Quote:
Originally Posted by Springer5 
Economies of scale, and the global trend towards larger and larger commercial facilities is all well documented. How you hoped to get away with this one is beyond comprehension.
Your argument, if true, would apply to every other form of business that uses energy (eg a big supermarket chain costs more to run in lighting, heating, distribution logistics, warehousing etc, etc than do the smaller shops, post office etc it is competing against. That does not change the fact that those smaller businesses are rapidly being banished to the pages of history. The same applies with farming as with any other business.
I can’t help but wonder if that statement is straight out of the mouth of a farmer himself (or the relative of one !). Farmers have long held the naive belief that their industry is somehow different from any other modern business. I have met many who have given me that impression over the years. Now it seems, even to the point where their energy costs more than everyone else’s.
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Actually, that is not the case, both in farming and other industries. In farming there's been a trend of mid size enterprises merging, or brand new entry of large scale 'super farms'. Small farms have tended to diversify, increase quality and 'downstream' product to add value. These smaller enterprises, if properly managed, have better potential as a going concern in the long term. The Achilles heel for the major supermarkets IS the cost of haulage, and energy, and will inevitably suffer as energy costs rise. Your theory is based on traditional corner shops that have not adapted. A classic example is the corner shop in a village near me which did close, but was re-opened by an Asian family from the north of England. They introduced home delivery, set up a 'web' of suppliers from local farms, introduced new product lines for tourists. They even do a very good all-day-breakfast. I recommend their 'box scheme'. They partake in a co-operative for the supply of food to local schools. It's a niche where the supermarket chains cannot compete.
Farming is a 'different' industry and this is reflected in the Common Agricultural Policy. Originally set up after WW2 in Europe and independently in the UK, it was intended to secure food supply. It prevented starvation post war. It's a myth that somehow this 'subsidises farming'. What it actually does is decrease the price of food at point of sale. Farm incomes are defined below.
Estimates of Farm Incomes in Wales 2009-10
Of course, there is an argument for removing the CAP subsidies completely. However, the main effect of this would be to increase food prices in urban areas. This has been done in New Zealand and it's effect on the farming industry has been quite small, however, the cost of food has rocketed in major cities. Some argue that this is due to the geographical isolation. This may also be true, as such a unilateral measure in Britain would result in an influx of subsidised food from the European mainland. This of course, could be offset by import controls, but this again, would put up the price of food at the point of sale. I actually think (like most farmers in Wales) that the current reforms of CAP towards agri-environment schemes is the correct route. In this way we can (a) enhance and preserve the wild eco-system, (b) minimise food miles, and (c) ensure a continued and reliable source of quality food at a reasonable price to the consumer.
As far as energy costs are concerned, it should be noted that major supermarkets actually on-cost hailage costs into the contract of supply so it's the farmer who actually pays. On farm liquid fuel consumption is not subject to VAT or duty, but it is relatively low consumption in livestock farming but very high in arable, particularly grain farming. Removing what some call 'unfair' energy subsidy would more than double the price of bread and vegitables but have little effect on livestock farming.
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