Low prices threaten barley

[Sally Toms]

Scottish farmers say that the future supply of Scottish grain to the whisky industry is under threat because they can’t afford to grow it any more.

They say that unless prices rise many will no longer grow it – and that in turn will highlight the whole debate about whether Scotch should be made with Scottish barley.

David Houghton, member of the National Farmer’s Union Scotland and a cereal farmer from Easter Ross said that drastic action is required.

“On average it costs over £100 to produce a tonne of malting barley, yet farmers’ prices have consistently been £90 a tonne or less,” he said. “Understandably, many farmers are thinking twice about planting the crop. That has major implications.”

The price pressure is not restricted to farmers. The malting industry is suffering from a similar squeeze; two of Scotland’s malting facilities announced their closure in recent months – Muntons in Kirkcaldy and Greencore’s facility in Carnoustie.

The whisky industry’s commitment to Scottish grain has improved dramatically – 90 per cent of barley requirements are sourced from within Scotland.

The issue has also been raised in the Scottish Parliament.

[Gordo]

As I am not a farmer nor a distiller so I am unaware of all aspects of this problem, nor am I a politiction but it appears to have a very simple resolution. If the whisky producers want to stay true to the tradition of making Scotch whisky with Scottish barley, then with proof positive of farmers costs, distillers must pay an equitable price for the barley. Are the distillers trying to force the farmers to not grow the grain, highly unlikely, or are the farmers not being forthright?
Cut the crap and do what is best for all concerned.
Gordo
Calgary, Alberta
Canada

[Crispy Critter]

I have a feeling that the middlemen (grain warehouses and brokers) are the problem. Farmers all over get ridiculously low prices for their crops, but by the time the finished products show up on the shelves, huge markups have been applied.

[Deactivated Member]

I don't really understand this myself, but I know it's a common agricultural problem. I suspect that the statement “On average it costs over £100 to produce a tonne of malting barley, yet farmers’ prices have consistently been £90 a tonne or less” is a simplification of the situation, else the decision not to grow is a no-brainer. How can the market price remain below the cost of production for any length of time? The laws of supply and demand ought to take care of this over the long term, but apparently they do not. Perhaps barley farmers should form some sort of co-op. But if barley from England or elsewhere is cheaper and undercuts Scottish farmers, what recourse is there, other than subsidies? Now we have European legal issues as well as agricultural ones, and it's all beyond my ken.

[bernstein]

The laws of supply and demand ought to take care of this over the long term, but apparently they do not.

That is indeed the grave problem with the European agricultural market - but it's at stake after last weeks shipwreck European summit in Brussels. Tony Blair is not everybody's darling, especially not of the French farmer's...

[bernstein]

And more news in today's The Scotsman:
http://business.scotsman.com/agricultur ... =713852005