UK Rapeseeds Profit: Processers Get 15-20%, Farmers 2-3%
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Rapeseed is one of the world’s major oil crops, and of the 70 million tons produced annually, 2.2 million tons is produced in the UK. Bright yellow Rapeseed fields have become a feature of the British countryside only within living memory. It is one of the most common break crops here, taking up 522,000 hectares of farmland in 2017, according to The Department of Environment, Food and Rural Affairs (Defra).
Rapeseed is a high input, high output break crop. In recent decades, it has become an essential crop for intensive arable farmers, as it can provide a good income and goes well in a rotation with wheat, which is often the most profitable cereal crop. UK buys Rapeseeds from Baltic countries mainly. According to AgFlow data, the UK imported 9,858 tons of Rapeseeds from Latvia and 5,250 tons from Lithuania in July – Aug 2023.
Despite this, Rapeseed is not particularly sustainable in how it is often grown. To maximize yields and profitability, farmers generally use high applications of nitrogen fertilizer, some of which is washed into rivers and groundwater by heavy rain. The crop is also highly vulnerable to a large number of pests and diseases, which are generally treated with a range of fungicides and insecticides.
UK Rapeseed Value Chain
Two English oilseed rape farmers and a processor explained how the supply chain works. The average yield is 3.2 tons per hectare, but, as one farmer explains, farms cannot make much money with less than 4 tons per hectare. The farmer is producing 6 tons per hectare on his 3,500 hectares farm, so is well above the average. This suggests that some British farmers are making a loss from Rapeseed production and that it can be financially unsustainable, sometimes even with high inputs of agrochemicals.
One explanation for this could be that some farmers trying to maximize income from wheat are growing rape one year in three instead of only one year in five as recommended. Another reason for falling yields has been the ban on neonicotinoid insecticides due to their harmful impact on pollinating insects and other wildlife. Yet, in a way, these two aspects are linked. If Rapeseed was not grown so frequently in rotations, the evidence suggests that disease and pest damage levels would be lower.
United Oilseeds, a farmers’ cooperative, is the middleman in this farmer’s supply chain. The oilseed farmer explains that the price United Oilseeds pays for his product depends on the world market, and it is his responsibility to decide the best time to sell. He jokes that he often gets it wrong.
United Oilseeds then trades the crop to Archer Daniels Midland (ADM), a multinational oilseed and cereals processor. While the farmer makes about 2-3% profit on the crop, ADM makes around 15-20%. The farmer considers the profits the processors take unreasonable compared to what the producer receives. “We’re forced to take the price offered on the contract by the purchaser, or they will just change supplier,” he explains.
The last stage in the supply chain, the retailer, is so far removed that farmers do not even know if most of their crop goes for oil, animal feed, or biofuel. The farmer realizes that he could be buying a product from the supermarket that contains some of his crop but that there is no way of tracing it.
It is a common concern in agriculture that the power and the profit are concentrated with the retailers, according to a report by the Fairtrade Advocacy Office, Who’s Got the Power? The value of the Rapeseed crop increases as it moves through the chain and becomes the packaged oil on our supermarket shelves.
Through speaking to farmers, it is clear that the supply chain of conventionally produced British Rapeseed oil is neither traceable nor exceptionally environmentally friendly. And there are other problems with the crop, too. Many people claim to be allergic to rape pollen and suffer weeks of unpleasant symptoms every spring when it is in flower.
Other sources: SUSTAINABLE FOOD TRUST
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