Should consumers regulate the price? (From Gazette & Herald)

Should consumers regulate the price?

9:30am Thursday 12th February 2009

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IS the consumer the most efficient regulator?

This debate has been sparked by Sir Terry Leahy, who is chief executive of Tesco, and who used his platform as principal speaker at the recent City Food Lecture in London’s Guild Hall to spell out his free market thinking.

In his view, everyday in a supermarket is like a general election where consumers vote with their wallets. If consumers wanted cheaper food, then Tesco would provide it and the supply chain, including farmers, would adapt to it, he said.

Now while I do not preach Marxist principles, if there is one thing that I have learned over the last 18 months during the credit crunch, it is that the free market may not always be the most perfect model to protect the citizens of a nation.

Lord Krebs, who is a past chairman of the Food Standards Agency, made his point that following the consumer was a dangerous tactic. “Consumers inherently think short term and their immediate target is cheaper food. Pure consumerism means short-term gains put before long term gains.”

NFU President Peter Kendall, backed this up by promotion of sensible and proportionate regulation as being necessary to safeguard British food production.

I have long argued that we can only be secure as an island nation if we have a reasonable degree of self sufficiency in food production. If we cannot learn from Western Europe being held to ransom by a dispute between Russia and the Ukraine, arguing over the supply of gas through a pipeline, then think of the effects on our country of a blockade on food imports for a month.

So while Sir Terry may argue that his business should not be buried by an avalanche of new paperwork from Whitehall, I do not believe the consumer is the most efficient regulator. Sensible and proportionate regulation is necessary to safe guard British food production, to ensure a fair price to the producer that will allow confidence to plan and invest for the future.

Calculation breakdown

This column has previously reported on the heavy-handed treatment by the Rural Payments Agency of potential overpayments made in the Single Payment claim years 2005, 2006, and/or 2007, where requests for recovery of potential overpayments have been sent out to farmers with no additional information being made available despite requests.

In fact, it has been made clear that such requests for a breakdown of the calculation are likely to result in the farmer’s 2008 payment being held up until the overpayment is agreed or paid.

As a result of ongoing discussions with the Rural Payments Agency involving the Central Association of Agricultural Valuers, their approach to overpayment letters will change following the installation of a “calculation breakdown tool” in their IT system. This is currently being tested and could deliver the calculation information required including details of overpayments this week.

This is subject to delay or change depending on test results.

The Rural Payment Agency claims to maintain a list of calculation breakdown requests, but farmers and landowners affected may wish to check with their relevant case officer at the Rural Payments Agency that they are on this list.

The 2008 entitlement statements are now being sent out with a reminder that to transfer entitlements in time for a claim in the 2009 single payment year, a relevant form must be received by the Rural Payments Agency no later than April 2, 2009.

Snow joke

After heavy snow in Barnsdale, the villagers could account for everybody except Seth Blacklock. Eventually they managed to spot his chimney sticking out of the snow. They gathered up all farmers, the Red Cross, the Mountain Rescue and two St Bernard’s and set off. After three hours in snowdrifts someone got on to Seth’s roof and clambered up to the chimney stack. Drawing breath he shouted down the chimney “is anyone there?” Back came the answer “yes.” “Is that you Seth, Seth Blacklock?” “Yuss, who are you?” “We’re from the Red Cross.” “Well, you can beggar off, I bought a flag at Egton Show last August.”

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