As a farmer, Jamie Wyllie is used to getting by on little sleep. His job requires long hours and hard graft. But now he said something else is keeping him up at night – the prospect of the Scottish government introducing price caps for some essential food items. Ministers say that the big supermarket chains will take the financial hit, insisting “bold action” is needed to help households.
But Wyllie’s fear is that the costs will get passed down the production chain, and ultimately come to rest with his family farm which is making “little to no margin as it is”. Wyllie is an office holder in the National Union of Farmers in Scotland, so is in regular contact with fellow farmers. And they’re not the only interested parties who have expressed concerns. Just last week 23 organisations wrote to the first minister to call on him to ditch the policy.
Business groups urge Swinney to scrap ‘ineffective’ food price cap plan Swinney’s 100-day push gives way to bigger battles ahead How much should we be prepared to pay for our food? So what exactly is the Scottish government proposing? They want to see a price cap implemented for up to 50 essential items, such as milk, eggs, cheese and rice. Large supermarkets would be expected to offer at least one variety of these items at a capped cost.
If they sold out of that, they could then be required to offer another similar product at the same price. John Swinney has previously said he has a “public health responsibility” to ensure that people can afford a healthy basket of goods. And he’s well aware that many families are struggling with the basics due to cost of living increases. Beyond the four staple items the first minister has identified, we don’t know what food products he has in mind.
And we don’t know what prices they would potentially be capped at. The policy is currently out for consultation, allowing interested parties to give their views. The idea is that the big supermarkets would be the ones carrying the financial burden of the policy. Speaking on his East Lothian farm, Wyllie said that – in reality – that’s probably not how things will play out.
He fears the big retailers will pass any losses down to producers like him. He said: “I struggle to see how, or why, they would swallow that cost” “They’ll pass it down to us. We see it all the time”. And he worries that when the supply chain dust settles, it will be him that picks up the bill.
“I’m the bottom of the food chain. I can’t pass my costs on to anybody else,” he added. He runs a number of farms, specialising in pigs, sheep and crops for bread and cereal production and his costs have increased in recent years. There’s been a UK government national insurance hike and there’s a looming UK-wide tax on fertiliser that will affect a farm of his size.
On top of this, his energy costs have doubled in recent years, with a standing charge of £1,500 per month before he’s even used a single unit of electricity. Jamie worries that a food price cap could prove to be another burden that “might make producers think twice about what they’re doing”. When asked what he means by that, he points out that farmers have other potential options: from switching to non-food crops, to selling their land so that AI data centres can be built on them. He said that independent farmers are already spread thinly, doing every job from bookkeeping, to HR, to tractor driving.
He said: “Every time other items get thrown in, like this price cap, it does affect you. It does keep you up at night”. On Tuesday, the Scottish government will host a ‘fair food summit’. Business Minister Tom Arthur will meet with organisations representing producers and retailers.
Ministers have made it clear that they want to engage with all those involved in the supply chain, and address any concerns they may have. The invite for this event said that the idea is to “work together to ensure that people across Scotland can afford their weekly shop in a way that works.” But it seems that a number of producers don’t see a way to achieve all the objectives. They seem to think you either cap prices or protect producers. There’s scepticism that both can be done in tandem.
But John Swinney has made it clear that the cost of living remains a top priority for him. And he sounds determined to see the policy become a reality, though there’s speculation that there could be legal hurdles down the line. But he’s not the only politician who has been exploring this area. The UK government has also asked retailers to freeze some prices, though it has stopped short of forcing shops to do so.
Whatever comes out of Tuesday’s summit, ministers are planning to push on with plans for price caps. Within the detail of an impact assessment published by the Scottish government last week there were options being floated that could water it down slightly, including prices still being allowed to rise but tracking below rates of food inflation. When Swinney outlined this policy during May’s Holyrood election campaign, it was definitely one of the most eye-catching proposals on offer from any party. No one could accuse him of not proposing bold ideas to address a key concern that voters have.
But it also could prove to be incredibly complicated to deliver. And ministers will have their work cut out convincing farmers like Wyllie that it can come to fruition without hitting his bottom line.
