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Debate on a Supermarket Ombudsman & Agricultural GVA PDF Print E-mail
Written by Brynle Williams AM   
Wednesday, 24 February 2010 00:00

Welsh Conservatives have brought this debate today to highlight the appalling legacy of Labour Governments, here, and in Westminster, have had on Welsh agriculture, and to set out how a Supermarket Ombudsman, and fairer retailer practices could breath new life into this industry. 

 

I note from the Assembly Government’s amendments that they would prefer to describe this period as one of ‘challenges and opportunities’ – but the facts speak for themselves: 

When Labour came to power in 1997, the GVA for Welsh agriculture was 634 million pounds. 

After ten years that figure had sunk like a stone to just 202 million – a drop of 68 percent. 

 

Members may wish to note that this accounts for three fifths of the total decline across the UK, and in case the attempt is made to blame this on foot and mouth, the majority of this decline took place between 2004 and 2007, when more than half of the GVA was lost. 

 

This is a period that saw nearly half of all Welsh dairy producers leave the industry – some 1600 family businesses, and added to that were 1500 cattle and sheep producers who have also gone. 

 

This isn’t just confined to the agriculture industry. Rural communities, particularly Welsh-speaking ones, have been undermined by the loss of these businesses, and the jobs they support. 

 

I have asked the Minister about these figures, and the appalling legacy she has inherited as Minister. She has argued that it’s due to market forces on the dairy and red meat sectors, and I accept that this does tell part of the story. 

 

However, when major pressures on the industry were:  

Unfair competition from foreign produce, grown to welfare standards that would be illegal in the UK. 

The massive pressure the big retailers brought to bear on producers – that have, for example, pushed farm gate prices of milk lower to under 20p, while the supermarkets’ margin has gone from 6p ten years ago to 16p today. 

And add to this the endless stream of gold-plated EU red-tape and bureaucracy. 

 

All of these problems could have been addressed by Governments here and in Westminster if they had chosen to, and they could have brought real benefit to Welsh producers. 

 

So I don’t believe that those Ministers, who oversaw these ten years of decline, can duck their responsibility by blaming it on market forces. 

 

No-one is saying that a Supermarket Ombudsman would, by itself, be the answer to all the problems the industry has, but the benefits it could bring are substantial, and I hope all Members here would agree with me on this point. 

 

Let me say from the outset, this isn’t about supermarket-bashing, it’s about recognising the fact that some practices used by the big retailers, like retrospective discounting, harm consumers as well as producers in the long term. 

 

There is a wealth of evidence to support this, from the Competition Commission’s own investigation, as well as the work carried out by the Cardiff Business School. 

 

Welsh Conservatives firmly believe in the free market, but we also recognise that the public interest is best served if the food supply chain operates on a fair an equitable basis. 

 

We also recognise that for an Ombudsman to be successful – and for the new Grocery Supply Code of Practice to be enforced – it needs the right powers.  

 

The Conservatives have provided details of how we would deliver this – as a ring-fenced unit within the Office of Fair Trading, and I emphasise that there would be no direct cost to taxpayers – it would be funded by a levy on the big retailers. 

 

We would also impose a cap on the size of the businesses protected by the Ombudsman so the smaller producers benefit, not just the big multinationals. 

 

While Conservatives have clear policies, the Government in Westminster dithers, and instead of implementing an Ombudsman, its response is to issue yet another consultation and delay the process. 

 

The next decade is going to see much greater demand for food across the world, and food security will be firmly in the national interest – a point that even Hilary Benn finally conceded at the Oxford Conference. 

 

If Wales is going to play its part, then there must fair returns now for producers, and I would hope that all Members here would agree that an effective Ombudsman would go a long way to achieving this.

Last Updated on Thursday, 25 February 2010 16:13