NFUS yesterday held a productive meeting with the Scotch Whisky Association (SWA) to discuss a range of issues facing the industry. In particular focus was the need for profitability across all parts of the supply chain.

Whisky stills

The Union has welcomed SWA's continued support for local supply; its Scottish-first policy on sourcing grain is crucial to Scotland's cereals sector. However, NFUS remains concerned that despite profitability at the distilling and retail ends of the market, farmgate prices remain below the cost of production.

Speaking after attending the meeting, NFUS Vice President Bob Howat said:

"Communication throughout the supply chain is absolutely crucial and these kinds of meetings with our customers are even more important following CAP reform. Our growing decisions are based on market signals and prices from this year's harvest have not been good. We now have the lowest cereal area in Scotland for 30 years and poor prices are the cause.

"There is profitability at the distilling end of the trade. Up to a point that works in the interests of farmers as well because we need our customers to be financially sustainable. However, to get security of supply, there must be profitability throughout the chain, which SWA fully recognises."

Also attending the meeting was NFUS Combinable Crops Committee Chairman, David Houghton. He said:

"Improved dialogue builds a better understanding of the pressures that all parts of the supply chain are under. I need buyers to understand that, for example, my fuel costs rocketed by 50% this year and that reducing grain prices make a financially difficult situation even worse. If I am going to keep producing quality cereals, I need a price that reflects the cost of producing them.

"Obviously, communication is a two-way process and, as growers, we need to understand the problems and requirements of our customers in the whisky industry. SWA clearly recognises the pressure at farm level and I am heartened by their continued support for local supply. We just need that translated into sustainable prices and we all have a responsibility to work together towards that."

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