NOTE October Unofficial CHANGE OF VENUE

During stardate Wed, 12 Oct 2005 20:53:53 +0100, Mother uttered the imortal words:

Dr Martyn I presume ;0)

Sorry... I'll get me coat.

Lee D

-- Success is going from failure to failure without a loss of enthusiam. Winston Churchill

'76 101 Camper '64 88" IIa V8 Auto '97 Disco ES Auto LPG'd '01 Laguna

So who creams off the other 36p/l then... A 50 or even 100% markup is acceptable but not 300%...

Based on the price of milk in our local Co-op at =A31.22 for 2.27l.

I would agree with that on the whole. I'm not sure to what level you could attribute the compounding of the differentials between UK and continent to CAP, but I would agree that it has done much to reinforce them. However, you could argue that countries on the continent are under the same constraints, we are not alone with high taxes on fuel and high land prices and the like. I would argue that given efficient and correct government support, not necessarily financial, that UK farmers could have been in a lot stronger position. The governments position has appeared appothetic towards industry (not just farming but all types of core industry), even erring on the side of destructive. I think it would be true to say that for the most part the government would rather outsource core materials and manufacturing and concentrate on tourism and service industries. Certainly new regulations being imposed on UK farmers would appear to put more emphasis on making the countryside look ''natural'' and less on promoting food production.

Now there is a eutopia if ever I saw one. Will never happen though because it is not in our governments or any other goverments to allow it to.

In the climate that we find ourselves in the best thing that could happen would be a swing in public support towards british produce. British produce is some of the best in the world and as such people should be prepared to pay a few pence more to support their country and to guarentee high quality. Many will tell you that they would do this, few actually do. Many blame supermarkets, I blame the average consumer since it is they that influence supermarket policy. Unless that changes, the outlook isn't good. I think alot of it comes back to education, many children today have little concept of where their food comes from and have even less interest in finding out. Its sad that the rural and urban communities have been allowed to get so disjointed.We even had a case recently where a farmer was taken to court by a rambler because his cow had crapped on a footpath, honestly where did it go so wrong!

Here Here

It seems as though we are basically arguing the same point and I'd like to appologise for my earlier rant, am so used to having to get on the offensive with a subject such as this.

Graham

Thought about that, the smock was the wrong colour, though...

So you should too... As any of my postgrad students will tell you, it's 'Doc Martyn' ;-)

Its the argument many "urbanites" use. I should love a pound for every time someone has told me that it is streamlining and removing the inefficiencies. In some cases they could have a point, but in the vast majority it is not the case.

I couldn't agree more. The problem is that only a couple of generations ago most people could say they knew a farmer, now very few do. The net result is a divide between rural and urban communities due to a complete lack of basic understanding. This goes as far as people moving into the countryside. Results of this are being seen in new legislation meaning we have to take precausions limiting agricultural smells. We have to limit dust from cultivations and combines. Farms on the edge of dwellings (most) are having noise restrictions placed on them, no tractors before eight or after five. In fact I know of a farmer who was forced by the environmental health to destroy his cockerals cos they exceeded noise recommendations. The world has gone mad!

Not always good to be near customers, see above. I'm lead to believe that NZ farmers do recieve finacial support in a similar way to subsidies, but I'm prepared to stand corrected on that. A pal mentioned it on his return from there.

I think the Eu is closer to the middle than that. I think the economics is so closely tied to the political that you would be hard pressed to seperate them. I don't necessarily agree that the EU is a bad thing, I think it has brought as many benefits as it has problems. Although I dread to think what the impact on the environment of all the paperwork they send out is, no different to our own burocracy though.

:o)

So who creams off the other 36p/l then... A 50 or even 100% markup is acceptable but not 300%...

Based on the price of milk in our local Co-op at £1.22 for 2.27l.

Good question! The processors add approx 10ppl which I would imagine is fair, that just leaves the retailer then... Unfortunately its the same old story all round, take british lamb for example, the farmer recieves on average £2.70/kg (deadweight), the consumer pays between £7.10 and £12.13 depending on cut. Or british beef; the farmer recieves around £2.00/kg (deadweight) and the consumer pays between £6.00 and £18.90/kg (excluding mince). Pork; the farmer receives around £1.50/kg (deadweight) and its retailed for between £4.58 and £8.10. Potatoes I always think are a good example, the farmer recieves between £80 and £170/tonne depending on grade in the supermarket you pay between £266 and £793/tonne!! If you take chips they work out at £1333/tonne.

If you want to make serious money, become a supermarlet!!

Its a good argument for farmers markets, you pay a bit less and get better quality.

The UK gives tax relief on machiney purchase too (capital investment).

So why is farming special? All of the above applies to maufacturing just as much. Did your farmer friend buy British - or did he have an imported

4x4, tractors, other plant etc etc? If not he can hardly complain about not being supported by the UK consumer! That's world economics - if you buy as cheap as you can with no thought of consequences eventually your sector will get it's turn to be on the receiving end - and an applcation form for employment at McDonalds.

Just wait until the Germans buy the London Stock Exchange (they've failed so far, but they will get it) and move it to Berlin/Frankfurt - we will then have no control over our economy at all. In fact we won't have an economy since we no longer make anything.

Richard

Thats not stictly true, you can offset tax against its depreciation but nothing more. The goverment used to give further tax relief but that was done away with in the eighties.

I did actually say that manufacturing is as bad. The major difference is that if you build a car, you don't then ask the consumer what they are willing to pay for that car. You produce a product and that product is then sold at nett plus margin. In farming you grow corn, then phone around and try to get people to buy it, thats a bit over simplistic, but thats basically what happens. The result is that the price of the commodity can be driven down to the point where costs of production are higher than income.

Did your farmer friend buy British - or did he have an imported

There isn't a british tractor, and very little british machinery so you can hardly blame him for not buying british. The last true british tractor went over ten years ago. Ha gone the way of the car industry. Further to that, I would argue that if his costs of production are to be kept low so that he may stay in business, then he must buy the cheapest, where ever that may come from. Thats the basic proble, we can all go on about supporting home grown companies, but inevitably we buy the cheapest in most cases. You could argue that by buying a new landrover you are supporting american business. Ok the jobs are here but the profit goes over the water. Its a similar story.

As for 4x4, he hasn't got one, couldn't justify running one.

That's world economics - if you

I agree, but then traditionally British farmers have bought British or the best they can afford, since it is their livelihood that relies on that input. Hence why Massey ferguson at one point had 98% combine share and 70% tractor share in this country. Since then it has been bought by an American corporation. I think it is overly simplistic and nieve to believe that the enviroment the UK farmer finds himself in is self inflicted.

As for my friends job, he has a degree in agriculture, years of management experience, but because he has only ever worked on his own farm he has no references and so now weorks in a local supermarket for £5.50/hour. I suggest you tell him its his own fault he is there.

And I would say that it is self inflicted. If British cars, eg Rover were any good they would still be around. Its their own fault they are unemployed cos they did a poor job. Oops maybe thats simplistic. Thats my point unless you fully understand the history, you cannot understand how we have arrived where we have.

On or around Thu, 13 Oct 2005 07:47:29 +0000 (UTC), beamendsltd enlightened us thusly:

not sure there *are* credible UK tractor and machinery industries any more.

There are still tax breaks - but they are not automatic - you have to "apply" to get them, so to speak - there was something in the FSB news letter a while back.

I'd disagree - you build a car, it costs so much to make, and you price it based on cost of production and the market sector you are aiming at. You then *hope* it will sell - if it doesn't sell or you have to drop the price to sell it you go bust. That's exactly the same as milk, beef, wheat etc.

Exactly - there were British manuacturers - (collective) we chose not to buy them, so now we can't get them, and the importers jumped in. If we did as the French (for example, but pick almost any country) and made a point of buying our own product we would be in a much better position.

I agree entirely - but then you farmer friend cannot complain when it happens to him. We either decide to help ourselves or not, we cannot set ourselves up as a special case.

I'd say it is neither - the inevitable result of subsidies is collapse, but farmers (and others) were more interested in the short-term rather than the long term - though the Government didn't help.

I have a degree in Computer Science, and worked in (mostly) the automotive sector. When BMW bought Rover I saw the writing on the wall and found something else to do (which I'm not actually complaining about).

I'll quite happily tell your friend it's his own fault, after he's appologised to all the ex MF, Lucas, Rover, Rists, Carbodies, Kenwood (the mixer people), Marconi, British Steel, Alcan, Ferranti, GEC, etc etc for not supporting them!

So you are saying syaing *some* people can have their cake and eat it - like the bloke who led the second (the one a couple years ago that was filmed for TV) fuel blockade who was banging on about supporting British farmers while driving his....... Land Cruiser.

Richard

On or around Thu, 13 Oct 2005 13:02:23 +0000 (UTC), beamendsltd enlightened us thusly:

Not exactly. to be a parallel with farming, you build a car and then the dealer tells you how much he's prepared to pay for it, and if that's less than it cost to make it, tough. AIUI.

I still 90% confident that isn't the case, but I can't find the details so I'll have to let that one go. But put it this way, I have sold a fair bit of kit and none of the farmers I have sold to have got tax relief on it. I suspect you would find that there are a number of criteria that aren't easily met if indeed it exists.

Rubbish, see Austins point he's spot on.

The french whose top three selling tractors are 2 american and one german., who import more machinery than most other eu countries, real patriotic of them. Are you trying to tell me that if the only native product was say roll royce you would but one. Its absolute noncence, it is pure market forces, the market buys what it percieves to be the most cost effective product for their end means, to do anything otherwise is just poor business. It goes for every country. If any other was the case then the worlds number one selling tractor would not be german/american.

I would care to bet a large sum of money to say that you do not buy British when its available, cheeses, wine, electricals and so on, they are all produced in this country.

So you mean to tell me that if you are a manager of big business you would reduce your profits and buy home grown or maximise them and buy cheap and sell high. Its basic economics, if my friend had bought everything he ever has from a british supplier he would have gone bust years ago, what would the sense in that be. You would call him a poor manager for not managing his costs. Your argument is fundamentally floored. If everyone bough everything from within their own country then all well and good, but yours and everyone elses businesses would flounder the EU would not exist, imports would fall by 80%, technological advances would be put back 20 years, its just nonsence.

I suggest you read up on the history of subsidies. They were introduced after the war to ensure britain never went hungry again. They were given to the already surviving farmer who was told to produce more. Indeed during the war if farmers were not increasing there production by a pre-determined amount then their farm was taken from them by the government and handed to someone better placed to do so. Net result is that farmers responded by producing more. If you are given the choice, mow this lawn for £5 or mow it twice for £40 what are you going to do, you would be an idiot to do the former. You cannot blame the farmer for taking advantage of opportunities that arose, its good business practice. It is the poor fore planning of the government of the day that has lead to todays problems largely.

Whats your point? He should have found something else to do? What do you suggest, he has spent all his life on a farm, its all he knows, tell me his options? Your alternative was no doubt something along similar lines as before.

So if he had bought all the above how would that have made any difference? Lets take one of the above, MF. They were market leader in the UK, but they started building poor tractors (got complacent), to the point where they would cost a third more to run than the competition. Many stuck with them until they were twice as expensive to run. Those that continued to stand by them found that the dealer network was collapsing because they could not sell the numbers they had. Suddenly they had to travel three times the distance for spares, so more people looked else where. The end result was that the factory in Coventry was running at less than half capacity and was verging on bankrupcy. This was until an american company bought the failing company. They shut the factory and moved production to the sister factory in france which was also at half production. Since then they have pumped billions into it and it is slowly climbing the ladder again. You are telling me that is the farmers fault for not buying MF. It is basic business management. The same can be said of Rover, and several of the other companies. If they had produced a good quality product they would still be around cos people would buy them. Both me and my partner have Rovers, they are awful and have been two of the most poorly built cars I have ever had. I have little sypathy I'm afraid it comes down simply to this, the Germans, Japanese and so on build a better car.

What I was saying and you completely missed the point was that it is very easy to draw conclusions with half the facts. Can you suggets a British new

4wd he could buy? An american disco3 perhaps, A new defender thats coming out with a transit engine (american again). One of my customers drives a Disco2, its due to be replaced soon. I asked him if he would get another, he said "no, the thing has been unreliable, the dealer back up is rubbish, and I think the build quality is poor, I'm going to buy something japanese" I don't necessarily agree with him but his point is clear.

Your whole case is one point, the problem with everything in this country is people who don't buy British. Its nonsense. If you can hand on heart say you always buy british if it is available then I have a lot of respect because you must truely be a rare breed.

My point is that it is the misinformed that is wrong with this country. If everyone made a point of getting the facts before they made presumptions about things, not just farmers but all things, then the world would be a lot better place. You have not asked me about the situation in either the industry or my friends case, you have presumed that you are aware of the whole story and as such are in a position to cast aspertions on others. You have stated out your case for flogging British farmers, denoucing my friends abilty based on the small amout of information you have available.

What exactly is your point about the British farming industry? How is telling me its their own fault in any way constructive? Perhaps you should take your own advice and be supporting them and me before the same happens to you?

Spot on, thanks Austin

But the dealer sells it for what he thinks the market will stand.

Steve

The manufacturer makes it adds a bit and sells it to the dealer. The dealer adds his margin and sells it to the customer. It is what the market will stand, but is at the same time a factor of what it cost to make, as it is with all the other cars in that market.

if this were farming...

the farmer produces a "car" of the type which he thinks will sell. He then approaches the dealer who calculates what his margin will be and what the market will stand, then gives the farmer this price. This price however maybe less than the cost of producing the "car", but because all markets open to the farmer operate in the same way he is left without a choice. The amount the market will stand is unrealistically low due to this historic way of trading. It is the reason prices keep falling in shops rather than rising (reletively speaking).

What needs to happen is all farmers get together and say this is what it costs to produce, this is our profit margin, this is the price we will sell it. Dealer then passes the cost on, as does shop, consumer pays a bit more for quality home grown produce, but at the same time insures its supply and guarentees its quality. It would be nice but it will never happen.

The price of oil is a good example of what is going on. All agricultural inputs have gone up as a result of the increase in oil price, as has been the case in most industries. However, the money the farmer receives is exactly the same as it was last year so he is worse off. In other industries the increase has simply been passed on, and generally speaking the net result is neutral (I admit not in all cases).

Graham

On or around Thu, 13 Oct 2005 21:54:36 +0100, Steve enlightened us thusly:

indeed. However, the final selling price in the analogy would not be related to the manufacture price, it'd reflect a nice fat mark-up on the price the dealer decided he was prepared to pay for it - or rather, the dealer would decided that the market could stand price X and would offer the manufacturer X/2

actually the dealer sells it for what the manufacturer tells the world it costs, minus a discount out of a fairly tight margin (7.5-10%). They get bonuses based on volumes.

I suspect margins are higher on used cars than new ones, and the dealer isn't in control of prices. Most are now competing with "but I can get this price in the next town" or "Google says...".

Which is why servicing is £85 / hour....

Spot on again, its a ludicrous situation really.

Graham