe, such as Red Tractor, Freedom Food, Organic Farmers & Growers and LEAF. All, therefore, deliver a benefit to the procuring organisation, on which they will be measured and be required to report.
Of course, these requirements are all well and good but if procurement managers simply don’t know where to buy levy payers’ produce they will quickly return to their established supply chains.
The route to the public sector market is either through direct sales or via wholesale distributors and all links in the supply chain are now invited to come together on one supply portal managed by the Cabinet Office and accessed via https://sid4gov.cabinetoffice.gov.uk/gbfood.
There is a will on the part of the Government to deliver better food in the public sector. Procurement managers have been instructed to improve the quality and value of the food they buy and now it is our turn, just as with London 2012, to show that UK Agriculture is a best supply partner for our troops, school children, hospital patients and, yes, our inmates and our civil servants!
Foodservice Sector Manager for AHDB’s Pork division