Outlook for Peas in Britain and Europe

Agricultural Enterprise Studies in England and Wales Economic Report No. 18

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OCCASIONAL PAPERS No. 18

OUTLOOK FOR PEAS IN BRITAIN AND EUROPE

by W. L HINTON

A COMMODITY STUDY

AGRICULTURALIssued ECONOMICS by the UNIT DEPARTMENT OF LAND ECONOMY L MBRIDGE UNIVERSITY

JULY 1973

PRICE £1.00 Post Free V V • V V V `..1 v r ''V

OCCASIONAL PAPERS No. 18

OUTLOOK FOR PEAS IN BRITAIN AND EUROPE

by W. L. HINTON

A COMMODITY STUDY

Issued by the AGRICULTURAL ECONOMICS UNIT DEPARTMENT OF LAND ECONOMY CAMBRIDGE UNIVERSITY

JULY 1973 CONTENTS-

FOREWORD TO THE SERIES FOREWORD 2

SUMMARY IN ENGLISH, FRENCH,AND GERMAN 3

CHAPTER 1 PEAS IN AGRICULTURE AND FOOD MANUFACTURE 6

Introduction The Acreage Grown Location of Production Organisation in Field and Factory The Farms Growing Peas and Scale of Production The Organisation of Pea Growing Contracts for Peas Peas in the Food Industry The Processes of Manufacture Supplies of Peas for Manufacture The Fruit and Vegetable Preservation Industry The Research Services

CHAPTER 2 PEAS IN THE FARM ECONOMY 20

The Economic Survey of Vining Peas The Sample The Farms Cropping Vining Peas The Survey Results Costs and Returns by Type of Production Factors Affecting Profitability Size of Enterprise and Profitability Farm Organisation Group and Individual Enterprise Operational Costs and Labour Requirements Peas for Particular Outlets Canning, Freezing, and Dehydration Yield,Price, and Profit, of Vining Peas _ Market Peas Dried Peas Updated Costs and Returns for Peas for Processing

CHAPTER 3 THE OUTLOOK FOR PEAS IN BRITAIN AND EUROPE 43

The Demand for Peas Supermarkets and Canteens The Demand for Peas in Britain Farm Gate Price and Retail Price The Oncost of Manufacture Peas in Europe France, Western Germany, Belgium, The Netherlands; Italy, the Irish Republic, and Denmark, Sweden Community Regulations for Peas Outlook for Peas in Europe

REFERENCES 57

APPENDIX 58 FOREWORD TO THE SERIES

University departments of Agricultural Economics in England and Wales have for many years under- taken economic studies of crop and livestock enterprises. In this work the departments receive financial and technical support from the Ministry of Agriculture, Fisheries and Food. A recent development is that departments in different regions of the country are now conducting joint studies into those enterprises in which they have a particular. interest. This community of interest is being recognised by issuing enterprise reports in a common series entitled "Agricultural Enterprise Studies in England and Wales", although the publications will continue to be prepared and published by individual departments. Titles of recent publications in this series and the addresses of the University departments are given at the end of this report. FOREWORD

The pea crop (worth over £95 m a year) is the most important vegetable in this country. Before the war, it was a seasonal crop picked in pods and sold fresh to the housewife. Now it- is an industrial crop supporting a substantial industry for canning and freezing. Indeed, frozen peas are largely an English industry. Now that we have joined the E.E.C., the prospects for the industry are good. The English climate is very well suited to the crop and the large arable farms and factories in East Anglia are organised to produce a high quality product at modest price. There are reasonable prospects for export, especially for frozen peas, although as the author points out there may be difficulties in producing a canned pea suitable for the European market. This appears to be the first comprehensive study of the economics of pea production and processing and the author is to be congratulated on his report. The author is indebted to Mr. Jeffrey Ewbank of the Ministry of Agriculture, Fisheries and Food for assisting with data on Europe, and to Embassy officials of Community countries and Sweden. The assistance of members of the industry in Britain is also acknowledged with gratitude. These include Mrs. F. Adburgham, Metal Box Company, Dr. David Arthey, Campden Food Preservation Research Association; John Bundy, Bird's Eye Foods Ltd; N.V. Elvidge, Findus Ltd; the late Harry Hubbard, Hubbard and Phillips Ltd; A.J. Gane, Pea Growers Research Organisation Ltd; Gordon Jopling, Batchelors Foods Ltd; K.I. James, N.F.U. Processed Vegetable Department; and Messrs. Reynolds and Roberts, Ross Foods/Smedley's Ltd. Finally, we should like to thank H.W. Kerr, of Nottingham University and R.A. Giles of Leeds University for their contribution to the survey sample, and the many farmers who gave their willing co-operation. J.A.L. Dench of Reading University provided data on dried peas. At Cambridge, C.W.O. Brooks and W.C. Housden assisted with the field work and the analysis.

Cambridge F.G. Sturrock, 30th June 1973 Director, Agriculture Economics Unit

2 SUMMARY

Pea production and manufacture are important in the extended European Community. This report examines the position of the British industry, the biggest in Europe in relation to that in the rest of the Community, and the likely outlook for the pea industry in the European context. In Britain,peas are grown on a large scale and production is fully mechanised. The manufacturing sector is well structured and overall this industry is economically strong as Britain enters the Common Market. Vining peas, for canning and quick freezing, show little economies of scale in Britain, so big is the scale on which they are grown, 'even bigger than ten years ago. In Britain the whole of vining pea production is arranged by contracts with processors, but contracts for dried peas are not so widespread. Pea contracts are more comprehensive than any other crop contracts in Britain, so much so, that the processor takes over much of the crop management. The farmers concerned are the envy of those who cannot get contracts, so remunerative is the pea crop. In Britain processing of quick frozen peas is located at the coast where fish are also frozen, and the canning factories are inland, close to their supply of fruit and vegetables. Quick freezing, with the exception of "farm" freezers, whose peas are frozen on contract by specialist firms, is on a large scale, and is operated by international Companies as in Europe. The family firm is rare in canning in Britain but small factories are more common in Europe. At the farm level, vining peas are, so far, considerably more profitable than dried peas, while fresh peas are profitable to those few farmers with a large acreage who can manage them and can recruit the gangs of labour necessary for picking. In all cases peas have considerable value as a break crop for cereals, which feature most prominently on the arable farms on which peas are grown. Peas as a raw material represent varying proportions of the cost of the pea product at retail. The proportion is twenty percent for dried peas sold unprocessed, fifteen percent for frozen peas in packets, thirty percent for peas canned, and about fifty percent for fresh peas sold in pods. In Europe, France, with rather more than half the processed vegetable production, and Western Germany, with over a fifth, are the biggest producers. Holland and Belgium each have ten percent, but in Belgium the concentration of production. is higher than in France. Processing is little developed in Italy, but this country, like the Irish Republic, has the greatest potential for development. Trade in peas and other processed vegetables is important between the Six. Germany is the biggest importer and she exports little. France is the biggest exporter followed closely by Belgium and Holland, where the industry is even more export based than in France. Quick frozen peas, important in Britain, are relatively less important on the Continent at present,but they are likely to give rise to a larger market, firstly • in the northern countries, where they are already popular. The traditional processed pea in Europe,however, is the canned pea (petits pois)and this product in its various forms and qualities ,has an established place in the consumer preferences of people in the. different Community countries. The consumption of fresh peas in pods is likely to decline as it has in Britain. Expansion of demand for the processed pea will take place as values of convenience and quality can be afforded by more people in the Community. The rate of this expansion depends on the rising economic prosperity in member countries, the principal point of the Common Market. But future economic growth nationally may well differ from the Community as a whole, which means different levels of purchasing power within the Community states, so that the level of demand in each country may differ. Equally, the supply price of peas will be different from one country to another. While demand may differ for economic reasons,, it is possible that the supply price from member countries may be affected by national policies in conflict with the Common Market philosophy of equal opportunity and competition. This anomaly helped to cause the near destruction of the West German canning industry in the last decade as her neighbouring partners increased their exports. At the same time international Companies are active in Europe and it is clear that efficiency in the distribution sector is as important as efficiency in the production and manufacturing sectors. . As Britain joins Europe, different kinds of peas and pea products are in demand in the various countries. There is a big opportunity for Britain to export frozen peas but her canned pea sector must face more competition from Europe. At the same time the British canning industry must 'vigorously •concCrn itself with exporting to Europe. With an expanding market for peas in the Community it would be wrong for the trade in the next decade to repeat the story of the last. It will be right, however, for member countries to expand their market according to their own genuine competitiveness, which Community minded people so much support.

RESUME

Il n'est pas necessaire ici de souligner l'importance de la production et la fabrication des pois dans la Communaute' Europeenne 61argie, et le but de ce rapport est d'examiner la place qu'y occupe l'industrie Britannique, la plus vaste d'Europe, ainsi que l'avenir de cette industrie. En Grande Bretagne la culture des pois se fait sur une grande echelle et la production en est completement rnecanisee. Le secteur de transformation est bien structure et, dans l'ensemble, on peut dire qu'au moment d'entrer dans le Marche Cbmmun la Grande Bretagne jouit d'une industrie en plein essoi. economique. 3 \ Les economies d'echelles n'entrent que tres peu dans la culture des pois verts sous la forme "Vining peas" pour la transformation (conserves et surgelation) qui sont ultives sur de tres grandes superficies, beaucoup plus etendues qu'il y a dix ans. En Grande Bretagne l'ensemble de la production de pois "Vining" repose sur des contrats avec les industries de transformation mais les contrats pour pois secs ne sont pas aussi courants. Lorsqu'il s'agit de pois les contrats sont plus comprehensifs que ceux concemant n'importe quelle autre recolte si bien que les industriels se chargent de la plus grande partie des operations. La recolte de pois est tres remunerative et les fermiers sous contrat font l'envie de ceux qui n'ont pas reussi a en obtenir un. L'industrie de transformation Britannique des pois surgeles se situe sur les cOtes, ou l'on sureele aussi le poisson, tandis que les industries de conserves se trouvent h l'interieur du pays, 'a proximite de leur approvisionnement de fruits et legumes. A l'exception des installations de congelation situees dans les fermes, oil les pois sont geles sous contrat par des compagnies specialisees, la congelation se fait sur grande echelle et, comme en Europe, est l'oeuvre de compagnies internationales. La societe familiale se specialisant dans la conserverie est rare en Grande Bretagne mais les petites usines sont plus communes en Europe. Pour le fermier, les pois destines t la transformation sont jusqu% present beaucoup plus rentables que les pois secs, tandis que les pois frais en gousse sont surtout rentables pour les quelques fermiers pouvant y consacrer d'importantes superficies et recruter la main d'oeuvre n6cessaire au tamassage. Dans tous les cas les pois representent une importante culture de rotation pour les cereales qui occupent une place de chobc dans les fermes arables oü elles sont cultivees. La valeur des pois en tant que produit brut represente un pourcentage yang de leurs prix de vente: vingt pour cent pour les pois secs vendus tels quels, quinze pour cent les pois surgeles en paquet, trente pour cent pour les pois ei bone et jusqu'a cinquante pour cent les pois frais vendus en gousse. En Europe la France, oh les pois forment plus de la moiti6 de la productiOn totale des legumes transforms, et l'Allemagne, oil la proportion est un cinquieme, sont les plus gros producteurs. Aux Pays-Bas et en Belgique les petits pois representent dans chaque pays dix pour cent de la production totale mais en Belgique la concentration de la production est plus elevee qu'en France. En Italie l'industrie de transformation est peu developpee mais, de meme qu'en Republique d'Irlande, les possibilit4s d'expansion y sont les plus nombreuses. Entre les six pays communautaires le commerce du pois et autres legumes transformes occupe une place importante. C'est l'Allemagne qui importe le plus et elle exporte peu tandis que la France est la plus grande exportatrice, suivie de pres par la Belgique et les Pays-Bas oh l'industrie est encore plus Drientee vers l'exportation qu'elle ne l'est en France. A l'hOure actuelle les pois surgeles,importante en Grande-Bretagne, le sont relativement moms sur le continent mais ils sontsusceptibles de trouver un marche etendu, en commencant par les pays nordiques oh ils sont d6ja .populaires. Toutefois le pois transforme traditionnel en Europe est le pois de conserve (petits pois) qui; de qualite variee et sous des formes diverses, occupe une place bien etablie parmi les preferences des consommateurs du March6 Commun. Ii est h prSvoir qu'une baisse dans la consommation des pois frais en gousse se produira en Europe comme elle s'est produite en Grande Bretagne, accompagnee (Pune demande croissarite de pois transformes aussitiit qu'un niveau de vie plus eleve aura permis a plus de gens dans les pays communautaires d'apprecier les avantages qu'ils presentent du point de vue qualite et commodite. - Cette demande croltra proportionnellement avec la prosperite economique des pays membres, raison d'Otre du Marche Commun. Cependant la future croissance economique de chaque nation peut fort bien differer de la croissance economique de l'ensemble de la communaute: chaque pays ayant un pouvoir d'achat different, le niveau de la demande au sein de la communaute variera suivant le pays. De plus, il peut se faire que le prix d'approvisionnement des pois soit influence par des directives economiques nationales en desaccord avec la philosophie du Marche Commun de chances et concurrence hales pour tous. Cette anomalie, fut en partie responsable de la quasi ruine de l'industrie de conserves de L'Allernagne Federale durant les dix dernieres annees, alors que ses voisins augmentaient leurs exportations. En meme temps des compagnies intemationales sont actives en Europe et il est certain que la competence dans le secteur de la commercialisation et aussi importante que dans les secteurs de production et fabrication. Au moment de son entree dans la Communaute Europeenne, tandis qu'il existe dans les divers pays une demande certaine pour differentes varietes de pois et de produits 'a base de pois, la Grande Bretagne a une bonne occasion d'exporter ses pois surgeles. Elle devra faire face a une concurrence Europeenne accrue dans le domaine des pois de conserve et, en meme temps, essayer de toutes ses forces d'augmenter ses exportations de pois vers l'Europe. Le marche du pois dans les pays communautaires est en pleine expansion et il serail dommage que le commerce repete dans les dix annees a venir l'epopee des dix demieres. Bien stir, il faut aussi souhaiter que les pays membres reussissent a developper leurs marches dans l'esprit de concurrence si cher aux partisans du Marche Commun.

ZUSAMMENFASSUNG

Die Erbsenproduktion und Fabrikation sind wichtig in der erweiterten Europaischen Gemeinschaft. Dieser Bericht priift die Lage der Britischen Industrie, der grossten in Europa, in Bezug auf die in dem iibrigen Teil der Gemeinschaft und die mogliche Aussicht fiir die Erbsen-Industrie in dem Europaischen 4 Gesamtbild. In Grossbritannien werden die Erbsen in einem grossen Umfang angepflanzt, und die Produktion ist ganz mechanisiert. Der verarbeitende Sektor ist gut organisiert und geordnet und im ganzen genommen ist die Industrie bkonomisch stark, jetzt, wo Grossbritannien in den Gemeinsamen Markt eintritt. Das Enthillsen der Erbsen durch Maschinen (fiir Dosen und fur das Schnellfrieren) zeigt wenig Einsparung in dem Umfang in Grossbritannien so gross ist schon der Umfang aiif den sie angepflanzt werden, noch grosser als vor zehn Jahren. In Grossbritannien wird die ganze Produktion von Erbsenenthtilsen durch Maschinen durch Liefervertrage mit Verarbeitern geregelt, aber Liefervertrage fiir getrocknete Erbsen sind nicht so weit verbreitet. Erbsenvertage sind allumfassender als irgend em n anderer Feldfruchtvertrag in Grossbritannien, und das trifft in solchem Masse zu, dass der Verarbeiter viel von der Kontrollarbeit der Feldfrucht tibernimmt. Die betreffenden Bauern sind der Neid derjenigen, die keine VertrNge erhalten, so lohnend ist die Erbsenpflanzung. In Grossbritannien liegt die Verarbeitung zum Schnelleinfrieren der Erbsen an der Kiiste, wo auch Fisch eingefroren wird, und die Konservenfabriken sind im Innern des Landes, nahe .dort, wo das Obst und GemUse wffchst. Mit Ausnahme derjenigen Bauern, deren Erbsen laut einem Vertrag mit einer spezialisierten Firma gefroren werden, werden Erbsen nur durch grosse Firmen — oft internationale Gesellschafteen — gefroren, genau wie auf dem Festland. Die Konservenfabrik als Familienbesitz ist selten in Grossbritannien, aber die kleinen Fabriken sind ilblicher in Europa. Bei den BauemhOfen ist das Enthiilsen der Erbsen durch Maschinen bis jetzt sehr viel ertragreicher als getrocknete Erbsen, wahrend Erbsen in der Hiilse ertragreich sind für jene wenigen Bauern mit einem grossen Ackerland, die damit fertig werden IcOnnen, und die notigen Arbe.itskrafte zum packen anwerben kOnnen. Auf jeden Fall haben die Erbsen einen bedeutenden Wert als Getreidewechselwirtschaft, was eine sehr grosse Rolle auf den Getreidebauernhofen spielt, wo Erbsen auch angepflanzt werden. Erbsen als Rohprodukt stellen verschiedene GrOssen der Kosten der Erbsenprodukte im Kleinhandel dar. Das Verhaltnis ist 20 v.H. fur getrocknete Erbsen, unverarbeitet verkauft, 15 v.H. fiir gefrorene Erbsen in Paketen, 30 v.H. für Erbsen in Konservendosen, und bis zu 50 v.H. für frische Erbsen in der Hulse. In Europa sind Frankreich mit fast mehr als der Halfte der verarbeiteten Gemilseproduktion, und die Bundesrepublik mit 'fiber einem Ftinftel die grossten Produzenten, Holland und Belgien haben jeder 10 v.H., aber in Belgien ist die Konzentration der Produktion grosser als in Frankreich. Wenig entwickelt ist die Verarbeitung in Italien, aber dieses Land hat grosste Potential ftir Entwicklung, wie auch die Irische Republik. Der Handel mit Erbsen und andem bearbeiteten Gemilsen ist wichtig zwischen den 6 Landem. Deutschland ist der grOsste Importeur und es exportiert wenig. Frankreich ist der grosste Exporteur, eng gefolgt von Belgian und Holland, wo die Industrie noch mehr auf den Export engestellt is, als in Frankreich. Schnellgefrorene Erbsen, wichtig in Grossbritannien, sind zur Zeit noch verhaltnismassig weniger wichtig auf dem Kontinent, aber sie konnen wahrscheinlich den Markt beleben, vor allem in den nordlichen Landem, wo sie schon allgemein beliebt sind. Die herkommliche, verarbeitete Erbse in Europa jedoch ist die in Dosen (petits pois) und dieses Produkt in semen verschiedenen Formen und Qualitaten hat einen festen Platz bei den Verbrauchervolieben in den verschiedenen Landem der Gemeinschaft. Der Verbrauch von frischen ist wahrscheinlich im abnehmen, so wie es in Grossbritannien der Fall ist. Die vermehrte Nachfrage nach der verarbeiteten Erbse wird dann steigen, wenn mehr Menschen in der Gemenschaft sich die •Vorteile der Bequemlichkeit und Qualitat leisten konnen. Der Grad dieser Ausdehnung hangt von dem steigenden olconomischen Wohlstand der Mitgliedstaaten, dem wichtigsten Ziel des Gemeinsamen Marktes, ab. Aber das zukiinftige Okonomische nationale Wachstum mag wohl unterschiedlich von der EWG als Ganzem sein, das bedeutet verschiedene Ebenen der Kauflcraft innerhalb der Mitgliedstaaten, so dass die Nachfrage in jedem Land unterschiedlich sein kann. Ebenso wird der Lieferungspreis der Erbsen von einem Land zum anderen verschieden sein. Wahrend die Nachfrage aus bkonomischen Griinden abweichen kann, ist es mdglich, dass der Lieferungspreis von Mitgliedstaaten durch national-politische Griinde beeinflusst werden kann, ganz im Gegensatz zu der EWG-Philosophie — gleiche Moglichkeiten und gleicher Wettbewerb. Diese Anomalle war auch mit die Ursache der fast vollkommenen Vernichtung der westdeutschen Konserven-Industrie in den letzten 10 Jahren, als ihre benachbarten Partner ihre "Exporte vergrosserten. Gleichzeitig waren internationale Gesellschaften in Europa tatig, und es ist Mar, dass die Arbeitsleistung im Verteilungs-Sektor genau so wichtig ist, wie die Arbeitsleistung in der Produktion und der Verarbeitung. Jetzt, wo Grossbritannien sich Europa anschliesst, werden •verschiedene Arttn von Erbsen und Erbsenprodukten in verschiedenen Landern verlangt. Es gibt eine grosse Gelegenheit ftir Grossbritannien gefrorene Erbsen auszuffihren und sein Konserven-Erbsen-Sektor muss mehr Wettbewerb erwarten von Europa. Zur gleichen Zeit muss die Britische Konserven-Industrie sich tatkraftig mit den Exporten nach Europa beschaftigen. Mit einem sich ausdehnenden Markt filr Erbsen in der Gemeinschaft, wurde es falsch sein, fiir den Handel in den .nachsten 10 Jahren die Geschichte der letzten 10 Jahre zu wiederholen. Es wUrde jedoch richtig sein filr Mitgliedlander ihren Markt auszudehnen, ihrem echten Wettbewerbsvermogen gemass, was so sehrvon den Menschen untersttitzt wird, denen an dem Gedeihen der Gemeinschaft liegt.

5 Chapter 1. PEAS.IN AGRICULTURE AND FOOD MANUFACTURE

INTRODUCTION

The peas grown in Britain are of two types, those for harvesting green and those for harvesting dry. Pea production in this country is important. It is worth £.18 million to the farmer and over £95 million at the retail level. Both the area and the value of peas exceed that of any other vegetable, and peas for processing, much the bigger part, show British crop farming at its best in science and management, in which the food industry takes a major share. Britain grows more green peas (for vining or for marketing in their pods) than any other European country except Italy. The area in Germany, Holland and Belgium together is not half that in Britain. Sweden has some 20,00G acres, mainly for quick freezing. Our climate favours green peas. The early moist spring gives good germination, the summer is wet enough to give high yields, and it is not so hot as to dry off the crop and shorten the harvest period. To harvest dry peas a hotter summer is needed than we have in England. For this reason we import dry peas from Washington and Idaho which have such a climate. Peas are an important source of protein and, canned, quick frozen or air dried, they dominate the market for convenience foods. They are moreover, the foundation on which the frozen food industry, was built so successfully in Britain after the War. The basis of vining pea production, and much of the peas harvested dry, is a contract with a processing firm. A contract is necessary because the factory requires an assured supply of raw material of a uniform high standard, so that manufacturing programmes may be co-ordinated. Peas are important to the British farmer not only because they are profitable contracts, but also because they are a good break crop. They fix nitrogen in the soil, and are conveniently harvested ahead of cereals, the major crop on farms growing peas. There is still a market for,peas sold in pods in July and August, but the acreage declines each year. Most peas are now vined for canning and quick freezing (both referred to as "garden peas"), and the rise in demand for these types, on sale throughout the year, is the principal cause of the decline of market peas. Dried peas are sold loose or in packets in the natural state, or canned and sold as "processed peas". Large quantities of dried peas are imported, but Britain is almost self sufficient in green peas. Joining the Common Market could be to the advantage of pea processing in Britain, if housewives in the Community could be induced to buy the British type of pea.

The Acreage Grown Before the last war, we grew nearly 100,000 acres of peas, of which two thirds were sold fresh in pods, and nearly a quarter dry. Vining peas were hardly known. Since then striking changes have occurred (see Figure 1 page 2). Vining peas for canning and freezing are now the chief outlet, dried peas are second, and market peas are a poor third. During the War when protein was short and we had to save imports, dried peas were given a price guarantee. By 1948 the acreage had increased ten fold (to 180,000), showing the effect of price support on an otherwise unpredictable crop. Although control was removed in 1950, dollar restrictions (applied to 1954) maintained the acreage at a high level. Since then dried peas have declined in importance not only because of competition from imports but also because farmers grew vining peas instead. Since 1962 there has been a modest expansion, largely in response to crop research. Market peas have also declined, mainly because growers prefer vining peas. It is the continuous expansion of vining peas since 1950 which gives peas in Britain their particular importance today on the farm,in the factory, and in the home. This upward trend has however been interrupted by over contracting in some seasons (stocks carry over). The unusual set back in 1971 is discussed later. Such disturbances apart, an expanding market for canning and freezing peas, which are valued for quality and convenience, will remain, even if the growth rate is bound to slow down. Today, well over half the peas grown are for vining, a quarter are for drying, and a mere fifteenth are market peas. The Ministry census gives no breakdown for vining peas but they estimate canning as forty percent, quick freezing as fifty one, and air drying as nine percent. Since they gave the same estimate in 1965, this can be only an approximation. A more accurate estimate can be obtained from the survey carried out by the Universities in 1970. This showed two thirds as quick freezing, thirty percent as canning and only three percent as air drying.

LOCATION OF PRODUCTION

Figure 2 page 8, shows the location of each type of pea. The dry climate of the Eastern Counties and a similar one in Eastern Scotland is well suited to the harvesting of vining peas. The environment of the large arable farm typical of the eastern side of the country is equally necessary. The precise area where vining peas are grown depends fiaturally on the location of the processing factories. They are located 6 on the coast where fish is also frozen and inland where fruit and vegetables are canned. Market peas are more dispersed, but are concentrated in the East Riding of Yorkshire, and to a lesser extent in the Vale of Evesham and the Thames Valley. Market peas are grown near centres of population, where there is a good local demand, and a supply of casual labour for picking. Market peas are now scarce; there are none in Scotland and less than 100 acres in Northern Ireland, where there are no processed peas.

Fig. 1 THE U.K. ACREAGE OF PEAS OF DIFFERENT TYPES 1952-1972 '000 acres 140-

• 120- • •,Peas Harvested Dr • 100- • • • Vining Peas • 80- 041. A • 60-

• 1.0

20- Market Peas

0 I g I I 11 II 1 1 • I i 1952 1957 1962 1967 1972

(1936-38 8,529 for vining, 19,160 for drying, and 57,639 for market) Source. Ministry of Agriculture, Fisheries and Food Statistics

The doubling of vining peas in the last ten years has reduced the predominance of the Eastern Counties where half the crop was grown ten years ago. Now there is less than forty percent. The East Midlands has doubled its proportion in the last ten years, to thirty five percent, and that of the Leeds Region has been nearly trebled, to fourteen percent. The change is due to new developments" by the processing companies, particularly in Lincolnshire and Yorkshire, as they have been obliged to look beyond East Anglia for greater supplies. The location of market peas (never so concentrated) in England, has remained similar over the last ten years, during which time the acreage has fallen by two thirds. In contrast to vining peas, in this time when the national acreage rose by a quarter, the Eastern Region has maintained dominant position for dried peas and has the same proportion (nearly three quarters) now as then. The dried pea acreages in the East Midlands (fifteen percent ten years ago) has fallen by a quarter and that in the Leeds area (now four percent) has halved. In both these regions vining peas have taken the place of dried peas. These shifts in location of dried peas are in accord with the requirements of the crop and they contribute to its recent recovery in this country. Peas grow best on the loamy soils of the Lincolnshire fens which accounts for the better yields in this area, but the crop does not demand rich soils, though lime deficient ones are unsuitable. Peas grow on many soils, varying from light and sandy to the heavy loams of the Yorkshire and Lincolnshire wolds and the chalk boulder clays of the East Anglian plateau. The location of the 1970 national vining pea survey farms and the processing factories is given on page 9 (Figure 3).

7 Fig. 2. THE LOCATION OF PEA PRODUCTION IN ENGLAND AND WALES 1972

VI NI NG PEAS ( 109 986 acres )

••••

GREEN PEAS FOR MARKET (12 055 acies ) PEAS HARVESTED DRY (53 737 acres)

Source. Agricultural Statistics — England and Wales.

8 Fig. 3. THE DISTRIBUTION OF THE 1970 VINING PEA SAMPLE AND THE FACTORIES

BiUinghat KEY •Sample farms Principal Factories O Canning O Freezing •• 12 Canning & • Hu Freezing Goole. .•• Dehydrating ow4cBrig A • & Canning Doncaster •Wir rimsby • 0 Kirkby • 00,, ethorpes F Contract Sheffield Freezers • •• •• oBardney •••• •.g • • e •• • • oston S • Spalding& Faken ham alsham •La• Lo a tton 0 • .8Wes ick Wisbecho 4) •.•0 Gt. WFKiVnn ••• Yarmouth 0 • • Peterborough • °Thetford • •L westoft

Stratford • •• • Hereford 0 0 •• •

Goldhang8r

oDdcot

Faversha

ast bourne

Source. Agricultural Statistics — England and Wales.

9 ORGANISATION IN FIELD AND FACTORY The Farms Growing Peas and Scale of Production The distribution for each type of pea by farm and crop size for 1971 and 1962 is shown in Figure 4 page 11. This is for England and Wales. In each case, farms with peas are getting larger and the crop is being grown on a bigger scale. Peas, like carrots, are grown on large, highly mechanised arable farms. Farms of over 300 acres grow half the dried peas, and seventy per cent of the vining peas. Well over a third of the vining peas are grown on farms of over a thousand acres. There is now a much greater concentration of vining peas on fewer farms. Ten years ago eighteen hundred farms grew the crop, and now an acreage half as big again is grown on only fifteen hundred. A little under three thousand farms (seven in 1962) grow market peas, and a similar number grow dried peas. Since 1962, the number growing dried peas has almost doubled as the acreage trebled. Market peas are important to the small market gardeners, but in total they grow only a fraction of the crop. Seventy percent of the growers have less than three acres, but account for only ten percent of the crop. Market peas however are of increasing importance on farms. Forty eight large growers with over fifty acres each, grow thirty percent of our market peas, and the twenty five largest, with over seventy acres, grow twenty percent. Three hundred farms with more than fifty acres of dried peas grow over forty percent, but in this case, those with under fifty acres have a larger share than is the case with vining peas. The processors of vining peas prefer to deal with fewer clients with larger units of production because this enables them to have more complete control over their product before the factory stage. Many farmers that grow dried peas however have no contacts and sell through the trade. The revived interest in dried peas reflects the acute need for break crops on arable farms, and farmers with a contract for vining peas are the envy of those with none. Cereals comprise at least half of the income on farms with vining peas and three quarters on farms with dried peas. Pea growers as a group represent a farming elite, with big businesses, well equipped to apply new technology and to meet competitively the exacting demands of the food industry.

The Organisation of Pea Growing Vining pea growing is noted for its expensive specialist equipment. A viner costs some £10,000 and will harvest 250 acres. The farmers have taken full advantage of government grants for investment in machinery in recent years. These have encouraged the transition from static to mobile viners, which, by speeding up the harvesting, enabled farmers to deliver cluickly to the factory.(Once vined, the pea deterior- ates rapidly). In a way such grants were a bonus to the farmers and to the food manufacturers. With a rising market, the adjustment would have been made in any case. The Horticultural Improvement Scheme(1964) gave grants of one third for working capital, and the Council for Horticultural and Agricultural Cooperation (1967) took over when the HIS provisions were extended to cover producer groups. In Britain twenty eight groups (from two to thirty farms, but normally three or four) were formed before October, 1967, and since then, thirty four under the Council. Grants to producer groups sponsored by the Council, about two thirds of total since 1964, amount to £548,000, or more than one fifth of all aid for cooperation. This puts the total farm investment in vining peas in Britain at upwards of £3 million at present prices, or a fifth of the annual output. By the time grants were cut in April 1971, equipment on the farms had been brought up to date. There are no producer groups for dried peas where investment is considerably less. Dried peas are harvested with the same combine as cereals. In the Universities survey of vining peas, seventy percent of the farmers with sixty percent of the acreage are members of vining groups. Formally a group is either a Limited Company or an Industrial and Provident Society with exemption from certain provisions under the Restrictive Trade Practices Act. The group secretary (who is usually a farmer member) makes annual contracts with the processor for growing an agreed acreage, and investment in equipment is guaranteed by the processor(s) for five years. Groups have an internal marketing agreement through which members contract all peas grown by them for a number of years. The organisation is truly co-operative in that a member may provide men and equipment for the group and be paid for this service. The processor pays for peas within a week of so of delivery, but because of the delay in settling some items, the group usually pays advances to its members. At the end of the season, the group produces a financial statement which shows receipts from the processor(s) and the cost incurred by the group for harvesting. A few processors insist on pooling payments on an acreage basis, irrespective of the quality of peas from any particular farm. For the factory pooling has definite advantages as drilling programmes can be simplified. Pooling is not common because farmers believe results vary with soil type. Another disadvantage is that as the crops cannot all be cut at the optimum stage and in the best weather, some farmers are penalised. Details of group arrangements vary, for instance, vining equipment may be owned by the processing company. Some groups, more distant from the factory, clean and cool peas before despatch. Once in the cool system they are preserved fresh, but most freezing companies now take direct delivery as cooling causes skin damage. Canning peas are more frequently cooled and transport- ed in refrigerated vehicles. For instance, in Scotland, where nearly eighty percent of the acreage is grown by 10 Fig. 4. THE ACREAGE DISTRIBUTION OF PEAS IN ENGLAND AND WALES

Farm size - acres Crop size - acres

• VINING PEAS Percent Percent 50- 50

40- 40 1971 30 1962 30- • I • • • • 1• • • . 20- 20 • _

10. • 10 •1962_ - 0 I <50 50to 100to 150to 300to 500to 1000 100 150 300 500 1000 &over

MARKET PEAS 40- 40 •A 30. 30- • 1962 •/ '•1962 20- 20-

10. _ — 1971 10-

PEAS HARVESTED DRY

50- 50 — ••

40- 40 -

30- 30- • 20 - 20 - • • • • • 10 - 1971 10- 1971 • 1962

0 1 0 I <20 20to 50to 100to 150to 300to 500 <5 5to 10to 20to 50to 70to 100 50 100 150 300 500 &over 10 20 50 70 100 &over

Source. Agricultural Statistics — England and Wales.

11 six groups, part of the crop is sent to canneries in the East of England. Two groups and two farm companies in Lincolnshire and Yorkshire and several groups in Scotland process their own peas for freezing. In Scotland 4476 acres (1972) of vining peas are grown, 45 acres per farm compared with 72 in England and Wales.

Contracts for Peas - • The exacting link between farm and factory and in the inherent economic aspects are most clearly shown by reference to the contracts drawn up by the processors for the supply of peas. To them, peas are a perishable and expensive raw material, susceptible to loss, which must comply with absolute standards. Nothing is left to chance and the farmer's responsibilities, rewards, and penalties for default are precise. Contracts for processing (illustrated by those of the major companies concerned) are so crucial to the economics of the pea crop that they deserve more than cursory attention. Contracts for vining equipment run for five years, renewable on an annual basis. If in this time the processor ceases to take peas it pays the outstanding balance on the depreciated equipment. In the season the farmer (or group) must give priority in the use of equipment to the processor. The maintenance of machinery and efficient working of the vining operation is the responsibility of the farmers and he must comply with the Company's plan for vining hours. Plant is cleaned to Company requirements and it may be inspected at any time: Arrangements are made for vining payments and for by-passing a given acreage. .

Green Peas for Quick Freezing , Let us take first the contract for Cultivation and Purchase of Green Peas for quick freezing. The acreage to be grown (by the individual farmer or group) and ,the field sown (with innoculated seed supplied by the company) is specified, leaving a company option to increase the acreage. The charge for the seed is deducted from the purchase of green peas, and if the crop fails, the farmer pays. Cultivations are prescribed by the Company and the factory fieldsman has right of entry to inspect the crop at any stage. Rotation restrictions *require a three year gap between leguminous crops, and a seven year period free of certain diseases. Sowing(on suitable land) is scheduled to a timetable on company instruction. This is referred to as the essence' of the contract. If the farmer claims that sowing has been delayed by bad weather after the Company has advised it, a second date is given. If the farmer does not then comply, the contract is terminated and the grower returns the seed, having no claim for the cost of cultivations or loss of profit. The importance of sowing to a fixed programme stems from the factory need of an even supply spread over as many weeks as possible (usually five or six) to ensure efficient use of the plant. Successive drilling dates are determined by the heat unit system to fit in with harvesting, and varieties with different growth periods are integrated into the pattern. Crops drilled late by design earn a premium price because of their lower yields. The crop (or part) may be rejected while growing if likely to be unsuitable for freezing, due to pests, disease, excessive weeds or waterlogging. Such a crop remains the property of the grower,who has no claim for costs or loss of profit. Harvesting dates and times, also considered the essence of the contract, are given by the Company following tests as the peas approach maturity. Cutting continues on Company instruction and the grower must keep different varieties and plantings separate. The date of cutting depends on a combination of crop weight and optimum quality. The quality is measured by a tenderometer (rather like a nut cracker) which electrically assesses the tenderness of the peas, and the price depends on the reading on the scale. It is also measured by the "biological curve", developed by Findus in Sweden, which relies on leaf and pod count and size. If the farmer fails to harvest the crop for any reason this is a breach of contract. The Company•however may intervene and carry out the harvest. If on the other hand the Company is unable to deal with the volume of supplies arriving, part of the, crop may be left unharvested to mature. It is then purchased for seed or given a reduced price if the apparent yield of green peas is below standard. If the grower transports the crop to the factory, he is paid extra but he must deliver within 90 minutes of vining otherwise the peas may not be accepted. Arrangements for labour and equipment supplied by either party have an understood basis of payment.

Green Peas for Canning As with peas for freezing, those for canning are planted on instructions from the processor, with dressed and warranted seed supplied by the Company to whom the farmer undertakes to sell the entire crop. Sowing must be on suitable land uncropped by legumes for three years, and be cultivated in accord- ance with good husbandry. The rotation restriction is intended to prevent pea root eelworm and browning virus. Good husbandry 'includes spraying and the removal of noxious weeds. Spraying may only be done with Company approval and infringement may cancel the .contract, but the farmer is still expected to pay for seed supplied. Planting dates are considered to be the essence of the contract and they can be varied 12 only on Company instructions. If the weather delays planting and the Company considers that the crop would be too late for canning, the planting may be cancelled, in which case the seed-is returned with no claim for costs or profit. A crop may not be ploughed up or destroyed without prior consent, but the Company is reasonable about this. If at any stage the Company considers a crop unsuitable for canning, or even for seed,there is no obligation to purchase. If so the crop remains the property of the farmer with no claims. The farmer however is bound to plough the crop in,or, if he harvests the crop, the peas must be ground. Under no circumstances may the peas be marketed fresh or sold for seed. Cutting may be done by the farmer to the requirements of the Company who stipulates the cutting dates. These dates are also referred to as the essence of the contract. If the farmer does not deliver the entire crop he is obliged to pay an appropriate price for the deficiency calculated on a standard yield per acre. The Company may harvest with a mobile viner and deliver to the factory, or the fanner may be instructed to deliver the crop to a vining station at his expense. This expense is allowed for in the price. When the crop cannot be taken by the factory it may,if suitable, be kept for seed. If so the Company decides the acreage and stipulates the method of harvesting. The farmer pays for seed cleaning. A stipulated price is paid for seed conforming to required standards of purity, moisture and germination, but seed of lower germination may be purchased at a lower price. Undergrade peas are not acceptable. The. peas have a price according to the tenderorneter reading which overlaps that for freezing peas and extends higher up the scale.(Green peas for canning do not need to be as tender as green peas for freezing.) The price relates to a ton of clean green peas. A separate agreement covers payment for mobile vining and an additional price is paid for static vining. Similar arrangements for vining and vining equipment apply to peas for canning as to peas for quick freezing.

Contracts for Dried Peas

In contracts for dried peas, the criterion is not tenderness (dried peas are harvested mature) but a minimum waste and stain which would make them unsuitable for human consumption and costly to manufacture. The contracts state that the entire production of a given acreage of blue and maple peas of specified varieties will be purchased in a price range related to quality. Only size-graded peas (4.5mm or less) are taken,and dirty, damaged, and discoloured peas are rejected. Disputes in connection with sampling are referred to the London Corn Trade Association. The Company supplies seed with a dressing that may be poisonous, for which the grower takes the risk. Discount is given for immediate payment of the seed,on the sale of the crop. Good husbandry and proper cultivations are obligatory and the Company has the right to inspect, rogue, and prescribe sprays, making control complete. Again, only land free from leguminous crops for three years is elegible. The farmer is told when to thresh,and the peas must be delivered in a dry-keeping marketable condition. If the farmer fails to harvest, the Company may do so and charge for the cost. The crop may be dried on poles, or by high moisture vining, but dessication needs factory approval. The farmer must insure the crop against fire and he needs the Company's consent before ploughing up or destroying a crop. The ownership of the peas passes from the farmer to the Company on their acceptance by the factory. Sampling of the peas is important, an indicative one is taken before delivery, and a more comprehensive one from each consignment. A minimum percentage germination is required. There must be no foreign matter and the percentage of waste and stain in the sample from each delivery is regarded'as typical of the bulk. On these percentages depend the price, and at this point the peas are rejected or accepted. Rejection may be on the grounds of disease, mould (however slight), or excess moisture. The presence of marsh spot, taint, under or over maturity, unsuitable texture or flavour, mixed varieties, or contamination, disqualifies the -peas. If moisture is excessive the Company dries the crop at the grower's expense. In all, the demands on the farmer growing dried peas are just as great if not greater than for vining peas, considering the risks at harvest and their lower profitability. Contracts for peas of each kind are rigid and exacting but the Companies have a reputation for straight dealing not surpassed in British Agriculture. Both parties understand each other and a solid and beneficial association has developed over the years, made possible by the contracts over which no legal dispute has been recorded. A levy is collected in the contract to finance the Pea Growers Research Organisation and both parties contribute an equal amount. The Report on Contract Farming refers to these contracts as the "transferred management" type because as has been seen, a considerable degree of crop management is transferred from the farmer to the processor. The Report advocates tonnage contracts in preference to those based on acreage. Most contracts for vining and dried peas are made on an acreage basis(with a tonnage in mind), and it is doubtful whether the parties would wish to change the acreage basis of contracting. The Report encourages nationally negotiated contracts, but neither party favours one for peas. They are hardly necessary for peas because news about prices under negotiation spreads through the industry and in consequence prices are equal or nearly so. Model contracts and the control of contract terms were also suggested in the Report, but pea contracts in practice are detailed and explicit, and go well beyond any notionally desired model. As to 13 contract terms, the explicit terms in pea contracts, all necessary to produce raw material suitable for processing, may be followed by the farmer or else the contract not taken up. No farmer is obliged to enter into contracts for peas, but normally he stands to benefit when he does so.

PEAS IN THE FOOD INDUSTRY

The Processes of Manufacture Vining peas are preserved by canning, quick freezing, dehydrating with hot air, or accelerated freeze drying, and each process is highly automated. All these processes are designed to stop bacterial decom- position in the fresh pea. In canning, this is done by heat, and the sealing of the can prevents contamination. Peas for quick freezing are normally processed straight from the field but they may be stored for later processing in large blocks at temperatures too low for bacterial activity. Dehydration itself prevents contamination. In all cases the peas are first immersed in water at a high temperature to inactivate the enzymes in the pea and to expel air. For canning, peas are weighed into cans automatically, covered with a solution of sugar and salt, coloured green and mint essence is then added. After sealing, the cans are cooked for 13 minutes at 121°C to sterilise the -contents. Because of this treatment, more mature peas may be used for canning than for freezing. Colouring is added as canning destroys the natural colour. Dried peas (which are not green) are also canned after soaking in the same way as vining peas for canning. Peas for quick freezing are blast frozen, at low temperatures, about —23°C and then stored (if necessary) at —18°C.Peas for dehydration are first pricked to permit rapid dehydration, and then dried in beds. Hot air reduces the pea size, which is not fully recovered when these peas (for example Surprise) are prepared for the table. Accelerated freeze drying is a combination of quick freezing and vacuum drying. These peas retain their original size and rehydrate very quickly. Dried peas are prepared for canning or for selling in the natural state by a series of treatments to bring them to perfection. The treatments eliminate trash, stained peas, and peas holed by pea moth larvae. Dressing costs £.10 to £14 a ton depending on the quality, and up to twenty percent may be discarded and sold to feed livestock. They are first put through a dresser from which only whole peas emerge for further treatment. Then they are centrifuged in a rotating needle machine on which holed peas lodge, and finally they pass through electric eye equipment which discards the stained peas.

Supplies of Peas for Manufacture The supplies of raw peas manufactured in Britain(home grown and imported)from 1962 to 1971 are shown in Table 1. In the nine years to 1971 home produced vining peas increased by fifty percent and frozen peas by a similar amount. In the same period green peas increased by a third. No canned green peas are imported but we import significant quantities of frozen peas. From 1964 to 1969 imports of frozen peas amounted to twenty two percent but in 1970 they declined to thirteen percent of the total supply. Frozen pea imports also vary seasonally with the level of home production. This can fluctuate by as much as fifteen percent above or below the average for a given acreage according to yield variations which are mainly due to the effects of spring and summer weather in each season. In certain years manufacturers are obliged to purchase more heavily from abroad. The low level of imports of frozen peas in 1971 is explained by the recession in the market in that year. In future, home production may supply up to ninety percent of the peas for freezing, but processors are unlikely to want to rely on our supplies entirely because of variations in yield.

14 Table I. SUPPLIES AND MANUFACTURE OF PEAS(AND IMPORTS) 19"62 to 1971 '000 tons , TYPE OF PROCESS 1962 1967 1968 1969 ' 1970 1971 . , CANNING AND FREEZING ,. .

U.K. production of \Fining peas a • 126.3 172.7 165.4 185.0 198.8 188.3 of which: . Frozen Manufacture . . 56.4 66.1 77.8 88.5 89.4 77.7

Canned Green b(=TOTAL) 63.8 90.5 68.3 84.7 104.5 86.1

Imports of "Manufactured" Frozen n.a 22:8 22.1 17.9 . . 13.6 2.2

Total Manufactured Frozen n.a 88.9 • 99.9 106.4 103.0 79.9 _ DRIED PEAS

U.K. production (peas) 25.1 ' 56.1 29.1 51.2 75.0 , ' 62.2

Imports of Dried peas . 86.5 58.7 - 65.5 81.7 64.9 49.3

Total Supplies of Dried Peas 112.2 114.8 94.6 132.9 . 139.9 111.5

Canned "Processed" Manufactureb 188.0 174.0 175.2 192.4 182.4 168.6

Imports of "Processed" Manufactureb 0.7 1.0. 0.9 0.8 0.9 ..0.8 Total Processed Manufactureb 188.7 175.0 176.1 193.2 183.3 169.4 4 . a Shelled weight b Weight of net can contents Source: Campden Food Preservation Research Association. Ministry of Agriculture, Fisheries & Food Statistics. Fruit Intelligence, Commonwealth Secretariat.•

Quantities of vining peas going into manufacture are shown in Table 2 for 1968, 1970, and 1972. On average a third go for canning and two thirds for freezing, other,uses are very small. Most manufacturing is done in the second half of the year which coincides with harvesting.

Table 2. QUANTITIES OF VINING PEAS GOING FOR MANUFACTURE IN BRITAIN ('000 tons Shelled weight)

, I 1968 1970 1972 I Jan Jul Jan Jul Jan Jul to to Total to to Total to to Total Jun Dec Jun Dec Jun Dec - Canning 0.6 46.6 47.2 2.7 69.4 72.1 0.3 77.8 78.1 Canned and Dried Soups 0.4 0.5 0.9 0.5 0.4 0.9 0.5 0.5 0.1 Quick freezing 0.2 89.1 89.2 2.6 100.4 103.0 - 94.8 94.8

TOTAL 1.2 136.2 137.4 5.8 170.2 - 176.0 0.8 173.1 173.9

Air dried and air freeze dried not known. The fresh weight is calculated from product weights collected from manufacturers. Source: Ministry of Agriculture, Fisheries and Food Statistics.

15 Dried peas are mainly imported. In 1964 imports- were two thirds of the supply, but as home• production has doubled recently, only forty four percent of our supplies in 1971 were imported. Small quantities of processed dried peas are imported in the manufactured state. In volume, canned green and processed peas dominate the market. The total production in 1971 was 255,000 tons net can content, whereas the production of frozen peas was 80,000 tons. But for the inflation-induced recession in that year, the quanitity would have been around 100,000 tons. The value of production (U.K. 1971) at retail is canned green peas £15 million, processed peas £20 million, and frozen peas £40 million. Together with fresh (market) peas, £20 million, the total retail value of all peas in Britain (1971)is £95 million. - Sales of canned and frozen peas, and purchases for processing in 1963 and 1968 are shown in Table 3. The sales value at manufacture of all peas was £33 million in 1963 and £41 million in 1968, when canned peas sold for £21 million and frozen peas for £20 million. In 1963 frozen pea sales were two thirds those of canned peas and they were practically equal in 1968. • Imports of peas for freezing in 1968 were twenty eight percent of the total value of green peas manufactured and those of dried peas, twenty percent. Total home grown peas for manufacture in 1968 were purchased for £10.4 million and imports for £5.8 million.

Table 3. SALES AND PURCHASES OF PEAS BY THE PROCESSORS IN 1963 AND 1968

1963 , 1968 - - '000 tons' £m £m ^ _ ' SALES EX MANUFACTURE a i Canned Garden Peas 78.2 8.4 9.0 Canned Processed Peas . 175.8 11.4 , 11.9 ... Total Canned 254.0 19.8 20.9 Frozen Peas 62.9' 13.3 19.7 •Total Canned and Frozen 316.9 33.1 40.6

PURCHASES FOR MANUFACTURE b Green Peas Home grown 5.5 7.5 Imported • • 0.6 2.9 Dried Peas

Home grown 0.4 1.3 , Imported 1.8 2.9 Total Purchases ' 8.3 14.6

a Value only available for 1968 b Quantity not available Source: Report on the Census of Production, 1968 No. 14 Fruit and Vegetable Products.

16 THE FRUIT AND VEGETABLE PRESERVATION INDUSTRY

Preservation by canning is the major process in the fruit and vegetable processing industry, whose sales at the point of manufacture are worth(1968) £309 million. The composition is as follows:-

Value £m Percent

Canned or bottled fruit and vegetables (including canned beans) 54.6, 27.3

Quick frozen fruit and vegetables 37.4 12.1

Preserves 47.6 15.4

All other products (mainly vegetables) 169.5 45.2

309.1 100.0

Source: Report on the Census of Production 1968, No. 14, Fruit and Vegetable Products.

Canning and freezing together account for a third of the gross output of the fruit and vegetable processing industry in Britain. Sixteen percent of the processing firms in this sector are engaged in canning and freezing. The number of canning firms (32 in 1968) is diminishing at a similar rate to that in the industry as a whole due to mergers rather than closures. Freezing firms are conspicuous for their small number and high gross output per firm. The increase in freezing firms is quite remarkable considering that farm freezers have successfully broken into what was generally agreed to be a monopolistic market.Three major freezing companies (internationally grouped) control ninety percent of the market in Britain, and one company, sixty percent. Some processors have a number of factories. In canning, five firms produce eighty percent of the output and two have five or more factories. Canning and freezing companies by no. means confine their manufacturing to peas but achieve greater continuity of production by complementing seasonal products with those regularly available. Frozen fish, for example,is an alternative product for most of the year. The range of their production of processed fruit and vegetables is shown in Table 4. In canning, for instance, the most important product is beans in tomato sauce. These beans are imported throughout the year and they are easily stored to await processing, as are dried peas.

Table 4. CANNING AND FREEZING IN THE FRUIT AND VEGETABLE PROCESSING INDUSTRY .. Grouping All Establishments Canned or Bottled Quick Frozen

1963 1968 1963 1968 1963 1968 Number of Companies 315 261 35 32 7 9 Number of Factories 407 349 49 45 12 16 Gross Outputa (£m) 2643 347.5 575 66.5 20.8 46.0 Gross Output per Company 8390 1331 16428 2078 2971 5111 (£'000) , Net Outputb (4m) 92.1 121.6 17.7 18.3 10.1 18.4 Net Output per employee (4) 1408 2009 1128 1479 1658 2212 Wages or Salaries (£m) 38.5 48.3 8.8 9.0 4.0 . 7.0 Number employed ('000) 65.4 60.6 5.0 5.1 6.1 8.3 Capital Expenditure(£m) 11.1 10.7 1.9 1.1 , 1.7 3.3 a Gross Output is the aggregate value of foods and other work done b Net Output is the value added by the process of production Source. Report on the Census of Production 1968 No. 14 Fruit and Vegetable Products. 17 Table 4 shows the canning and freezing groups in the context of the fruit and vegetable processing industry. The gross output of the industry as a whole (1968) is £347 million. This is equivalent to one percent of the gross domestic product, three percent of manufacturing as a whole,, and five percentof the food industry. The fruit and vegetable processing industry employs(1968) sixty thousand,or eight percent of the total employed in the food industry. Within the fruit and vegetable processing industry, net output per man is highest in freezing, but below average in canning. Capital expenditure in freezing" is heavy but it is the most highly automated. In freezing, investment equals a third of that in the industry as a whole. It's three times more than in canning, which is in line with the rest of the fruit and vegetable processing industry. The freezing group is expanding rapidly and the net output from freezing rose in the five years to 1971 to equal that of canning (from somewhat over half in 1963). The frozen food group is expanding in other vegetables as well as peas (notably brussels sprouts and green beans) as well as in fruit -products and by the present time it will have overtaken canning, which is static or possibly declining in real terms.

Table 5. SALES OF PEAS(PROCESSED) IN RELATION TO THE CANNING AND QUICK FREEZING INDUSTRY 1963, 1968 '000 tons £m - £m

Canned or bottled fruit and . vegetables - . . 454.5 . 43.4 . 546

78.2 8.4. • 9.0 • Green Peas .

Processed Peas (Dried Peas) 175.8 . 11.4 11.9 . . Quick Frozen fruit and vegetables • 96.7 21.8 • 37.4

Peas .. 62.9 13.3 20.4

Other Vegetables 31.8 . 8.1 16.5

All other products 760.7 119.3 169.5

TOTAL 1604.9 228.9 309.1 v Source. Report on the Census of Production 1968 No 14 Fruit and Vegetable Products.

Peas within each of the manufacturing groups are shown in Table 5. Green peas (1968) account for sixteen percent of the sales of the canning group and processed peas twenty two. In freezing, peas(1968) are fifty four percent of the sales of the group, and other vegetables forty four. Peas in frozen vegetables have lost ground. They were sixty one percent in 1963 and fifty four in 1968. Peas, which since 1950 have established the vegetable freezing industry in this country, remain the mainstay as it expands. In future however, they will decline in relative importance, though increasing absolutely.

THE RESEARCH SERVICES

Pea growers and manufacturers are well supported by various research bodies which collaborate on common problems. The Pea Growers Research Organisation is the principal body for field research on peas throughout Britain and is situated near Peterborough. It was formed out of the Home Grown Threshed Peas Joint Committee and was founded on the canning industry. At this time a group of growers, processors, and merchants decided that the value of the pea crop was such that additional and specialised research and advisory services were required. In view of the rapid increase in vining peas, this crop was included in 1956 when the Organisation was formed. In 1963 the work was extended to beans. The objects of the Organisa- tion became the promotion and encouragement of research and education to improve the growing and harvesting of peas and other crops. The Board of Directors comprises six members nominated by the National Farmers' Union and two each by the Fruit and Vegetable Canners Association, the National Association of Frozen Food Producers, and the Pea Pickers' and Pea Packers' Association (dried peas). The -Board represents all major interests equally, from the producers and the trade, and provides specialised and independent research, advisory and extension services on all aspects of production and harvesting for both sides of the industry. The Organisation, which is funded by the Ministry of Agriculture and by levies from manufacturing and farming members, carries out some of the work which Ministry Advisors might otherwise do in advising farmers on growing peas. The Agricultural Development Advisory Service complements 18 • the extension work of the Organisation, especially at the level of the regional science specialists (ento- mology and pathology), and it carries out some research on Experimental Husbandry Stations. The National Institute of Agricultural Botany at Cambridge applies current research findings to commercial production as a service to the industry. New pea varieties are assessed for distinctiveness, uniformity and stability, in connection with official registration of new varieties. The Institute also assesses and compares the agronomic performance of new pea varieties jointly with the Pea Growers' Research Organisa- tion and the Campden Food Preservation Research Association. New varieties are tested in preliminary trials at four centres in the first year, then trials are continued on promising varieties for two years. Throughout the season, field characteristics are recorded, and the yield is assessed at three stages of maturity. Samples of each variety are also canned and frozen for assessment by Campden. Varieties with above average performance are publicised by the Institute. In Scotland the work of the Pea Growers' Research Organisation is complemented by the Scottish Agricultural Research Institute at Invergowrie, and they investigate known or potential problems of the pea crop in Scotland. Much of the work deals with yields and varieties and in extending the processing season, while attention is also being given to work on weed control. The Campden Food Preservation Research Association at Chipping Campden, Gloucestershire, has long been involved with peas for processing and indeed introduced the processed pea to the industry in the 1920's as a means of employment for cannery staff during the months when no fresh raw material was available for canning. Over the years the Research Association has worked on all aspects of pea processing and its various departments have contributed to the quality pack now available to the British consumer. ..• Processing methods have been thoroughly investigated from the type of container used, from processing time to ensure safe products, to Methods of retorting, and problems of cooling cans, to mention only a few aspects. The chemists have not only been involved with artificial colours, but also investigations into factors affecting texture of dried peas. The Agricultural Department has long been concerned with quality in terms of the examination of new varieties. Quality paramaters have been established for canned and frozen products. Today variety trials with peas are carried out on an annual basis in co-operation with the Pea Growing Research Organisation and the National Institute for Agricultural Botany. Biochemists are investigating ways of retaining the natural green colour of peas after processing without the necessity of adding artificial colour and new methods of processing peas are currently under investigation. The Research Association and its staff maintain a very close liaison with all centres of research and particularly with its members, and is, therefore, always aware of current problems with this crop. It is the central processing research station in the United Kingdom for all aspects of the production and processing of peas as well as for all other fruits and vegetables. The work is funded by the industry with a supplementary grant from the Ministry of Agriculture. The Research Station is the main source of communication in the industry and currently available statistics are maintained on production and trade of processed produce throughout the world, and its work in less developed countries is an important feature. The Processed Vegetable Growers Association Limited (Louth) is an NFU body concerned particularly in the organisation of peas for processing and in negotiations with the processors. They aim to supply the processing industry with the produce required and also to improve the farm return for peas (and other crops). Information and advice to growers is given to assist growers discussions with proicessors on the supply of raw materials. This includes production and harvesting costs and methods, yields, and the range of contract terms available as well as advice of the supply situation for peas. Work is done on a regional basis through Britian. Membership is invited from individual growers or from groups supplying a specific raw material or a specific process. Grower members, numbering some 1200, pay for their services on an acreage basis. Factory field staff play an important part in advising farmers growing peas. They not only advise, but to a large extent they direct, operations on the crop. The major processors also have field research units of their own. Recently, the Pea Growers' Research Organisation has extended its function to cover all processed vegetables, and is now known as the Processors and Growers Research Organisation. The coordinated work on the husbandry side, with Campden Food Preservation Association having emphasis on the processing side, consolidates the comprehensive research in the vegetable processing sector. Specialised research in processing is also carried out at The Food Research Institute at Norwich, and at other University departments.

19 Chapter 2. PEAS IN THE FARM ECONOMY

THE ECONOMIC SURVEY OF'VINING PEAS

The Sample To prepare for a national survey of vining peas in 1970, a pilot survey was carried out in 1969 in the Cambridge and Nottingham areas where three-quarters of the crop is grown. The 1969 sample was selected from known growers of vining peas to give experience in recording and analysis. This proved essential since there are difficulties in analysing data for pea crops with varying contract arrangements and a lack of uniformity in group accounts. Table 6 shows the distribution of the national survey in England and Wales (strictly Eastern England). The Regions are those of the University departments of agricultural economics where peas are important. Cambridge, Leeds, and Nottingham alone have ninety seven percent of the vining pea acreage in England and Wales, and ninety three percent of that in Britain. As the total sample was 100 farms, the percent figure also indicates the number of farms(Table 6).

Table 6. NATIONAL VINING PEA SURVEY REGIONAL AND COUNTY WEIGHTING

I University and County Thousand Acres(1970) Thousand Hectares Percent(1969) _ ‘ Bedfordshire ' 1.0 0.4 0.7

Cambs. & Isle of Ely 4.4 . L8 3.6

Essex ,. . 4.0 1.6 , 3.1

Hunts. & Peterborough - 2.5 1.0 1.6

Lincolnshire (Holland) 11.3 4.6 9.0

Norfolk. 22.8 9.2 18.6

Suffolk ' ' 11.6 -4.7 8.9 . , CAMBRIDGE,REGION 57.6 23.3 45.5

Lincolnshire (Kesteven) 6.2 2.5 4.1

Lincolnshire (Lindsey) 37.1 - 15.0 30.3

'Nottinghamshire 3.0 . . 1.2 2.3 . , Leicestershire 0.4 0.2 0.5

NOTTINGHAM REGION 46.7 . 18.9 37.2 - East Yorkshire 8.7 3.5 6.0

West Yorkshire • 9.6 3.9 8.0 , LEEDS REGION 18.3 7.4 14.0

TOTAL SURVEY AREA 122.6 49.6 96.7a

TOTAL ENGLAND AND WALES ' 127.5 ' 51.6 100.0 4

• a Raised to 100 for random sample Source. Agricultural Statistics. England and Wales.

20 The random sample(drawn by the Ministry of Agriculture) was stratified by acreage district and scale • of production: Farms with less than ten acres (representing only 0.3 percent of the total for England and Wales), and counties with less than a thousand acres of vining peas, were omitted. As can be seen in Table 7 the sample collected varied slightly from the ideal.

Table 7. THE RANDOM SAMPLE

- Vining pea acreage 10-30 30-50 50-70 70-100'100-150 150 &over All Size group (ha) (4-12) (12-20) (20-28) (28-40) (40-60) (60 &over) Groups •,

UNIVERSITY AND COUNTY

, Bedfordshire - 1 1

Cambs. & Isle of Ely 1 1 1 1 4 _ Essex 1 •2 3

Hunts. & Peterborough 1 - 1 2

Lincs.(Holland) 1 1 1 2 4 9

Norfolk 2 3 4 4 3 3 19

Suffolk a 1 1 •2 2 2 1 9 ,

CAMBRIDGE 3 6 8 9 9 12 47 — , Lincolnshire (Kesteven) 1 3 4

Lincolnshire (Lindsey) 1 3 3 4 7 13 31

Nottingham 1 1 1 3

Leicester 1 1

NOTTINGHAM 1 4 3 5 8 18 39

East Yorkshire 1 1 1 1 1 1 6 , West Yorkshire 1 1 1 1 1 3 8

LEEDS 2 2 2 2 2 4 14 4 Random Sample 6 12 13 16 19 34 100 Collected Sample 5 8 14 17 19 37 . 100 1970 Distribution 6 8 11 14 • 21 40 100 .. ,

Difficulties were encountered for example in recruiting enough farmers with less than fifty acres because they are less interested in the crop. The sample of course refers to 1969,whereas farmers could have changed their acreage in 1970. When the 1970 size distribution was available however it was found that the number of small farms had declined and the sample collected was almost exactly correct. Overall, the sample obtained thus represents the size distribution of vining peas in 1970 quite satisfactorily. The location of the farms and the processing factories is shown in Figure 3, page 9. Since annual contracts are made for vining peas, farmers were not only keen to participate but it became evident that they are more aware of the economics of this crop than of most.

21 The Farms Cropping Vining Peas The hundred completed records in the survey cover fourteen percent of the pea acreage in England and Wales. Cropping details are given in Figure 5, below. These farms which have 900 acres of arable, are "highly mechanised and specialise in large scale production of a few crops. At least half"the land is cereals, more than half on farms with less than seventy acres of peas. Vining peas, the most remunerative break crop, account for a sixth of the arable crops, just within the rotational limits for peas of one in five. As more peas are grown, the proportion of land in peas presses against rotation limits. The ratio of peas to total arable is one in eight for the smallest pea acreage size group, one in seven for the three middle sizes, and one in five for the largest sizes, farms with a pea acreage of 150 acres or more.

Fig. 5. ARABLE CROPPING BY VINING. PEA ACREAGE SIZE GROUPS

Acres per farm

1500 -1/4 —Average of all farms

TOTAL ARABLE

1000

500

•••• TAT OES _ & SUGAR BEET

•••• VINING PEAS I . I 10 to 30 30to50 50to70 70to100 100to150 150& over Size group - acres

THE SURVEY RESULTS

Costs and Returns by Type of Production Most farmers growing vining peas own the crop entirely. Seven (mainly in Yorkshire) grow peas in partnership or let their land for peas. These exceptions are of little importance and account for only three percent of the acreage.

22 Table 8. COSTS AND RETURNS BY TYPE OF PRODUCTION

Type of Production Farmer Owned Partnership Land Let

Number of farms 93 3 4

Vining pea acreage (ha) per farm 178/12(72) 56(23) - 84(34)

Acres(ha) covered by the survey 16618(6725) 168(68) 338(137)

Yield tons per acre (tonnes p. ha) ' 1.81(4.47) n a n a

£ £ £ RETURNS PER ACRE (ha) 97.1(239.9) 23.1a(57.1) 20.8b(514)

Variable Costs per acre

Seed 12.4 - - , Fertilisers 2.1 _ . -

Spray Materials 2.2 - -

Contract 15.3 - - . Miscellaneous 0.5 - - ' Total Variable Costs per acre 32.5 - - F GROSS MARGIN PER ACRE 64.6 23.1 20.8

Fixed Costs per acre

Labour 2.8 1.0 0.7

Tractors 2.5 1.0 0.9

Machinery 2.5 0.7 , 0.4

Rent and rates 11.0 8.3 9.1

Overheadsc 5.3 1.7 - , Total Fixed Costs per acre 24.1 12.7 11.1 - Total Costs per acre (ha) 56.6(139.9) 12.7(31.4) 11.1(27.4)

NET PROFIT PER ACRE(ha) 40.5(100.0) 10.4(25.7) 9.7(24.0) ' Return per ton 53.6 n a n a

Total costs per ton 31.3 n a n a

Net profit per ton 22.3 n a n a

a Farmers share of sale proceeds less partners costs b Rent payment to farmer c Fifteen percent of farm costs.

In partnerships (middle column Table 8) the farmer on whose land the crop is grown ploughs and cultivates, and the other partner, either a group or a bigger pea grower, does the drilling, fertilising, spraying and harvesting, and also pays for the materials used. The difference between the sale value of the crop, and the expenses of the major partner is the basis of profit, half of which goes to the farmer. (This contrasts with partnership growing of carrots where both partners expenses are deducted from the returns before profit is shared.) When land is let for peas for a straight rent (end column Table 8) the farmer's return is fixed and unrelated to sales. As in partnerships, the farmer usually ploughs and cultivates. It will be seen (Table 8) that in the case of partnerships and land let the gross margin is only about a third and the profit a quarter 23 of that of the crops owned by the farmer. The farmer hbwever has less responsibility and less risk. This leaves him free to deal with other crops and provides a break in the rotation. Table 8 shows the costs and returns from vining peas in 1970. Pea growers proper have returns of £97 per acre for an outlay of £57 and a profit of £40. Two thirds of the costs are variable, mainly contract work and seed supplied on credit by the processor. Fixed costs are low as many farms own no harvesting equipment. Overheads assessed at fifteen percent of farm costs excluding contract work, are based on the Cambridge Farm Management Survey. Further data and the imputed results for 1973 come later. Table 9 shows the results by region with growing and harvesting shown separately, and more details of returns. Results for individual farms of course differ froin the averages in Table 9 because of their different arrangements, particularly for harvesting. Each year a small proportion of vining peas, depending on the weather, becomes too mature for processing. These are "seeded down" and threshed as dried peas. The first part of Table 9 shows the acreage, yield and price of vined and threshed peas, and a breakdown of returns. Returns are mainly from sales of vined peas and from allowances for farm vining paid by the processor as part of the contract. Payment (less than that for vining peas) is also made for dry peas, and allowances are made for various items. These include crops by-passed from the vining programme and premiums for early and late drilling. Growing costs amount to £23 per acre, three quarters of which is seed, fertiliser, sprays, and harvesting costs ainounting to £18 per acre. Variations occur between regions and one of the more important causes apart from yield differences is the type of process supplied. In Cambridge sixty percent of the farms contract for freezing and forty percent for canning. Virtually all the Nottingham peas go for freezing but the smaller Leeds crop goes for canning and freezing in equal amounts. Only three farms have contracts for peas for dehydration. The price per ton including vining allowance is as follows; freezing £59, canning £52, and dehydrating £64. Cambridge has the highest returns (highest yield and vining allowances), but also the, highest costs for growing and harvesting. Nottingham has near average returns from a lower yield of peas which fetch a better price giving profits slightly above those for Cambridge. TheNorkshire growers (Leeds) have much the lowest yield (three of the seven farms reported a very dry spring, low germination and poor yields) and the lowest returns of £20 below average. This is partly due to an absence of vining allowances and of dry pea sales. The Yorkshire farms however have the lowest costs, harvesting is £10 below average and the profit is also £10 below average. These farms have a more direct link with the processors who incur more of the costs and therefore pay out less in returns. Three of the seven farmers process peas on their own account and also grow peas on other farms than their own.

24 Table 9. COSTS AND RETURNS(MORE DETAIL)AND REGIONAL COMPARISONS

All Farms Cambridge _ Leeds , Nottingham I Number of farms 93 48 . 7 38 Acreage per farm - peas vined 175 159 304 172 Acreage per farm - peas harvest. dry 3% . . 3 . _ 5 Acreage per farm - vining peas 1781/2 162 304 177 • , Acres(ha) covered by survey 16618(6725) 7771(3145) 2126(860) 6721(2720) ' , PEAS VINED . Yield cwts per acre 36.2 38.4 32.0 34.4 Price £ per ton 48.0 46.4 48.6 50.0 PEAS HARVESTED DRY Yield cwts per acre ° 20.4 20.2 - 20.8 Price £ per ton 48.6 80.0 - 32.9 RETURNS PER ACRE . £ £ £ £ Vining pea sales 84.7 86.5 77.2 83.8 Vining allowances 10.4 13.9 - 8.0 Dry pea sales 0.9 1.3 - 0.5 Other allowances 1.1 - - 2.7 , TOTAL RETURNS 97.1 101.7 77.2 95.0 .- , COSTS PER ACRE £ £ £ £ Seed 12.4 12.5 12.0 12.5 Fertiliser 2.1 2.2 2.1 1.8 Spray materials 2.2 2.5 1.2 2.0 Total materials 16.7 17.2 15.3 16.3 Contract spraying 1.6 1.6 0.8 1.7 Contract cultivations 0.1 0.1 - , 0.1 Labour 1.2 1.4 1.1 1.1 Tractors 1.6 1.7 1.6 1.5 Machinery 1.1 1.1 0.9 1.0 Miscellaneous 0.5 ' 0.8 - 0.2. , TOTAL GROWING COSTS , 22.8 23.9 19.7 21.9 , , Harvesting by farmer: Labour 1.6 2.7 1.6 0.1 Tractors 0.9 1.5 1.2 0.1 Machinery 1.4 1.8 3.9 0.3 v Harvesting by Group 10.9 10.5 -.13.5 Contract harvesting 2.7 2.8 - - 3.6 2.6 TOTAL HARVESTING COST 17.5 19.3 10.3 16.6 _ Total Growing and Harvest. Cost 40.3 43.2 30.0 38.5 Rent and Rates 11.0 11.6 10.3 10.5 Overheadi • 5.3 6.0 5.4 4.4 _ , TOTAL COSTS 56.6 60.8 45.7 53.4 NET PROFIT 40.5 40.9 , 31.5 , 41.6

25 Table 10.GROSS AND NET YIELD OF PEAS - CWT PER -ACRE REGIONS AND ENGLAND AND WALES (Net yields where different from gross shown in parenthesis)

England and Wales ' Cambridge Leeds Nottingham

Peas for Canning

1968 . 32.2(30.4) 27.0(26.8) 35.0(30.0) 33.0

1969 34.8(33.6) 35.0 35.0(30.0) 30.6(30.2) •

1970 30.8(30.6) 29.8 32.0 29.0

1970 sample - yield sold 40.6 42.0 33.6 28.0

1971 41.6(40.8) 38.5 45.0 35.0 , 1972 •38.6(38.0) 43.5 36.0 30.0

1968 to 1972 average 35.6(34.8) 34.8 36.6 31.5

Peas for Freezing and Dehydration _ - 1968 31.6(31.0) 28.6 30.0(25.0) 34.0

1969 . 36.0(34.8) 35.0 30.0(20.0) . 36.8

1970' 31.8(31.6) 33.6 34.0 30.0 , 1970 sample - yield sold 33.6 32.2 30.4 34.8

1971 • , 36.1(35.2) 35.0 - 40.0 35.0

1972 35.2(35.0) 42.5 32.0 30.0

1968 to 1972 average 34.1(33.5) 34.9 33.2 33.2

Source:Derived from M.A.F.F. Statistics

Yield estimates from the Horticultural Crop Intelligence data are given in Table 10 together with the results from this survey. Yields and therefore receipts per acre vary greatly from one season to the next. Costs on the other hand do not vary to any great extent with yields. In consequence profits fluctuate even more widely than yields and receipts per acre. The average yield for 1968 to 1972 may be taken as normal and has been used for the imputed costs and returns for 1973. Referring to the 1970 survey there are also big differences in yield between Regions. For canning peas, the Cambridge region has much the best yields. Leeds comes next with Nottingham a poor third. On the other hand, Nottingham has the best yield of peas for freezing with Cambridge next and Leeds third. Gross yield is yield harvested and net yield is yield sold. The sample yield of canning peas(1970 England and Wales) is appreciably higher than the Crop Intelligence figure but that of freezing peas is slightly higher than the estimates. A national random sample giving yields actually recorded is rarely available to check Crop Intelligince estimates. This check is possible for vining peas from the yields recorded in the 1970 Survey. Table 10 shows. big differences between the Crop Intelligence estimates and the recorded yields of the Survey. Though difficulties in the Crop Intelligence estimation is acknowledged, the differences between yield estimated and recorded (especially for canning peas) and those recorded in the random sample for 1970 do suggest, that Crop Intelligence procedure be examined, as also the weighting given to the various districts for which estimates are made.

FACTORS AFFECTING PROFITABILITY

Size of Enterprise and Profitability Table 11 shows the results of the ninety three farms in four groups of crop size(10 to 50 acres, 50 to 100, 100 to 150, and 150 and over). Profitability per acre rises with increase in size to the fifty to one hundred level and falls off progressively but not greatly in the large size groups, remaining well above that of the small size group. Variation in profit per acre between size groups is slight. For instance, profit per 26 Table 11. COSTS AND RETURNS BY SIZE OF ENTERPRISE

Vining Pea acreage group-acres (ha) Size of Enterprise All' 10 to 50 50 to 100 100 to 150 150 &over Farms (4 to 20) (20 to 40) (40 to 60) (60 &over) Acreage of peas vined 175 44 87 141 , 299 Acreage of peas harvested dry 3% - 2 2 7 Vining pea acreage per farm 1781/2 44 89 143 306 VINING PEAS Yield cwts per acre 36.2 39.0 35.8 36.2 35.6 Price f.'s per ton 48.0 45.0 47.4 48.3 49.3 HARVESTED DRY Yield cwts per acre 20.4 15.2 16.4 23.4 21.0 Price f.'s per ton 48.6 33.3 47.0 49.8 48.9 RETURNS PER ACRE £ £ £ £ £ Vining pea sales 84.7 86.3 84.7 85.9 83.7 Vining allowances 10.4 11.9 11.1 8.4 10.5 Dry pea sales 0.9 0.1 1.4 0.6 0.9 Other allowances 1.1 0.1 0.4 1.2 1.9 TOTAL RETURNS 97.1 98.4 97.6 96.1 97.0 COSTS PER ACRE Seed 12.4 13.0 12.5 12.0 12.4 Fertiliser 2.1 3.1 2.2 1.9 1.7 Spray materials 2.2 1.9 2.3 2.3 2.2 Total materials 16.7 18.0 17.0 16.2 16.3 Contract spraying 1.6 2.1 1.4 1.7 1.5 Contract cultivations 0.1 0.1 0.2 - 0.1 Labour 1.2 1.8 1.3 1.2 1.1 Tractors 1.6 1.6 1.4 1.8 , 1.7 Machinery 1.1 1.1 1.0 1.1 1.0 Miscellaneous 0.5 0.4 0.7 0.5 0.3 TOTAL GROWING COST 22.8 25.1 23.0 22.5 22.0 , Harvesting by farmer: 1 0 Labour 1.6 3.0 0.6 1.8 1.7 Tractors 0.9 0.9 0.4 1.2 1.2 Machinery 1.4 1.3 1.2 1.2 1.6 Harvesting by group 10.9 11.2 9.5 10.8 12.0 Contract harvesting 2.7 3.6 4.4 1.8 1.7 - TOTAL HARVESTING COST . 17.5 20.0 16.1 16.8 18.2 TOTAL GROWING AND HARVESTING COSTS 40.3 45.1 39.1 39.3 40.2 Rent and rates 11.0 10.8 10.7 10.5 11.7 Overheads 5.3 5.8 5.1 5.1 5.4 TOTAL COSTS 56.6 61.7 54.9 54.9 57.3 NET PROFIT 40.5 36.7 42.7 41.2 39.7

27 acre is £36.60 for the small size (lowest profit) and £42.70 for the optimum size. Returns per acre however are relatively constant throughout, the range of size, and they average £97. Costs (both growing and harvesting) average £56 per acre, being much higher in the smallest size group(£62 per acre). Costs per acre are very similar in all three larger size groups (about £40), but they are appreciably higher in the small size group. The small size group apart (only 11 percent of the sample), costs per acre are remarkably close for the sample as a whole and economies of scale are absent. The- smallest growers (under fifty acres) obtain the highest receipts but with higher costs have the lowest profit. The smallest size group gains a valuable premium on account of its high yield. The average yield is 39 cwts per acre, compared to 36 cwts in the other groups. The price per ton however was lower than the larger groups by some £3 to £4. The profitability of the small size group is brought below average because of higher costs per acre, but farmers in this group due to better yield have a higher return per acre than those on the larger acreages. Farmers on the optimum scale (fifty to one hundred acres) have sufficient size for scale economies in operations and they get close to average yield and return per acre. Costs per acre in this scale are identical to those of the next larger size group(100 to 150) whose return per acre is -slightly less. This results in the 100 to 150 acre size group having a profit a little below (only £1.5) that of the optimum size group. The largest size group (150 acres and over) gets the highest price per ton and an average yield. This group has third place for profit per acre on account of higher costs per acre. Over the four size groups, the smallest acreage group and the largest are noted for having the highest costs, and the smallest size group, the highest yield. It must be emphasised, however, that the differences in economic results between all size groups is really quite small. Though seed costs per acre are similar throughout the scale, farms in the small size group with the highest yield spend more on seed. They also spend more on fertiliser and put on more per acre which no doubt contributes to their good yield. Further up the scale of size, less is spent on seed and fertiliser. This is in part due to the rate of discount on these items which applies to larger orders. Outlay per acre on sprays and contract spraying(taken together) is constant throughout the scale. The relative absence of increasing returns to scale arises because even the smallest scale (average pea enterprise'.44 acres) is large enough to reap most of the economies of scale in growing operations,(See also Table 13 and 14, operational costs and labour requirements)while harvesting on the smaller acreages is mainly done on contract at so much an acre either by group equipment or by farmer contractors. The optimum scale of production disclosed by the data should not be misunderstood. It is only optimum to intensity in terms of the pea acreage. It is not optimum in terms of individual large mechanised arable farms. The optimum also involves other factors among which is the complementarity of peas with other crops, especially cereals,'in resource use of the farm, and the size of the contract and its impact on the farm business. Much may also depend on the availability of soil suitable for peas. The farmer is most concerned with the net profit of the farm as a whole, and peas, as a profitable break clop on a big scale, ideally suits the organisation of these mainly cereal farms because the pea harvest is completed before cereals. Finally, the processors control size through their annual contracts. They also control growing and harvesting and they refuse contracts to growers who fail to keep their high standards. This accounts for the small variation from the average in profitability and costs and returns in vining pea production. In vining pea production there is no question of the outstanding efficiency of the majority, a feature of other farm crops. All farmers who get pea contracts comply with the high standards of performance expected from them • by the processors or their contract is not renewed. On the other hand, because of the financial incentive given by the contract price and because of conditions made by the processor in the contract, farmers take good care to maintain the required standards.

FARM ORGANISATION

Group and Individual Enterprise Two important factors modify the organisation of farms with vining peas. The first is the part played by the processors, controlling production and harvesting. The other is that farmers often cooperate in producer groups to carry out harvesting. Of ninety three farms, over two thirds harvest as groups. As might be expected, the groups include the smaller farms and the 70 percent of farms included grow 60 percent of the sample acreage. It is notable that 2.3 percent of the peas are harvested dry by group members and 1.5 percent by the others. This suggests that groups fail to vine the large acreages they grow (on different farms) as effectively as the independant growers. The vining pea yield of independents is better than that of the groups, but the price per ton is practically identical. For peas harvested dry (which affects return little), yield is similar but the price obtained by group members is much less than that of the others. Superiority in yield results in higher vining pea sales for the independents but they receive less in vining and other allowances. This brings the total return per acre of the groups to £2 above that of the others. It seems that the groups gain this 28 slight edge through their bargaining strength in connection with price and allowances paid rather than by better farm peiformance. As to the merits of independent or group harvesting, it seems quite evident that farmers choose the arrangement which best suits their own farm organisation.

Table 12.OVERALL COSTS AND RETURNS OF GROUP MEMBERS AND NON GROUP MEMBERS

_ Non Group Number of farms All Farms Group Members ' Members • 93 65 28 _ Acres covered by the survey (ha) 16618(6725) 10242(4145)• 6376(2580) Average acreage of peas vined 175 154 224 Average acreage of peas harvested dry 31/2 31/4 3/12 Vining pea acreage per farm 178% 157/12 227/12, VINING PEAS Yield cwts per acre 36.2 35.4 38.4 Price L's per ton 48.0 48.0 48.1 HARVESTED DRY Yield cwts per acre' 20.4 20.8 19.2 Price L's per ton 48.6 39.4 83.5 RETURNS PER ACRE £ £ £ Vining Peas sales 84.7 82.4 90.1 Vining Allowances 10.4 13.4 3.5 Dry pea sales 0.9 0.8 0.9 Other allowances 1.1 1.6 - TOTAL RETURNS 97.1 98.2 94.5 COSTS PER ACRE Seed 12.4 12.5 12.3 Fertilisers 2.1 2.3 1.4 . , Spray materials 2.2 2.4 1.9 Total materials 16.7 17.2 15.6 Contract spraying 1.6 1.8 1.1 Contract cultivations ,0.1 0.1 0.1 Labour 1.2 1.3 1.2 Tractors 1.6 1.5 1.7 Machinery 1.1 1.0 1.1 Miscellaneous 0.5 0.5 0.5 TOTAL GROWING COSTS 22.8 23.4 21.3 Harvesting by farmer: Labour 1.6 0.4 4.2 ' Tractors 0.9 0.2 2.5 Machinery 1.4 0.4 - 3.6 Contract harvesting 2.7 1.7 5.3 f( Harvesting by group 10.9 15.7 - TOTAL HARVESTING COSTS 17.5 - , 18.4 15.6 TOTAL GROWING & HARVESTING COST 40.3 41.8 36.9 Rent and rates 11.0 10.7 11.8 Overheads 5.3 4.8 6.4 TOTAL COSTS 56.6 57.3 55.1 NET PROFIT 40.5 40.9 39.4

29 The position is explained in Table 12.with regard to costs. Group members have a disadvantage here almost equal to their advantage'in returns, though the magnitude of those differences is small. The result is that profit per acre of group members and independents is virtually the same. Group members spend a little more on seed, fertiliser and sprays, especially with contract spraying included, costs which are slightly lowey on the larger acreages of the independents. This gives independents slightly lower growing costs. Harvesting costs per acre are £3 more for group members than for independents. This difference is.a reflection of the better field performance or at least the lower level of the independents cost. Economy in harvesting for the independents is to be expected. They have a bigger acreage and harvesting is not a contract operation so extra costs incurred in this way are avoided.

• OPERATIONAL COSTS AND LABOUR REQUIREMENTS Most of the ninety three farms supplied records suitable for analysis. In giving details of individual operations however, a few using more than one method of harvesting were omitted.(These are included in the totals in Table 13.) Operational costs account for the same factors as in Table 6 but are represented on the basis of each operation (for example, drilling includes man and tractor hours, depreciation on machinery, and seed). Of total costs, overheads and rent account for thirty percent, and operations seventy percent of which over forty percent are materials.

Table 13.. OPERATIONAL COSTS PER ACRE _ , Number Operation . of Labour Machinery Materials Total Farms I I X 1 .- Stubble cleaning . • 39 0.31 0.59 - 0.90

Ploughing 88 0.47 _ 1.02 - 1.49

Seedbed cultivations , 91 0.27 0;64 2.03 fert. 2.94

Drilling 87 0.22 0.33 12.01 seed 12.56

Post drilling cultivations 85 0.13 - 0.20 - 0.33 ,, Spraying 71 0.10 0.11 3.49 spraysa 1 3.70

TOTAL GROWING COST 1.50 . 2.89 17.53 21.92

Own Harvesting

Cutting 24 1.04 1.78 - 2.82

Vining • 24 1,48 6.36 - 7.84

, Cartingb • 24 1.48 1.89 - • 3.37 - TOTAL HARVESTING COST 24 4.00 10.03 - 14.03

CONTRACT HARVESTING 37 - - - 24.51 , OWN HARVESTINGe 35.95 , ,CONTRACT HARVEST1NGc . 46.43

a By farmer in all cases including contract where some spraying is done in this way. Contract only £4.37 per acre on 20 farms. b Excludes transport to factory (nine farms £3.56 per acre). c Total costs per acre, using relevant system.

Due to mechanisation and scale, costs of operations per acre are low, £22 for growing £14 for farm harvesting, and £24.5 for contract harvesting. Sixty per cent of the farmers harvest as a group, a quarter harvest alone (frequently having cutting done on contract), and on the remaining farms the processor harvests. Processors often use a group for harvesting or contract with other farmers for this work. Labour requirements are given in Table 14.These relate to specific operations. 30 Table 14. LABOUR REQUIREMENTS PER ACRE

Number Hours per Number Most Usual Operation of man each of Total Dates of Farms time times manhoursa . Operation

Stubble cleaning 39 0.48 1.74 0.84 Nov to Jan

Ploughing 88 1.25 1 1.25 Nov to Jan

Seedbed cultivations . 91 0.31 1.77 0.55 Feb to Apr

Fertiliser application 55 0.25 1 0.25 Mar to May

Drilling — 1 man 64 0.40 1 0.40 Mar to May

Drilling — 2 menb 23 0.55 1 1.10(0.55) Mar to May

Post-drilling cultivations 85 0.22 1.27 0.28 Mar to Jun

Spraying 71 0.21 1.31 . 0.27 Mar to May

Harvesting ,23 1.46 6 men 8.85(7.23) Jun to Jul

TOTAL MAN HOURS - 13.98(11.07) ,

a When tractor hours differ from man hours, they are shown alongside. Tractor hours (total) 11.07 b Not included in total. c Excludes a farm with a state viner where an acre was vined with ten men in 4 hours. Operational costs and labour requirements in each size group are given in appendix Table 1. Farms in the smallest size group have higher costs but growing costs per acre on farms with more peas are almost identical irrespective of the size of enterprise. In the minority of cases where the farmer harvests, costs of harvesting are higher (50 acres and less) but only three farms are concerned (one of these with a static viner is omitted). Harvest costs on those farms in the hundred to one hundred and fifty acre size are less than those on the next smaller and the next larger sizes. Group harvesting costs per acre are similar over the whole scale with a slight tendency to increase on the larger acreages. The use of sprays is reported from seventy eight records in Table 15. This gives the number of crops on which sprays are wholly or partially applied and the proportion of the acreage sprayed. Almost all the farms apply pre-emergence sprays and most use insecticides. Indeed, spray application against certain insect and biological pests is a condition of processing contracts. Insecticides are applied by contractors on two thirds of the acreage and aerial spraying (£3.50 and acre) is quite common. Most of the pre-emergent spraying is done by the farmer.-

31 cr.

•••• Table 15. USE OF SPRAYS ON 78 FARMS GROWING 14,000 ACRES OF'VINING PEAS

, . . 'Number of farms Prop'n of - Proportion of area ' Range of contract • using sprays on: area sprayed applied by: • spraying•chargesc sprayed , Type of Spray contractor . . Whole Part Total • grower , area area . . ground air , ' . . percent . percent percent percent £ per acre HERBICIDES .. •

A) Pre-emergent . (Prometryne) . such as Gesagard 12 39 51 36.5 86.9 13.1 - 2.94 to 4.00

B) Post-emergents (Dinoseb) • such as DNBP 24 40 . . 64 56.9. 81.3 15.7 3.0 1.72 to 4.00

C) Wild Oatia , . such as Avadex • Carbyne, TCA . 2 21 23 6.2 , 92.8. 7.2 - 3.62 to 4.65 • Total Herbicides (A+B) • 93.4 . . . ^

INSECTICIDESb . . e.g. DDT, Metasystox, Rogor., • . • 20 44 . 64 45.3 38.6 35.0 26.4 1.03 to 3.40 Gusathign ' a Used as a second herbicide with the exception of one farm. b 52 farms sprayed insecticides once only, 11 farms twice and one farm three times on part of the area. c The range in contract charges is due to the varying cost of materials rather than to the type of application (ground or air).

Harvesting details are shown in Table 1-6 which distinguishes mobile vining, now the most common type, from static vining. Speed of delivery to the factory, to. ensure that the peas are processed, is the criterion on which the whole harvesting operation is based. The older practice was having static viners near the factory to which the vine was taken from the field. Only three of these were encountered in the survey. In the last five or six years however vining groups have been encouraged by grant aid to buy mobile viners that facilitate .rapid delivery to the factory. On some farms many viners take part in the harvesting operation. For example, one group uses two mobile and four static viners. It is in harvesting where most of the investment lies, grain drills cost some £200 to £300, but cutters are over £500 and self propelled high capacity ones over £3,000. Static viners cost £3,000 and mobiles £8,000 to £10,000. See appendix Table 2 for costs and capacities Of vinning pea equipment. Cutting is frequently done on contract even if the farmer owns a viner. Cutting is common to either system of harvesting. The harvesting of vining peas is one of the most sophisticated operations in modern farming. Cutting and vining is done to a tight schedule on instructions from the factory. Delivery of the vined peas is regular; tankers leave when they are only partly filled. Speed is essential provided that loss of peas in the field(which can severely cut the profit) is avoided. Peas cut at 5 am will be at the factory by 7 am, and processed by 9 am. Groups and processors have mobile workshops in the field, and vining normally goes on night and day for five weeks. Each factory controls harvesting on several thousand acres usually by radio. The whole programme on the farm from the date of planting (which determines the time of harvesting) to delivery, is geared to full utilisation of the processing lines for a little over one month of the year.

32 Table 16. HARVESTING COSTS IN DETAIL £ PER ACRE a

MOBILE VINER STATIC VINER (19 Farms) (3 Farms) CUTTING .

Labour 1.04(2.27) 1.04(2.27) Tractors , 0.82 ' 0.82 Machinery depreciation and repairs 0.92 - 0.92

2.78 2.78 VINING

Labour 1.43(3.23) 6.92(11.55) -

. Tractors _. , 1.07(2.52)

Machinery depreciation, repairs, fuel 6.43 1:41 '

8.93 8.33 .

Average gang size per viner- 1% men - 4 men

CARTING AND LOADING '

Labour 1.40(3.0) .5.50(13.45)

Machinery incl. tractors and lorries 1.46 3.01

2.86 8.51b TRANSPORT TO FACTORY . , Farm transport 3.31 , Contract . . 3.48 - • _ Average . 3.40 . .. , TOTAL HARVESTING (Field to Factory) 17.97 19.62 -

Average gang size per farm 6/12 men 7'/2 men Average yield, cwts per acre , 41.6 45.2

a Figures in parenthesis are man hours. Total man hours per acre harvested ranged from 5 ztei 8. b Field to viners (11.3 miles).

Table 16.shows that total costs of mobile and static vining are quite similar. These records show static vining is greater which more than offsets the extra cost. The mobile viner now predominates, however, static viners and will gradually disappear. It is true that with the near perfection now reached of in mechanisation the pea harvest, reductions in field loss of peas will give the greatest return.

PEAS FOR PARTICULAR OUTLETS

Canning, Freezing, and Dehydration An estimate of the outlets for peas in the whole sample of 100 farms and 17124 acres, follows.- On the seven farms with only a part interest, the co-operating farmer did not sell the peas and the acreage for each outlet has been estimated. A breakdown was made for nine farms of the ninety three where peas were sold to more than one outlet. Of the 17124 acres in the survey, 4846 acres or 28.3 percent went.. canning, 11388 for acres or 66.5 percent went for freezing, and 562 acres or 3.3 percent for dehydration. Finally, 291 acres or 1.9 percent went as dried peas. Table 17 shows results from eighty four farms where sales were a single outlet for canning, for freezing, or for dehydration. In the canning class of twenty, seven were group members, and of the freezing class of sixty one only nine were not. One of the three farms with peas for dehydration was a group member. The nine omitted from Table 17 include five group members and four independents. 33 Table 17. PEAS FOR CANNING,FREEZING AND DEHYDRATION - COMPARATIVE RESULTS

TYPE OF CONTRACT CANNING ' FREEZING DEHYDRATION 3 Number of farms 20 61

Average acreage of peas per farm: . 132/12 165 271 vined 31/2 harvested dry 21/2 16% vining peas (ha) 135(54) 168/12(68) 28714(116)

Acres (ha) covered by the survey 2705(1095) 10276(4159) 862(349)

YIELD AND PRICE

Vining Peas

Tons per acre 2.03 1.67 1.80

£ per ton 44.80 49.37 56.03

Dry peas

Tons per acre 0.94 1.05 0.60

£ per ton 74.53 32.86 80.00

RETURNS PER ACRE £ £ £

Sales of vining peas 87.44 81.19 96.80 ,

Vining allowance 9.32 10.18 9.10

Other allowances 1.69

Sales of dry peas 1.14 0.70 2.33

TOTAL RETURNS PER ACRE 97.90 93.76 108.23 , GROWING COSTS PER ACRE 22.06 23.42 23.03

HARVESTING COST PER ACRE 17.53 17.00 21.40

Rent and overheads 17.35 15.01 17.23

TOTAL COST PER ACRE 56.94 55.43 61.66

NET PROFIT PER ACRE 40.96 38.33 46.57

The above 84 farms grow 13843 acres. Nine farms with mixed outlets grow 3075 acres and 7 farms where the crop was grown by partnership or rent arrangements grow 506 acres. A total of 17424 acres. It is estimated that the 9 farms grow 2057 acres for canning and 981 acres for freezing, while on the 7 farms 170 acres went for canning and 336 acres for freezing. This gives a total of 4932 acres for canning and 11593 acres for freezing, plus 862 for dehydration.

Table 17 shows profit per acre to be highest for peas sold for dehydration but these farms carry an extra £10 per acre investment, in cooling equipment. Profitability of canning peas exceeds that of freezing peas by only £2 to £3 per acre. Growers for dehydration get the highest return from a yield mid way between those of the other two types (freezing lower and canning higher), and returns per acre of the canning pea are some £4 above those of freezing peas. Growing costs in each case are practically the same, but harvesting costs (slightly higher for canning than for freezing peas) are greater for peas for dehydrating which bear more investment (cooling equipment). Costs per acre of canning and freezing peas are similar, but that of canning peas is slightly higher. Costs per acre of peas for dehydration are appreciably higher than those for peas grown for canning and freezing. Comparative results for selling freezing peas to different processors are given in Table 18. The outstanding result is the high profit of farmers contracting with Company B which exceeds by £30 the return per acre of farmers selling to the other Companies. The twenty four percent yield advantage of Company B (growing seed in a particular area known for good quality) farmers accounts for much of the higher return which is also raised by vining and other allowances. The level of yield of growers sending to the factory was supported by factory records, and similar records in other areas showed yields to be down by comparison. This finding supports other evidence from the survey which demonstrates the great importance of soil for pea production. Obviously because of a shortage of the most suitable soils, many peas are grown in areas marginal to pea production compared with the area in which Company B operates. It is true to say that farmers on the best pea soils make better profits per acre than others. The industry did not grow up on the best soils, factories were built in certain locations for other reasons then the vining pea acreage 34 was recruited. Profitability is the better test as returns do depend to some extent on how the responsibilities of the processor and the farmer are divided in relation to the crop. It is clear from the survey that the same farmers get different results from different processors, but these results are also associated with the type of soil offered by the area in which they are situated. In most areas however, the farmer has little choice of outlet for peas. The factory must be within 30 to 40 miles of the farm and there may be few,if any, alternative outlets. This could give the processor monopolistic powers within his area and in theory a central negotiating body might be required to ensure equality in returns. In practice farmers don't seem to want this. No doubt the generous attitude of the processors towards pea prices and allowances lessens the need for such a body.

Table 18. FREEZING PEAS FOR DIFFERENT PROCESSORS - COMPARATIVE RESULTS . . Farm Company A 1 Company B OtherCFroemezpersani8ces • Number of Farms 35 10 16

Acres of peas vined 118% 238 ' 221Y2 Acres of peas harvested dry 1'4 11 3 Total acres vining peas per farm 120 249 224% Total acres vining peas surveyed (ha) 4193/12(1697) 2490(1008) 3592/12(1446) YIELD AND PRICE Vining Peas

Tons per acre 1.63 2.09 1.50 £ per ton 49.25 44.23 53.03 Dry Peas

Tons per acre . n a 1.31b 0.76

£ per ton n• • a 32.50 33.26' RETURNS PER ACRE , £ £ . £ Sales of vining peas 79.27 87.84 81.21 Vining allowances 9.08 23.20 4.46

Other allowances 0.39 7.44 1204 Sales of Dry peas 1.52 1.73 TOTAL RETURNS PER ACRE 88.74 120.00, 88.34

GROWING COST PER ACRE 23.45 21.98 24.26

HARVESTING COST PER ACRE 13.15 22.24 22.14

Rent and Overheads 13.34 16.61 17.65 TOTAL COST PER ACRE 49.94 60.83 64.05

NET PROFIT PER ACRE 38.80 59.17 24.29 . _ 1

Yield, Price, and Profit, of Vining Peas The average yield of canning peas is 2.03 tons per acre, that of freezing peas 1.67 tons and that of peas for dehydration 1.80 in this season (Table 17). Comments on the comparison with the Crop Intelligence estimates are given on page 26. Table 19 shows the distribution ,of yield by size of enterprise and by type of production and outlet while Table 20 shows the same breakdown for profit.

35 Table 19. DISTRIBUTION OF YIELDS PER ACRE( Number of Farms)

(a) By Size of Enterprise

— , Average Yield All Vining Pea acreage size group cwts per acre Farms I I . I 00 10-1 -0 - I an. over , 15-20 3 1 2 - - 20-25 9 1 2 1 5

- 25-30 11 1 1 2 8 30-35- 21 3 7 7 4 35740 13 1 7 1 4 40-45 • 16 1 1 6 8 • 45-50 10 1 3 . 2 4 50 & over 7 3 3 - 1 , 90a 11 26 19 34 ' a Yields not available from 3 farms

(b) By Type of Production and Outlet

Average Yield Group Non Group For For Freezing Outlets cwts per acre Members Members Canning & Dehydration ' Mixed 15-20 3 - 1 2 20-25 6 3 2 7 25-30 9 2 1 10 30-35 , 15 6 3 17 1 35-40 9 4 2 10 1 . 40-45 13 3 3 11 2 45-50 6 4 2 4 4 50 & over , 3 4 6 - 1 _ 64a _ 26b 20 61' 9

Yields not available from a — 1 farm; b — 2 farms; c — 3 farms.

In all cases, there is a wide distribution but the range in profit is closely associated with tha't of yield. Costs are virtually the same whatever the yield, a characteristic of, say, cereal and pea production which differs from that of a bulky crop such as sugar beet or potatoes. Variations in cost do of course arise between seasons, a dry and a wet season for instance. The spread of yield over the range applies to all levels of scale but the yield of group members is less than that of non members. Yield is more evenly distributed for canning peas and more clustered around the average for freezing peas (and peas for dehydration). Fariners with more than one outlet do better for yield, a reflection of their complete interest in peas.

36 Table 20. DISTRIBUTION OF PROFIT PER ACRE(Number of Farms) (a) By Size of Enterprise

Profit All . Vining Pea acreage Size Group-. I's per acre Farms 10-50 ' 50-100 100-150 150 & over ' Losses 3 2 - 1 Average Profit .

0-20 16 2 4 4 6 20-30 13 4 1 2 6 30-40 . 16 1 4 3 8 40-50 10 .. 1 4 3 3 , .50-60 12 3 ' 4. 3 . , 2 . 60-70 15. - 5 . 3 . 7 70 & over 8 1 3 1 3

93 11 27 . 19 _ 36 ,

(b) By Type of Production and Outlet

. . . Profit Group Non Group For For Freezing Mixed L's per acre Members Members Canning & Dehydration Outlets Losses . 2 .1 1 2 . • , Average Profit

0-20 14 2 1 14 . 1 . 20-30 7 6 5 7 1 , 30-40 10 . 6 2 13 . 1 40-50 5 5 3 6 . 1 ' 50-60 8 . 4 5 6 • 1 s 60-70. 12 3 1 12 2 70 & over 7 1 2 4 2 , 65 28 20 64. 9

The range in profit is almost equally distributed about the mean, like that of yield. The optimum scale for profit, fifty to one hundred acres, has the most even spread over the range-in profit followed by the next high level of scale, but the profit in the other size groups is weighted more towards the lower parts of the profit range. In all these comparisons, however, the evenness of the results is striking. Profits by type of production show there is a good spread between group members, confirming that group members are in the sense individuals, and the profit of non group members is equally spread about the average. Profits by type of outlet also show the general pattern, a fairly even spread between outlets.

37 MARKET PEAS The cost of growing market peas is similar to vining peas up to the point of harvest when they are sold. Successive plantings from the end of March to early June provide continuous picking for July and August, perhaps running into September. One grower of a hundred acres visited, sprays for pea weevil and pea moth by air, but herbicides application and other operations are under his own management. The ability to recruit and bring casual labour by bus from the nearby town, and the management of the 160 people involved is as critical to success as crop husbandry and marketing. Whole families arrive and are set to work, and there are dozens of pickers' vehicles in the field. Payment is by piecework (in a 40 lb net) and pickers earn up to £3 or more per day. Three farm men weigh and tie the bags and four others cart the nets away to a central point (where piecework payments are checked) for despatch to the wholesale markets in the evening. Pickers move across the field like a tide, pulling up the haulm as they go. Picking out of line leads to crop wastage, supervision is difficult as only peas must be put in the nets. Finally, theft of peas is common. This means that really good yields and a large enterprise are necessary to make the crop worth the trouble. Casual labour, now getting scarce, is more likely to be available if other work can be provided before and after pea picking.

Table 21. MARKET PEAS COSTS AND RETURNS PER ACRE 1972 (Derived from ADAS Yorkshire and other data)

Yield 3.75 tons per acre (210,40 lb nets): Price £56 per ton (£1.00 per 40 lb net)

GROSS RETURN 210.00

Market changes (commission 10 percent Handling 2p per net) 25.20 Hired Transport(7 /12p per net) 15.75

NET RETURN TO'GROWER 169.05

Growing Costs Harvesting Costs

Seed (1/12 cwts) 9.97 Casual labour picking 63.00 Fertiliser 3.75 Transporting pickers 3.50 Spray Materials 2.52 Regular labour 8.25 Labour 2.73 Nets(210@5p each) 10.50 Tractors 2.60 Machinery 0.94

Total growing cost 22.51 Total harvesting cost 85.25

Total growing and harvesting cost 107.76 Rent and rates 12.00 Overheads(15% of costs) 17.96

TOTAL COSTS 137.72

NET PROFIT 31.33

Costs and returns are shown in Table21, derived from data supplied by ADAS Yorkshire where the crop is important brought up to date by the 100 acre pea enterprise referred to. Growing costs are identical to those of vining peas but the outlay on market peas is considerably more. Picking costs over £30 a ton or, with transport, f-70 an acre. Variable costs in total come to £90 (for a crop of 334ons per acre) and fixed costs are £50, leaving a gross margin of £80 from net sales of £‘170. Profit at £32 per acre is not as good as that for vining peas, but 1970 was an exceptional year for vining peas. The main variations in profit are caused by the level of yield. Farmers who grow peas on this scale get good yields, but if hot weather overtakes them, the crop is combined when it is worth £30 a ton for stock feed, leaving a much lower profit per acre.(See later for comments on the increased value of peas for feed.)

38 Table 22. LABOUR REQUIREMENTS AND OPERATIONAL COSTS PER ACRE . ' " Operational Costs Per Acre Labour and , , ' Tractor Require- Tractors° Total ments Per Acre Laboura & Mach. Materials Costs , Labour Tractor 1 X .£ I hours hours

Ploughing 2 2 0.84 ' 1.10 1.94 Seedbed preparation 2 2 0.84 • 1.00 1.84 Drilling 1 1 0.42 0.50 9.97 Seed 10.89 Fetiliser application /12 /12 0.21 0.30 3.75 Fert 4.26 .Spraying 1 1 0.42 0.64 - 2.52 Sprays 3.58 . . Total growing 6% 6/12 2.73 3.54 16.24 22.51 Picking (Piecework at 30p per 401b) 63.00 63.00 Weighing, Tying nets and loading 191/2 8.25 10.50 Nets 18.75 Transporting pickers '3.50 3.50 Total harvesting . 19/12 - 71.25 3.50 10.50 85.25 Total growing and harvesting 25/12 61h 73.98 7.04* 26.74 107.76 ,

a Regular men at 42p per hour b Tractors at 40p per hour

DRIED PEAS Economic data on dried peas has been extracted from a study of break crops(Report number 13 in this series) carried out by the department in Reading University. The sample of fifty five farms was drawn from counties mainly in the South of England, principally Berkshire, Hampshire, Bedfordshire and Hertfordshire. Farms in all size groups (under 20, 20 to 30, 30 to 50, and 50 and over) are three quarters cereals, much more than the farms with vining peas, and they have more break crops. Dried peas only account for five percent or less of the cropping except in the large size group, thirteen percent which is well below the proportion in all the vining peas size groups. Profitability (Table 23) was disappointing in this year, but 1970 was a severe test for dried peas. The acreage planted was thirty percent up on the previous year and oversupply caused low prices and reductions in the contract tonnage (only a part of the acreage grown). At the same time, the processors raised their standards. Inevitably, if Britain is to become more self supporting for dried peas, since their future depends on quality.

39 Table 23. COSTS AND RETURNS PER ACRE BY SIZE OF ENTERPRISE 1970 (Data supplied by Reading University)

All Dried Pea acreage size group Farms 20 20 to30. -36to 50 50 & over Number of farms 55 15 11 18 11 Acres surveyed (ha) 2133(863) . 194(78.5) , 277/12(112) 1 630(255) 1032(418) Dry peas per farm - acres 38% 13 251% 35 94 Yield cwts per acre 17.9 20.5 15.85 17.4 17.3 Price £ per ton 51.95 . 52,8 49.5 50.7 54.8 £ £ , £ £ £ RETURNS 46.5 54.1 39.2 44.1 47.4 _ COSTS Seed 10.7 9.9 11.6 10.6 11.0 Fertiliser 2.4 2.8 1.5 2.3 2.9 Spray materials 3.2 3.1 3.0 3.3 3.4 Miscellaneous ' 0.3 0.1 0.2 0.3 0.5 Labour 1.8 2.2 1.8 1.8 1.5 Tractors 1.5 LI 1.4 1.5 1.3 Machinery 0.8 0.8 0.8 0.8 1.0 Total growing cost 20.7 20.6 20.3 20.6 21.6 Dessicant material 1.4 0.6 1.0 2.0 1.9 Labour 0.8 1.0 0.8 0.7 0.6 Tractors 0.3 0.3 0.3 0.3 0.3 Machinery 1.7 1.8 1.8 1.8 1.7 Contract harvesting 0.2 0.4 0.4 Total harvesting cost 4.4 4.1 3.9 4.8 4.9 Rent and rates 11.0 11.0 11.0 11.0 11.0 • Overheads(15 percent) 5.4 5.4 5.3 5.5 . 5.6 TOTAL COSTS 41.5 41.1 40.5 41.9 43.1 NET PROFIT 5.0 13.0 -1.3 2.2 4.3 Variable Costs 18.2 16.9 17.3 18.5 20.1 GROSS MARGIN 28.3 37.2 21.9 25.6 27.3 _ Fixed Costs 23.3 24.2 23.2 23.4 23.0 NET PROFIT 5.0 13.0 -1.3 2.2 4.3

Average yield (Table 23) is three quarters that of the official estimate for both 1970 and the recent five year average, and pike per ton is £5 less than the officially quoted average of £57. These differences suggest that the area surveyed is somewhat marginal for dried peas compared with East Anglia, where most of the crop is grown, and that the farmers concerned are desperate for break crops. Returns per acre are £47 as against £58 from national data, which, applied to the Reading survey, would give a net profit of £16 per acre instead of £5. These results compare strikingly with those of vining peas where non viable enterprises are dropped by the processing firms. Growing and harvesting costs are similar in each case, but returns per acre from vining peas are almost double. As with vining peas the smallest acreage group has the highest yield and the second highest price so making the best profit of £13 per acre. The next size group makes a loss and the others only a small profit. Again, there is little evidence of increasing returns to scale, but the largest growers with better drying facilities get the best prices. Operational costs and labour requirements for dried peas are shown in appendix Table 3, and the range of yield, price, and profit in Table 4.

40 UPDATED COSTS AND RETURNS FOR PEAS FOR PROCESSING

Since the contract prices for peas and allowances for vining are known for any season before planting, the 1970 results can readily be updated for 1973, taking into account the present level of wage rates, machinery depreciation, and the price of seed and fertiliser (see appendix 5).

Contract Prices per ton for Processing Peas 1970 to 1973 , (Index 1970 = 100 in parenthesis)

, Type of pea 1970 1971 1972 1973 PRICE £ £ £ £ Canning 45.8 44.4 (97) 46.40 (101) 49.2 (107) Freezing 52.0 53.0 (102) 55.00 (106) 56.3 (108) Dried 47.5 .45.0 (95) 45.00 (95) 61.3 (129) VINING ALLOWANCE 11.2 11.7 (104) 12.75 (114) 14.4 (128)

EFFECTIVE PRICE . Canning 57.0 56.1 (98) 59.1 (104) 63.6 (112) Freezing 63.2 64.7 (102) 67.7 (107) 70.7 (112) Dried 47.5 45.0 (95) 45.0 (95) 61.3 (129)

Prices per ton for processing peas from 1970 to 1973 are given above. Vining allowances for canning and freezing peas may vary in detail but the effective price applies for those receiving the full allowance. In 1971 the contract price for canning peas fell and the price of freezing peas rose only slightly, reflecting the oversupply situation of 1970-1971. The canning price improved very slightly in 1972 but the freezing price rose more. In 1973 the price of canning peas was brought very much into line with that of freezing peas, while vining allowances per ton improved over the three year period by twenty-eight percent, with a big influence on the effective price. Dried peas fell in price in 1971, reflecting the supply position in that year. There followed a sharp increase in price for dried peas in 1973, in response to the higher level of cereal prices stemming from the rise of cereal prices under CAP, and from the recent rise in the world price of meat. Feed prices, which underpin the limit to which the price of dried peas may fall, also rose in 1973 as a consequence of high meat and cereal prices. In this year the processors were obliged to raise the price of dried peas significantly to acquire the supplies they needed.

,41 Table 24.PROJECTED COSTS AND RETURNS FOR VINING AND DRIED PEAS 1973 CROP.

, t , CANNING FREEZING DRIED

YIELD AND PRICE

Vining Peas 168a(167) Tons per acre 174a(203)

£ per ton 49.20 56.3

Dry Peas

Tons per acre 0.73 1.10 1.05a (0.9)

£ per ton 81.95 36.15 61.3

RETURNS PER ACRE £ f; £

Sale of vining peas 85.5 (99.9) 94.6 (94.0)

Vining allowance 11.9 13.1

Other allowances 1.7

Sales of dry peas 1.3 0.8 64.4 (55.2)

TOTAL RETURNS PER ACRE 98.7 (113.1) 110.2(109.6) 64.4 (55.2)

GROWING COST PER ACRE 23.7 25.4 22.8

HARVESTING COST PER ACRE 22.4 21.8 5.3

RENT AND OVERHEADS 20.3 17.5 16.9

TOTAL COST PER ACRE 66.4 (66.4) 64.7 (64.7) 45.0 (45.0)

NET PROFIT PER ACRE 32.3 (46.7) 45.5 (44.9) 19.4 (10.2)

a The five year average yield 1968-1972 MAFF Horticultural Crop Intelligence.

The figures and cost and return structure in parenthesis are based on the 1970 survey yield. Contract prices and vining allowances are applied throughout and costs have been raised to the 1973 level.

In the projected costs and returns for 1973 Table 24 above), the weather during the harvest, and the precise yield, cannot of course be predicted. Adverse• weather would add to harvesting costs and could depress yields. The projected results are given for two bases of yield, the recent five year average Crop Intelligence yields (see page 26), and in parenthesis, the yield in the 1970 survey. Costs of production since 1970 have increased by 17 percent for both canning peas and for freezing peas, and 8 percent for,dried peas. Profits per acre (with the five year average yield) in 1973 are likely to be lower than 1970 for freezing peas, but much better for dried peas. On the less likely assumption of 1970 yields, canning peas are shown to be more profitable than freezing peas with a lower profit for dried peas. Prospects for peas for processing as Britain enters the Common Market are promising(see Chapter 3), while those farms who are prepared to grow,market peas can also look forward to a good market.

42 CHAPTER 3. THE OUTLOOK FOR PEAS IN BRITAIN AND EUROPE

THE DEMAND FOR PEAS

Canned and frozen peas are convenience foods, defined in the National Food Survey as processed foods for which a degree of preparation has been taken to an advanced stage by the manufacturer, and which may be used as labour saving alternatives to less highly processed products. The implications of this for the pea market are important. Consumer preference for convenience foods in Britain and Europe will tend to follow the lead of the United States, and consumption trends in Europe,though far behind the States, are led by Britain. The consumption of processed vegetables in the U.S.A.(52 Kg per head in 1969, and fifteen percent above that of 1964) is three times the level in Britain (17 Kg 1967). In the original EEC combined;consumption is 12.4 Kg per head (1969) an increase of sixty percent on 1961. Individual country consumption figures showing the change from 1961 to 1969 are as follows(Kg per head):-

1961 1969

Holland • n.a. 15.0 For the Six together,

Western Germany 10.3 14.0 an increase of 60 percent

France 8.8 13.7 between 1961 and 1968 -

Belgium 7.8 10.5

Italy 2.8 9.7(two thirds are tomato products)

Western European countries are likely to follow the lead of the U.S.A. in the consumption of convenience foods, especially as disposable incomes rise, the principal object of the EEC. Factors associated with the value of convenience foods to modern living promote this. Urbanisation is increasing and more women are employed outside the home (in Britain over a third). This means less time for shopping and cooking and the need to buy time. It creates more demand for the consumption of processed foods incorporating the maximum service. Convenience includes self service shopping. Supermarkets already have over seventy percent of the food trade in Britain and a pack, convenient to the housewife,, also suits the trade by cutting distribution costs. At the same time eating out is increasing in working and leisure time, and convenience foods are preferred by canteens and restaurants for their availability and their time saving. In the U.S.A. one meal in three is eaten out; and in Japan -expenditure on food away from home is rising ten percent each year. Finally, the quality attributes of convenience foods are now given more importance. These include taste, dietetic value and health guarantees. There is every prospect that the demand for processed vegetables in Western Europe will increase and this is not the least affected by advertising. In Britain £6 million is spent annually advertising (predominantly of the brand type) frozen food products worth £50 million at retail and France spends £9 million in this way. In 1967 deep frozen products in Britain were virtually all vegetables, and fruit, though an expanding sector, was less than 2 percent. Of deep frozen vegetables, 59 percent are peas. In the market for deep frozen produce Britain leads Western Europe with 5Kg per head, but she is behind Scandinavian countries where fish play a dominant part. The most recently available figures of consumption(Kg per head) are:—

Sweden 12.8 Western Germany 3.4 Between 1966 and 1968 consumption in Belgium and Denmark 6.3 France 1.8 Holland doubled, and that in France increased by Norway 6.0 Italy 0.5 forty percent.

The lower demand in France and Italy is in part due to a less marked urbanisation, inadequate supplies of raw material, and insufficient freezing equipment in the shops and in the homes.

43 Supermarkets and Canteens

In the U.S.A., canteens and restaurants comprise two thirds of the rmrket, Germany sixty percent, and in France only a third. Raw material for deep freezing also provides ingredients for more elaborate and more expensive products. Freeze drying could provoke a substantial demand for specific products. Medium scale expansion is expected for canned and bottled products (bottled products are more important on the Continent than in Britain). This is especially so for peas, green beans, and mixed dried vegetables. The future pattern and movement of demand for processed fruit and vegetables depends on the impact of supply and response to national and international demand. The preponderant role and motive force of distribution in the processed food sector is a dominant feature affecting demand. Food retailing in Western Europe, following that in the States, has achieved concentration through successive mergers and trade agreements which in turn has encouraged the supermarket role. Self service stores increased ten fold in Western Europe between 1960 and 1970. Recent figures are:—

Market Share Sales points percent United Kingdom 70 350,000 (Supermarket only, 4,800) Western Germany 70 80,000

Holland 62 6,700

Belgium 25 2,400

France 23 17,000

Italy — moderate expansion only.

Distribution is dictated by national and international market organisations which organise their own production. The distributive sectors' hold on the processing market is strong in the United States, Britain and Holland. In Italy the traditional form of marketing still predominates. In the U.S.A. three firms have seventy percent of the market and though these firms have attempted to reduce competition through integration at the retail level, the balance of power is still held by the distribution sector. In Europe, two international concerns, Nestle (Switzerland) and Unilever (Britain) after fighting a price war, weed in 1969 to share the market for deep frozen produce in Germany, Austria and Italy. In 1970 Nestle negotiated with Roca (Switzerland) to reduce adverse competition through agreements on standards and service. The market in Britain is dominated by three multi-national groups, illustrating a concentration that will go further in Europe. International marketing is important and it can only be expected to become more so in the future. For instance peas processed by Findus (Nestle) in Sweden are sent to subsidiaries in Britain and Europe, especially to Germany and Italy. Green beans are part processed by Findus at Cisterna in Italy and are forwarded to Findus plants in Scandinavia, Britain and other European countries. Despite the keen competition, international agreements have reduced distribution costs and achieved greater market penetration. An example outside frozen products also illustrates the trend in Company linkage in Europe. Libby (U.S.A.) and Conserve-Gard (a French Co-operative) have arranged to market canned peaches through a network attached to Libby's.Commercial development of this nature will largely determine the export trade and the production in Europe. The policies of the Companies concerned will be related to comparative advantages in production and distribution, and company policy may be in conflict with that of national Governments. The countries in Europe with high industrial and distribution concentration, in the processed vegetable market are Britain, Sweden, Holland, Belgium, Switzerland, and Finland. Germany and France are in the process of attaining industrial concentration, and they have already achieved high concentration in distribution. Countries which cater for the export trade but have a poor domestic trade are Portugal, Greece, Spain and Yugoslavia.

The Demand for Peas in Britain

One important feature of the pea processing industry is its effect on stabilising food prices in Britain. Food expenditure per head rose from £1.80 per week in 1966 to £2.11 in 1970. Most of the extra cost came from price increases, but the real cost of food actually fell by one percent from 1966 to 1970. This was due to a twelve percent increase in the purchase of convenience foods and there was a decrease in purchases of seasonal foods. Within the convenience food sector, the biggest real increase in value between 1966 and 1970 was for quick frozen foods (38 percent). The increase in real value of canned and other

44 convenience foods was ten percent. Average prices for quick frozen foods from 1966 to 1970 rose by only seven percent, as compared with nine for canned foods, sixteen for other convenience foods, and fifteen for food as a whole., In 1971, the real value of food expenditure per head fell by one percent,due substantially to increasing efficiency in the production, manufacture,and distribution of peas. Expenditure on convenience foods per head varies over the country, and in 1970 ranged from 46p in the south west to 60p in the north, the opposite of seasonal foods. In 1970, there was a drop in spending on convenience foods, contrary to the upward trend of the previous ten years. This is accounted for as follows. In the early months of 1970, the price of convenience foods went up more rapidly than other food prices, and the increasing expenditure on convenience foods slowed down. In the second half of the year expenditure on convenience foods fell off. Thus recession in the demand for peas during 1970-71, which caused a reduction in the acreage contracted in 1971, had complex causes. It was partly due to price increases, to a good supply of alternative vegetables in the mild winter, and to a change in the pattern of demand for convenience foods. Many consumers spend a residual amount of their income on convenience foods, and their main spending is committed in other directions. This is especially so during times of marked price inflation, when the most sensitive product is the frozen pea. A recovery in the amount of quick frozen peas purchased took place in 1971 to reach the level of 1.1 oz per person per week, which is explained by their relative fall in price,but purchases of other quick frozen vegetables were maintained. Between 1966 and 1970 purchases offresh peas continued to decline, dropping from an average of 0.69 oz per head per week to 0.42 oz in 1970, and supplies from gardens and allotments also_fell. Purchases of quick frozen peas made a further gain, from 0.94 oz to 1.02 oz, and those of canned peas rose from 2.9 oz to 3.2 oz due to the continuous decline in their real price. There was little change between 1966 and 1970 in the percent of households buying peas, which emphasizes the problem which manufacturers of canned and frozen peas must overcome if the market is to expand, they must sell to a wider market. In contrast to fresh peas, consumption of fresh beans was maintained at about 1.3 oz over the five year period with no decline in garden production, despite rising consumption of quick frozen beans"(0.2 oz t6 0.3 oz) and of canned beans, mainly baked beans, from 3.2 oz to 3.9 oz. Consumption of dried peas continued to decline from 1966 to 1970 but at a diminishing rate, averaging 0.40 oz per person per week in 1970 compared with 0.42 oz in 1966, and 0.58 oz in 1960. Purchases of air dried vegetables remained at 0.04 oz per head per week. In the market for processed peas, manufacturers have all the sales advantages associated with convenience foods, but this market is quite sensitive to price. In the years of decreasing real price at retail, market expansion was straightforward but this time is now passed. One limit to increasing the market for the frozen pea, not applying to canned peas, is lack of refrigerators in the home. In 1971, two thirds of the homes in Britain had freezers, as compared with a half in 1966, and a quarter in 1961. A serious limit to supplying every home with a freezer is the dwindling size of the kitchen in new houses and the Competition of other equipment for the available space. The problem is even more serious for the deep freeze than for the conventional refrigerator. - The distribution system for all types of processed peas is perfected through supermarket and grocery chain links with the manufacturer and the trade. The fresh pea will continue to sell as a scarce good, even in the supermarket, where it commands a premium pride over frozen peas. While the market for the processed pea will continue to expand on the grounds of convenience, the future for each pea product will be greatly affected by its price in comparison with the others. Five products are distinguished, the frozen pea, the air dried pea, the canned green pea, the canned processed, and the dried pea. The consumption of processed vegetables in Britain in recent years is given in Table 25 below.

Table 25. CONSUMPTION OF PROCESSED VEGETABLES IN BRITAIN 1967 TO 1971 (lbs per head per year) 1967 1968 1969 1970 1971 Canned

Peas 9.75 9.88 10.11 10.43 9.29 Beans 11.35 11.35 11.58 12.50 11.70 Other vegetables 5.39 5.73 6.31 6.42 6.19

Total canned vegetables ' 26.49 26.96 28.00 29.35 27.18 Frozen

Peas 2.99 3.31 3.54 3.32 3.67 Beans 0.59 0.91 0.91 0.91 0.91 Other vegetables 0.58 0.81 1.14 1.36 1.36 Total frozen vegetables 4.16 5.03 5.59 5.59 5.94 Source. 0.E.C.D. and MAFF National Food Survey 45 The demand for canned vegetables has increased steadily in recent years, though considerably less than that of frozen vegetables. The striking developments in the range of processed foods, however, make comparisons between products difficult. Consumption per head of canned vegetables in Britain over the last eight years has increased by 23 percent or 2/12 percent per year to 16.3 Kg. but that of frozen vegetables has increased at almost twice that rate (4.5 percent per year), to 3.2 Kg per head. By contrast dried legume consumption (mainly peas) has fallen from 3.7 Kg per head eight years ago to 3.1 Kg now. The future demand cannot be forecast with a great degree of reliability because of changing conditions in the industry and in consumer expenditure. As we enter the E.E.C. several dependant variables are uncertain. These include product prices, income growth and price and income elasticities. There is most likely, however, to be a further increase in the demand for frozen vegetables, a smaller one for canned vegetables as a whole, and a decline in demand for canned and other dried legumes. Developments in the food processing industry have greatly affected vegetable production in Britain. Over 200 thousand tons of green peas were processed in 1971 compared with 113 thousand ten years earlier. In 1970, 182 thousand tons (net can content) of dried peas and 104 thousand tons of green peas were canned, well over a third of all canned vegetables. In the same year 90 thousand tons of green peas were quick frozen (nearly a half of the quick frozen vegetables). Canned vegetables are by far the most important with a total production of 790 thousand tons, having grown from 640 tons in 1963. Beans in sauce and processed peas are still more than half of the increase value whereas dried peas for processing seem to have passed their peak. This is due to the popularity of green peas for canning (production has increased by a third in the last eight years) and of quick frozen peas, the production of which has doubled in this time.

Farm Gate Price and Retail Price The farmers' product, cleaned peas for canning and freezing or graded peas for processing or for , packing dry, as implied by the manufacturing process, represents a low proportion of the final costs of the product at retail. This proportion varies most with peas for canning, from 25 to 32 percent, reflecting differences in individual firms, for freezing it is between 14 and 15 percent indicating the evenness of the business structure in this sector. For packed dried peas the proportion is 19 percent (8 oz pack) and 21 percent(16 oz pack). Processed peas vary little in retail price over the year, though the smaller packs are proportionately more expensive. On the fresh market the price level varies according to the season and is higher in seasons of good quality. In these seasons market peas gain a premium over the frozen pea whether sold loose or prepacked. The retail mark-up for peas in the pod is similar whatever the price, for instance, it is 2.5p a lb when the wholesale price is 2.5p and much the same when the wholesale price is 4.5p. The farm gate price of market peas in relation to retail price ranges from 40 to 50 percent.

The Oncost of Manufacture Attempts were made to find the cost structure in manufacture but all the large firms shrank from disclosing information. The entry of farmers into the manufacturing market with the help of freezing companies like Frigoscandia and Christian Salverson, brings to light the manufacturing costs of frozen peas. The following gives the cost structure of frozen peas (cost at manufacture = 100) based on the throughput of 1 ton of peas:—

Percent of Cost at Manufacture Peas delivered 45.3 Processing and cleaninga 21.1 Freezing 2.1 Packing 8 oz packb 15.9 Packing materials 9.3 Overheads 6.3 1 00.0 a 14 percent loss — A or higher quality b 8 percent loss

Storage adds to costs by from 2 to 3 percent per month.

This data brings out the comparatively high cost element of material as a proportion of the product cost at manufacture, the amount of wastage after the peas have left the farm, and the incidence of costs of storage. At the manufactured stage (per ton of peas processed) when peas are purchased at £.57 a ton delivered, the cost of the manufactured product is £,126. Twelve months storage would bring this up to 46 £162, and the manufacturers margin is some £30. Margins and costs in distribution bring the total retail value from a ton of peas to £400.

PEAS IN EUROPE

The pea industry in the Common market, other than Britain, differs from that of the United Kingdom in several important ways. In Europe peas are a more important part of the vegetable proceing industry in which canning dominates, while bottling accounts for twenty percent of the industry in West. Germany and Italy, and forty percent of that in Holland. Quick freezing on the Continent is relatively less important. In addition, production and processing are also on a smaller scale in Europe. But perhaps the most important difference is that associated with consumer preference, national gastronomic habits in Europe are markedly different from those in Britain and there are also some differences in the countries (though less marked) within Europe. Eating habits are associated with the vegetable production in each country which is so largely determined by climate. Here in Britain we prefer the green sweet pea (dried peas apart) whereas other members of the Community prefer a pale less sweet pea. The varieties of peas grown are quite different. In Britain we grow the wrinkled type and in Europe the smooth pea predominates (exclusively in France for instance), but in Germany a third of the production is of wrinkled type and the remainder smooth. Of great importance to peas in the Common Market is that Britain cannot yet grow the smooth (continental type) pea to achieve the same yield as this pea on the Continent. Similarly, the wrinkled pea does not grow on the Continent with the same degree of success. This has far reaching implications for the Common Policy for peas which will be taken up later. Britain is the only country within the Community to produce frozen peas in quantity (79,000 tons in 1971). Small tonnages are produced in Holland, West Germany and France. The following table from a Belgian report (L:Industrie Beige des Conserves de Legumes 1969) serves as a useful introduction to the vegetable processing industry from which the present situation for peas in Europe is developed.

Processed Vegetable Population Exports Imports Production-percent Percent '000 tons '000 tons , France 52 27 68.2 13.1 Germany 22 33 0.9 199.5 Belgium 10 5 54.0 12.6 Netherlands 10 7 42.4 28.5 Italy 6 28 7.6 0.9 100 100 173.1 254.6

This shows (1967) France with rather more than half the processed vegetables production and Germany with over a fifth, as the biggest producers. Holland and Belgium each account for ten percent, but in Belgium the concentration of production is higher than France. In Italy processing is little developed but this country has the biggest potential for development. The figures for exports and imports emphasise the importance of trade in processed vegetables between the Six. Germany is the big importer and she exports little. France is the biggest exporter, followed closely by Belgium and Holland where the industry is even more export based than that in France. Trade is principally with West Germany, but all countries, with the exception of Italy, play a part in trade in processed vegetables. A French Report (Le Marche du Pois de Conserve 1971) gives the following information for processed pea production in the Six and in the Ten.

47 The Six The Ten Total Production (tons) 419,000 715,000 Consumed in:— Percent Percent France -56 France 31 Germany 7 Germany 4 Belgium 16 Belgium 9 Netherlands 10 Netherlands 5 Italy 11 Italy 6 Britain 42 Irish Republic Norway 3 Denmark 100 100 (Another 12 percent exported) (Another 8 percent exported)

Production in the United States is 443,000 tons and that for the rest of the world is estimated at 787,000 tons.

The table above shows the proportion of total production and imports in the Six and in the Ten. Since the production in Norway is much less than one percent of the total,the structure for the Nine may be regarded as that of the Ten. The entry of Britain is a major factor in the enlarged Common Market for peas. This has much greater importance than implications for the agricultural sector alone. The industry is a big employer of labour and capital in manufacture and distribution, and it represents a significant and rising proportion of the food sector of the Common Market Economy. Table 26 below gives the production and trade in Europe for all types of peas, going back to 1968 in the case of fresh green and dried peas for the sake of completeness as more recent figures are sketchy. British production and imports of processed peas from 1962 to 1971 and the most recent data available for the whole of British trade in peas, are shown in Table 27.

48 Table 26. PRODUCTION AND TRADE IN PEAS IN EUROPE

A. Fresh and Dried Peas (1968)

\ ' Area Yield Production Imports Exports '000 acres tons per acre '000 tons '000 tons '000 tons Fresh Green Peas

United Kingdom 127.0 1.9 236.2 14.3 Belgium , 22.2 5.8a 127.1a 3.0 0.3 Denmark 7.4 1.9 11.8 France - 118.6 6.0a 378.9a West Germany 22.0 4.1a 90.8a 1.4 Italy 131.0 1.8 239.9 1.3 Netherlands . 17.3 4.3a 74.8a Norway • 2.5 . 2.6 3.9 , Spain 44.5 1.9 85.6 2.9 . Sweden 19.8 1.5 . 28.5 Peas Harvested Dry . 5 United Kingdom 49.4 1.0 56.9 51.2 - Belgium _ • 12.4 1.2 14.8 22.7 17.6 France 12.4 0.9 10.8 . West Germany 12.4 0.9 11.8 Irish Republic 4.9 1.2 5.9 Italy • . . 19.8 0.4 7.9 Netherlands - 27.2 1.3 35.4 Sweden 5 17.3 0.8 11.8 a in pods B. Processed Peas(1968 and 1970) 1968 1970 - Production Imports Exports Producen, ImpOrts Exports . . • '000 tons '000 tons '000 tons '000 tons '000 tons '000 tons 4-..- . Canned Green Peas United Kingdom 68.2 0.9 _104.4 0.9 Belgium 4.5 • 38.4 _ 2.4 44.6 Denmark . 8.9 France 238.7 1.0 31.9 ' 0.1 52.9 West Germany 46.0 49.0 0.03 28.9 60.0 0.25 Italy • ' 45.3 1.2 3.0 3.2 0.8 Netherlands 66.3a 14.0 8.1 46.3 16.9 - 6.1 . Norway 5.0 , Canned Processed Peas United Kingdom 175.2 182.5 France 0.7 _ Netherlands 5 23.0 Frozen Peas . United Kingdom 77.7 22.1 89.4 -13.6 Belgium 0.7 0.5 0.9 1.2 Denmark 3.8 4.8 West Germany 5.9 6.9 0.07 9.5 7.3 0.4 Netherlands 3.4 1.2 Sweden 14.8 13.0 a Total for processing Complete data is not available. Source. Campden Food Preservation Research Association. The European Market Part IV Nov 1971. 49 Table 27. BRITISH PRODUCTION AND TRADE IN PEAS AND OTHER PROCESSED VEGETABLES BT TYPE AND TRADING AREA

A. UK Production and Imports of Canned and Frozen Peas. 1962 to 1971 • ('000 tons net can contents) • 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971_ Canned Peas Processed 188.0 180.1 177.4 181.6 191.5 174.0 175.2 192.4 182.5 168.6 Fresh 63.8 81.5 87.3 73.8 89.3 90.5 68.3 84.7 104.5 86.1 Total U.K. Production 251.8 261.6 264.7 255.4 280.8 264.5 243.5 287.1 287.0 254.7 Imports . 0.7 1.5 0.9 2.4 0.7 1.0 0.9 0.8 0.9 0.8 Frozen Peas U.K. Production 56.4 47.5 54.9 50.5 61.0 66.1 77.8 88.5 89.4 77.7 Imports n a n a n a 12.8 16.4 * 22.8 22.1 17.9 13.6 2.2 B. UK Imports and Exports of Processed Vegetables 1971 . EFTA EEC Commonwealtha Other Total IMPORTS tons £'000 tons £'000 tons £'000 tons £'000 tons £'000 Airtight Containers Total 38579 4363.5 74960 7419.7 2354 617.1 70248 6868.5 186141 19268.8 of which peas 59 10.0 599 85.9 12 1.8 163 15.5 833 113.2 Frozen vegetables 381 61.1 7120 1146.0 1742 306.0 11687 1931.6 20930 3444.71 of which peas - - 23 3.4 32 6.5 2132 259.8 2187 269.7 Dehydrated vegetablesb 88 51.9 1836 798.0 5022 1237.3 13675 4143.4 20621 6230.6 Dried peas and-beans 91 . 11.6 4480 647.1 53243 5628.5 80557 8644.8 138371 14932.0 of which split peas - - 597 71.2 2027 178.7 350 28.6 2974 278.4 whole peas 10 1.4 1485 160.7 7592 703.5 26420 2417.8 35507 3283.4 other peas 2 0.3 116 17.5 7002 411.3 3726 193.3 10846 622.4 _ EXPORTS CannedaVegetables 1813 231.8 5560 631.4 9902 1529.1 5108 736.1 22383 3128.4 of which peas 41 3.7 897 74.7 983 99.2 660 67.6 2581 245.2

Frozen Vegetablesb 366 77.3 2341 385.9 1313 281.4 4450 782.7 8470 1527.3 . ,

Dried Vegetablesb 409 104.6 61825 2582.4 2608 321.8 23006 1195.5 87848 4204.3

Othpr vegetable products 2401 387.7 1892 322.6 3120 890.5 7610 2210.4 15023 3811.2 a Commonwealth and Associated British States b Peas negligible or nil Source. Campden Food Preservation Research Association. The European Market Part IV Nov 1971

50 France

France grows 105 thousand acres of peas for processing, yielding 160 thousand tons of shelled peas. Quality has been continuously raised to give (in 1970) an exceptionally high standard, fifty three percent in the very fine or extra fine grades. Three areas, Picardy, Brittany and Nord, account for ninety-five percent of the production, and Picardy alone grows fifty percent. Production of canned peas has increased greatly in recent years, from 164 thousand tons in 1960 to 250 thousand tons in 1970. Twelve firms manufacturing over five thousand tons account for eighty percent of the output. Of the fifty or so firms manufacturing peas (1970), most are in private hands but co-operatives account for a fifth of the turnover. Co-operatives have a high investment rate due to government aid, but since 1960, rationalisation has almost halved the number of private firms, as well as the number of factories. The efficiency of the manufacturing industry has increased, but the firms remain small by British standards. Half the canning is peas alone (au naturel, as in Britain) and half uses the juices of other vegetables l'etuv6e). French people mostly eat steamed peas prepared with lettuce and onions which the housewife warms up by using the juice contained in the can. In 1970 the production of canned peas was 246 thousand tons, of frozen peas, 18 thousand, and of dehydrated peas, 1260 tons. Less than forty percent of the peas produced are now marketed in France. Exports are (1970), F386 million, of which F267 million go to the EEC. Imports of processed vegetables (1970) are worth F312 million, F85 million from the EEC,and F138 million from the Franc zone, which includes more exotic produce. The processing of vegetables is a big industry in France. Its annual growth rate since 1960 has been eight percent and a seven percent rate is forecast to 1975, with three percent for peas. Exports in 1970 were a ninety percent increase on 1967. Over half of these exports (135 thousand tons in total) are peas and three-quarters go to Germany. Canned pea exports have risen substantially, eightfold from 1964 to 1970. This is acknowledged by the French to be due to the remarkable scope offered by outlets in the Community. Markets in the Franc zone remain stable and those to third countries are declining. At the same time, imports in 1970 had increased by forty percent since 1967. The increase is evident for all processed vegetables, but EEC imports have increased most. On balance the French trade (1970) is in surplus by F73 million, thanks to the scope of Community trade (F140 million in 1969). The processed vegetable trade comprises substantially, mushrooms, beans, and canned peas, of which the biggest part is canned peas.

Western Germany

Pea production is not so concentrated in Western Germany, forty percent is in Lower Saxony and twelve in Bad Wurtenburg, The German processed vegetable industry is dominated by spinach (sixty percent) but the production of peas is increasing, from five percent of the raw materials used in 1964 to eight percent in 1969. Processed vegetable production in Germany reached 311 thousand tons in 1967 from 187 in 1965, but the trade since then has been under heavy pressure from imports from France, Holland, and Belgium. The German market for processed vegetables is known for its constant expansion, but this has not been to the benefit of the German industry. Canned peas are popular and frozen peas have reached a higher level of consumption than elsewhere in the Six. The apparent consumption of canned peas in Germany is high (100 thousand tons in 1969) but frozen peas and more elaborate processed produce incorporating peas are on the increase. The experts are certain that the inclination shown by consumers for the finest gradings of canning peas, which for several years has gone hand in hand with a higher standard of living and a refinement of taste can only go on increasing. At the present time, the fine peas are consumed in the northern parts and the medium in the south. In Germany the water cooked (au naturel) Pea is the most popular. Fruit and vegetable processing is one of the more important sectors of the German food industry, with an output £30 million in 1971 and employing nearly 30,000. There are now 450 firms (1971) and modernisation is in progress. The industry has been badly hit by competition from all over the world, in particular from the EEC,and Eastern European countries which practice low price policies. Canning is done by medium sized, often family firms and few are solely in vegetable canning. In 1970 there were 108, canning firms with a remarkable output of £90 million but since then market pressure may have reduced their number. Deep freezing is more concentrated and is carried out by a few large firms. A third(1971) of the frozen peas(a new industry in 1965) are processed co-operatively. Consumption of frozen vegetables in Germany, 75 thousand tons, is now 1.6 Kg per head (1971), and it is rising as fast as supplies increase and consumption is forecast at 160 thousand tons within the next few years. Imports of canned peas increased from forty three thousand tons in 1966 to sixty thousand in 1969 and virtually all come from the EEC, 48 percent from France and forty percent from Belgium. Germany imported six thousand tons of frozen peas in 1966 and nine thousand in 1969 but only eighteen percent of these came from the EEC. Forty percent came from Hungary (1969), eight from Britain, another eight from Denmark and twelve from Sweden. German exports are small, and incidental only to her geographic position which so favours imports. In 1969, 152 tons of canned peas and 578 tons of frozen peas, were exported. 51 Belgium

Belgium -grows 23,000 acres of peas for processing, three-quarters of which are in the Walloon and the remainder in Flanders. Between 1960 and 1969 the production of canned vegetables doubled to reach 177 thousand tons in 1969. The production of canned peas in 1969 was 70 thousand tons, sixty three thousand tons were exported and six thousand imported (from France and Holland). Rather more than half the exports go to Western Germany, a quarter to Holland and an eighth to Italy. The exports to Britain which during the 1950's were an important market, are now negligible. During the last few years the Belgians have concentrated their efforts on the E.E.C. countries and some countries with an important buying power, such as the U.S.A.(over three thousand tons of processed vegetables in 1969), Canada and other countries outside the EEC(20 thousand tons or nearly twenty. percent of her exports of processed vegetables). Processed vegetable production in Belgium comprises forty percent peas and twenty'percent peas and young carrots, a pack which is becoming increasingly popular. Consumption of canned peas in Belgium, runs at some thirty thousand tons a year, and finer grades, mostly extra fine and very fine are in the greatest demand, particularly in hors d'oeuvre, while the coarser grades are ideal for soup. Demand in Belgium 'is almost exclusively for petits pois au naturel, and demand has been increasing at between four and five percent per year. Manufacturing is concentrated in Belgium and nine firms producing over five thousand tons account for ninety-five percent of the output. Luxembourg grows only twelve acres of peas for processing.

The Netherlands

Holland has seventeen thousand acres of peas for processing, amounting to a third of all vegetables for processing. Half the peas are grown and processed in the region of north Brabant and the north of the country has another well-known centre of production. Unlike Belgium, processing in Holland is concentrated in the areas of production, and virtually all the peas are grown by co-operative contract. Of the hundred firms concerned, the survivors in an industry of several hundred firms in 1960, sixty firms now manufacture ninety-five percent of the output. The processing industry is diversified with fruit and vegetables having equal emphasis. There are two types of company, the large international ones and the smaller long-established Dutch ones, often family based. It would seem from this structure that the pea industry in Holland is the most efficient in Europe. The industry in Holland doubled its output between 1960 and 1970 to reach £80 million in 1969, half of which is canned vegetables. Holland manufactures 41 thousand tons of canned peas, and she imports 20 thousand, from Belgium (mainly) under brand names,and from France. In 1967, 1968 and 1969 small consignments of canned peas came from Britain. Holland exports 12 thousand tons(1969) of canned peas, mainly to Western Germany. Consumption is high at 44 thousand tons, and the Dutch prefer petits poi's au naturel. The small proportion of steamed peas sold are imported. They like peas processed with other vegetables, while pea soups are most popular in Holland. Holland imports(1970) small quantitites (800 tons) of frozen peas, mainly from Belgium, and she exports 1200 tons.

Italy

Italy is second to Britain in acreage (152,000), and three-quarters of her production goes on the fresh market. Peas for processing (37,000 acres, in 1970), gown principally in the north of Italy, are increasing, and the tonnage manufactured rose from sixty thousand in 1964 to ninety thousand in 1968. Information on the pea industry in Italy is limited, partly on account of its recent development and small size. The industry is, however, being rapidly developed now with the use of foreign capital. Large scale production, so far as it exists, is by international companies, who also grow the peas. Imports of canned peas are over fifteen thousand tons (1969) mainly from Belgium and France. The Italians prefer peas au naturel. Quick frozen pea production is in its infancy, Italian production was less than three thousand tons in 1968, imports were thirteen hundred tons and exports four hundred tons. Dehydrated pea production is also developing, output in 1968 had reached ten thousand tons. Dehydrated peas were introduced in Italy in 1961 by the Belgian firms Monjardin and Lusuco and were immediately successful owing to their price which was lower than that of canned peas. According to official forecasts the consumption of preserved peas should reach 80 thousand tons by 1975, and that of frozen peas 8 thousand,from 4 thousand tons in 1969.

The Irish Republic and Denmark

Eire has little developed vegetable processing industry. Twenty-seven processing factories in 1967 manufactured twenty-five thousand tons of processed vegetables. Eirin foods, associated with the Irish Sugar Company, manufacture half of the total. The remainder is produced by Companies associated with Batchelors (U.K.), Knorr (Switzerland), Campbells (U.S.A.) and other such Companies. Ireland imports to

52 meet her needs. Her total imports of processed vegetables amount to fifteen thousand tons(1968) and she exports eleven thousand tons, of which four thousand are frozen. Denmark has a small production of canned peas (sixteen hundred tons in 1969) as part of a much bigger (twenty-two thousand tons) processed vegetable production. Imports and exports of canned peas in Denmark are almost negligible. Like Holland her range of processed vegetables is great, and peas would seem to be less popular than other processed vegetables. Almost all Denmark's production is in private hands, and mergers between firms have taken place and some firms have agreements with the Swedish Company, Findus. In the Community, Danish production of canned and frozen peas ought to remain at its present level and possibly increase a little.

Sweden

The Swedish production of processed vegetables exceeds one hundred thousand tons a year. Of this (1968) thirty-five thousand are canned vegetables and thirty-thousand are frozen vegetables. Peas for canning and freezing are grown on fourteen thousand acres(1968). Cooked dishes and other products using peas are rapidly increasing(fourteen thousand tons in 1968). Sweden pioneered frozen vegetables in Europe and(1968) .manufactures eighteen thousand tons of frozen peas, only importing a balancing quantity,but she is an important exporter to other countries in Europe. Exports to Italy alone in 1970 reached over four thousand tons and she has traditionally exported to Britain through Findus. Sweden's consumption of frozen produce, 15.6 Kg per head in 1970, is expected to reach 23 Kg in 1975. Forty-six factories process food in addition to fish and the most important are grouped in a Swedish federation, but Findus has half the acreage. According to the experts if,Sweden joined the Community she would become one of the major suppliers of peas. Currently, exports to Italy of frozen peas are increasing despite the Common external tariff. If Sweden can successfully export to the most remote (from her) Community country against the tariff it is worth speculating what she could do in the nearer countries without the tariff. Her present activity in the export trade is a tribute to Swedish excellence in the production and manufacture of the frozen pea and the economic advantage of having a large fish freezing industry to which peas are supplementary. - Community imports and exports of processed peas from 1964 to 1969 which summarise the big changes in the trade in Europe in recent years are given in Table 28. Table 28. COMMUNITY IMPORTS AND EXPORTS OF PROCESSED PEAS 1964 TO 1969 Imports - To West Belgium France Italy Netherlands . Total From Germany - 1964 1969 1964 1969 1964 1969 1964 1969 1964 1969 1964 1969 West Germany - - - 0.1 -.------0.1 Belgium 14.2 24.2 - - 0.3 0.5 - 6.0 5.7 13.0 20.2 43.7 France 379 28.0 - 3.6 - - - 04 - _ 2.8 3.9 34.9 Italy - 1.1 ------1.1 Netherlands 4.2 4.8 , 0.1 1.1 - - - 0.6 - - 4.3 - 6.5 Total EEC Countries 22.3 58.1 0.1 4.8 0.3 0.5 - 7.1 5.7 15.8_. 28.4 86.3 Third Countries 0.5 1.4 - - 0.8 - - 0.1 - - 1.3 1.5 Total Imports 22.8 59.5 0.1 4.8 1.1 0.5 - 7.2 5.7 15.8 29.7 87.8 Exports

From West Belgium France Italy Netherlands Total To Germany

1964 1969 1964 1969 1964_1969 19.64 1969 1964 1969 1964 1969 West Germany - - 16.1 26.5 3.7 32.1 1.2 4.3 5.2 24.1 65.0 - . Belgium - - - 0.1 3.9 - 0.1 1.1 0.2 .5.0 France - 0.4 0.6 - - 0.4 0.6 Italy - - 2.9 6.4 0.7 - - 0.1 0.5 3.0 7.6 Netherland - 6.1 14.0 2.7 - - - 6.1 16.7 Total EEC - 25.5 47.5 3.8 39.4 1.2 4.5 6.8 33.8 94.9 Third Countries - 0.1 3.3 2.7 4.1 3.5 0.4 1.6 3.5 9.0 10.2 Total Exports 4 - 0.1 28.8 50.2 7.9 42.9 1.6 6.1 10.3 42.8 105.1 Source. Le Marche du Pois de Conserve UNILEC Paris 1971 53 COMMUNITY REGULATIONS FOR PEAS

Consistent with the Treaty of Accession, there will be no tariff restrictions on trade between Britain and the rest of the Community from January 1st 1978. The present tariffs will be gradually removed in five stages over the transitional period starting on January 1st 1974. It is a tribute to Government negotiation that the tariff changes for fruit and vegetables should occur a year later than for other agricultural produce. British tariffs on trade with third countries will begin to move to the level of the Community Customs Tariff as from January 1st 1974. Changes will similarly be phased over the transitional period and the full Community tariff will be applicable from January 1st 1978. The Community tariff will be applicable from January 1st 1978. The Community tariff for most vegetables is at a higher rate than the present United Kingdom tariff. The British and the Community tariffs on peas are shown below.

The British and the Community Tariffs on Peas

UK TARIFF COMMUNITY TARIFF

Fresh unshelled Fresh whether or not shelled percent percent

1 June to 31 July L0.9330a 1 June to 31 August 17 1 August to 31 May 10 1 September to 31 May 10

Frozen 10 Frozen 18

Dried shelled Dried shelled

split peas • 15

whole peas(other than L0.3750a peas of a variety or 10 commonly known as whichever 4.5 maple, dun or yellow is the or white peas) greater

other peas 10

Otherwise preserved peas 10 Otherwise preserved peas (including canned) Petit pois 24 Other 22

a Where sterling values are given, this is per cwt.

All the Community tariffs are similar or higher than those of the UK, except for the tariff on dried peas, which is slightly less than half. The tariff on frozen peas is almost double, and that on processed peas is higher still. For Britain by 1978 all trade in peas within the Community will be free of tariff. Quotas on the quantity of peas imported (from the Eastern Area) were abolished in ac-cordance with Community policy on February'1st of this year. Community standards are to be implemented for green peas for shelling on February 1st 1975 to which Britain will have to comply. For peas the Community food legislation is of more consequence and considerable negotiation is taking place to find agreement between the different sets of national and local standards and preferences. It is expected that there will be more liberal use of "optional harmonisation" which allows the coexistence of a Community standard and a national one. Such harmonisation permits the production of a particular product to continue in its present form for domestic consumption. This has particular relevance for peas, for Community food legislation left to itself, could insist on standards for member countries with which the member could not possibly or economically comply. There are differences between British Food standards and the Continental ones, normally based on the codex system, and differences occur in colouring and pack sizes. The Community standards for processed vegetables have not yet been established, but decisions on permitted colourings are vital to the British pea canning industry. In Britain there is widespread use of colouring in peas and cans Are based on internationally accepted sizes which do not coincide with the Continental proposals. If the use of colouring were forbidden in canning or 54 can sizes be changed as has been suggested, this would have the most serious consequences for processors and growers in Britain, because a big market would be lost, and changes in can size would require costly investment in plant.

OUTLOOK FOR PEAS IN EUROPE

It has been shown that there is an expanding market for peas in Europe with complete free trade within the Community by 1978. The concept of one market and equal competition among the countries of the six is however, debatable. This was raised by a Belgian visitor last year who claimed there is one market in theory but six (1972) different markets in practice. That there is some truth in the contention is borne out by the market for peas in Europe in the last decade. A German processor visited last year, complained bitterly of the imports of canned vegetables at low prices and of peas in particular. His complaints were mainly directed against France, but they also applied to other Community countries,and to Eastern area countries, who practise a low price policy to acquire hard currency as well. He maintained that the French industry has been given financial support by the Government in a number of ways and that the French manufacturers took advantage of the changing currency situation to sell cheaply in Germany. Official sources state that the price of canned vegetables in Germany in 1972 was the same as it was in 1962. It is no wonder then that in February 1973, the German Government announced a L11h million subsidy to the canning industry in Germany. This subsidy is to take the form of a reduction on loan capital interest for re-equipment, and it follows a smaller subsidy of £300,000 in 1971. The new subsidy was occasioned by pressure on the Government by processors and farmers. A condition of the arrangement was that the processing firms should offer contracts for the 1973 crop at least the same acreage as 1972, so that both the processor and the producer benefit from the scheme. In reality, so far as Western Germany is concerned, the Common Market membership has led to a serious depression both in the manufacturing and in the production of peas. While member governments will do what they can independently for the industry and the Common Market effects are not seen as being equal to all countries, the level of Community tariffs are seen to reflect the strength of the processing industry within the Six, and in particular the agricultural politics of France, so high is the tariff on canned and on frozen peas, and so much over the tariff on imported dried peas. What is important for Britain is that the is now in the free trade club, or will be completely in four and a half years time, when the high tariffs formerly against her will have disappeared. This new situation ot course works both ways. Lower tariffs (the existing U.K. ones), now against the Community will disappear on trade with the Community. What is Britain's position in the pea market in Europe likely to be by 1978 and what are the threats which Europe offers to her domestic market? Briefly, Britain's opportunity to keep her own (and expanding) domestic market for processed and freezing peas is great, and she will have the opportunity to increase exports of frozen peas, perhaps considerably in Europe and in particular to Germany, with some possibility of exporting canned peas. Underlying this contention is the high level of efficiency and low cost at the production and manufacturing level in Britain. The climate for peas is not surpassed in Europe except possibly Sweden (where the summer temperatures are slightly higher) but where the acreage of peas is limited, and which in any case is on the other side of the tariff fence. Our soils and our large scale of production are not equalled in Europe, we have a higher level of investment in the factory and in the farm which makes our raw material and manufacturing costs highly competitive. In addition peas are grown on the large arable farms, perhaps the strongest sector of our agriculture as we enter Europe. The production of peas is complementary both in the sense of farm organisation and management, to the main cereal enterprises whose outlook in Europe is good. No-where in Europe is the farm base for pea production equal to ours. The market in Britain and in the other member countries, as has been shown, is influenced greatly by national preferences and tastes. Accepting this, it is clear that the frozen pea, rising in demand in Europe, will be wanted in larger quantities than Europe can supply, and that Sweden, the traditional exporter (farther away from Bonn than is East Anglia) will be handicapped. Canned peas are rather a different matter. To export canned peas we need to compete in an existing market, and against established preferences, and this should be attempted in earnest, not forgetting our big home market. Differences in preferences associated with the canned pea which we encounter in exporting to Europe make for the same difficulties for Community members who-will try to sell to us. ft is most important first, that we defend our large home market for canned peas, while investigating to see whether we can manufacture economically a product which appeals to other members of the Community. • While the future market for processed peas (including imported dried peas) is likely to be good, perhaps very good, the future for the producer of dried peas in Britain is very debatable. From the point of view of scale and association with the arable farm, production is efficient, and low cost.(A break crop is necessary and dried peas have much less risk for instance than Brussels Sprouts.) However, the quality of the dried pea remains the weakest factor, because our climate, excellent for other peas does not produce dried peas of consistent and reliable quality. Put the other way round research, though making good efforts has not yet succeeded in finding a variety suitable to the processors' needs. The low Community tariff will 55 inevitably invite more competition in the supply of dried peas from existing exporters(to the benefit of the pea manufacturers), but supplies will not be forthcoming from the Community. Entry to the Community has diminished the prospects for dried pea production for processing but other factors are working in favour of the dried peas as a source of feed protein. We already have an established export of feed peas in Europe, particularly to Holland, which can only benefit as we change to free trade with Europe. But the longer term trends affecting the price of feed protein, in Europe and throughout the world, greatly improve prospects for the British grown dried peas. As this report goes to press open market prices offered for the 1973 crop are higher per ton(£80 to £90) than the much improved contracts (£70) concluded for 1973 as compared with the much lower contract prices for 1972 and 1971. How long the sellers' market will exist for dried peas cannot be foretold, but unless and until Community Cereal prices are lowered, and unless(which is unlikely) there is a recession in the price of livestock products in the Community, the price of dried peas is likely to remain well above the 1970 level for some time to come. International firms like Birds Eye Foods and Findus Ltd, are likely to make advances in Europe in frozen peas, and they have the big advantage of an established sales network, which the canning industry too will have to acquire (perhaps with difficulty) if they are to penetrate the European market. Taking all points together, however, British farmers and British manufacturers enter the Community with strength. There is every prospect of expanding the market at home and no apparent reason why expansion into Europe should not take place as well. Within the Community the pea industry is well sheltered from competition from third countries, and the level of competition, so high between states, will remain so. There has been a completely new balance of trade in peas in Europe since the Common Market of the Six was established, with Germany, the biggest market, losing most. Germany has taken steps to recover her position which will be at the expense of neighbouring Community countries, who have all but destroyed her market. Within Europe in particular, the outcome will depend on how far competition is allowed to be genuine. For a long time to come the policies of individual member countries of the Common Market may distort the principle of comparative advantage so genuinely held by its founders.

56 REFERENCES

A.V. Bhuleshkar. Bargaining Co-operatives with Special Reference to the Quick Freezing Pea Industry, Nottingham University, 1970(Unpublished thesis).

Bird's Eye Foods Ltd. Annual Review, 1972, and series.

Wendy Booker. Break Crops — A Bibliography, University of Reading, 1972.

Campden Food Preservation Research Association. The European Market, 1972.

J.E. Cook. Methods of Procurement of Vegetables for Processors, University of London, 1967 (Unpublished thesis).

J.A.L. Dench and Others. Break Crops, University of Reading, 1971.

J.D. Elrick and E.M. Wright. Peas for Vining, East of Scotland College of Agriculture, 1972.

Financial Times. Survey of Findus at Grimsby (April 10, 1970), at Aberdeen (December 18, 1970), and at Cleethorpes(December 10, 1971).

Findus Ltd. This is Findus, 1972.

H.W.T. Kerr. Vining Peas, University of Nottingham, 1972.

Dried Peas, University of Nottingham, 1973.

H.M.S.O. Bulletin Number 81,Peas, Ministry of Agriculture, Fisheries and Food, 1969.

Horticulture in Britain, Part 1, Vegetables, Ministry of Agriculture, Fisheries and Food, 1967.

Household Food Consumption and Expenditure 1970 and 1971, Ministry of Agriculture, Fisheries and Food (Published 1973).

Report of the Census of Production, 1968. Number 14, Fruit and Vegetable Products, Department of Trade and Industry, 1971.

Report of the Committee of Inquiry on Contract Farming, Cmnd Paper 5099, 1972.

The Treaty of Accession to the European Community, Cmnd Paper 4862, 1972.

W.L. Hinton. The Future Market for Horticultural Produce, Scientific Horticulture, Vol. 22, 1970.

De perspectieven van grote vollegroundgroenteteeltbedrijven (Eccnomic Prospects for Field Vegetables in the U.K.). Tuinbouwdagen, Netherlands, 1970.

The Demand for Horticultural Produce and Development in the Pattern of Trade in the United Kingdom, International Society for Horticultural Science, 1970. -

The Market for Vegetables for Processing, National Power Farming Conference, 1971.

Institute Economique Agricole. L'Industrie Belge des Conserves de Legumes, Brussels, 1969.

Kredietbank of Belgium. The Preserves Industry in Belgium, 1970.

0.E.C.D. The Processing of Fruit and Vegetables in Selected Countries, Summary Itport and Reports of Individual Countries, Paris, 1972.(Unpublished).

Pea Growing Research Organisation. Pea and Bean Growing Handbook, Vol. 1, Peas, 1971.

The Metal Box Company. U.K. Canned Food Statistics, 1972.

Union Nationale Interprofessionelle des agumes de Conserve. Le Marche Francais du Pois de Conserve, and Le Marche du Pois de Conserve, Paris, 1971. 57 APPENDIX

TABLE I. VINING PEAS - OPERATIONAL COSTS AND LABOUR REQUIREMENTS BY SIZE OF ENTERPRISE

Operational Costs Per Acre _ Vining pea Acreage size group - acres 10 to 50 50 to 100 100 to 150 150 and over

Operation Number £ Number £ Number £ Number £ of farms per acre of farms per acre of farms per acre of farms per acre _ Stubble cleaning 5 1.19 13 0.76 10 1.22 11 0.74 Ploughing 10 1.38 27 1.25 18 1.44 33 1.73 Seedbed cultivations 11 4.43 28 2.91 18 2.71 34 2.89 Drilling 8 13.72 27 13.12 18 12.22 34 12.80 Post drilling cultivations 11 0.51 28 0.30 17 0.31 29 0.29 Spraying 7 3.91 22 4.10 14 4.18 28 3.72 Total growing 25.14 22.44 22.08 22.17 Harvesting by grower 2 20.69 4 15.36 7 10.98 10 14.44 by contract 3 23.83 9 23.82 8 24.48 17 25.02

Labour and Tractor Requirements Per Acre , Acres 10 to 50 50 to 100 100 to 150 150 and over , Number Manhours Number Manhours Number Manhours Number Manhours of farms per acre of farms per acre of farms per acre of farms per acre

Stubble cleaning 5 0.91 13 0.80 10 0.93 11 0.78

Ploughing 10 1.39 27 1.17 18 1.13 33 1.34

Seedbed cultivations 11 0.99 28 0.53 18 0.43 34 0.47

Fertilizer appllication 6 0.42 15 0.31 13 0.19 . 21 0.20

Drilling 1 man 5 0.41 19 0.37 14 0.38 26 ,0.42

2 men 3 1.90 8 1.18 4 0.96 8 0.78 (0.95) . (0.59) (0.48) (0.39) (Post drilling cultivations 11 0.34 28 0.25 17 0.28 29 0.27

Spraying 7 0.32 22 0.33 14 0.26 28 0.23

Harvesting 2a 6.68 4 4.8 7 9.40 10 , 10.60 (4.8) (7.7) (8.2) Total Growing and Harvesting 11.46 9.74 13.96 15.09 (11.46) a (9.15) (11.78) (12.30) , -

a Excludes farm with static viner where an acre was vined with 10 men in 4 hours. Where tractor hours are different from manhours they are shown in parenthesis. Total tractor hours in parenthesis after manhour totals.

58 TABLE 2. COST OF NEW EQUIPMENT FOR VINING PEAS

_ DRILLS CUTTERS VINERS 1) Grain (24) 1) Tractor mounted 1) Static side delivery(24)

6 to 25 coulters 7ft 6in to 9ft cutting width 20 horse power motor 4/12 to 10 in row width Cost £390 to £530 Cost £3,200 Cost £195 to £305 Not in common use. .100 acres a season.

2) Combine (20) 15 to 21 coulters 43% to 7 in row width 2) Tractor drawn mobiles Cost £340 to £440 4 to 6ft pick up width Diesel engined

3) Precision Units (8) 2) Self-propelled Cost £8,000 to £9,000 centre delivery (40) 6 coulters 200 acres a season

8/12 in. row width 9 to 10 ft cutting width Cost £330 Cost 0,000 to 0,200 3) Self-propelled mobiles 4) Placement (20) 5ft pick up width 15 coulters Powerful diesel engined 7 in. row width Cost £16,000 Cost £320 400 acres a season

Figures in parenthesis are acres capacity in an eight hour day

59 TABLE 3. DRIED PEAS - OPERATIONAL COSTS AND LABOUR REQUIREMENTS PER ACRE

Operational Costs

Operation Labour Machinery Materials Total £ £ £ £

Stubble cleaning 0.25 0.48 - 0.73 Ploughing 0.37 0.70 . - 1.07 Seedbed cultivations 0.28 0.62 - 0.90 Fertiliser applicationa (0.09) (0.20) 2.4 2.40 Drilling 0.20 0.27 ' 10.7 11.17 Post-drilling cultivations 0.08 0.14 - 0.22 - Spraying 0.16 0.18 3.2 3.54 Bird scaring 0.33 - 0.33 Total Growing 1.67 2.39 16.3 20.36 Dessicant spraying 0.08 0.20 2.5 2.78 i Windrowingb (0.34) (0.48) - (0.82) Combining 0.43 1.94 - 2.37 Total Harvesting 0.51 2.14 2.5 5.15 _ Drying and storage 0.20 n.a. , - n.a. Total Costs 2.38 n.a. 18.8 n.a.

Labour and Tractor Requirements Operation Number Labour Tractor Time of times manhours hours of year

Stubble cleaning 2 0.70 0.70 Sep. to Oct. Ploughing 1 1.01 1.01 Sep. to Dec. Seedbed cultivations 3 0.79 0.79 Feb. to May Fertiliser applicationa (1) (0.24) (0.24) Feb. to Apr. Drilling 1 0.56 0.54 Mar. to May Post-drilling cultivations 1 0.22 0.22 Mar. to May Spraying 2 0.45 0.38 Mar. to Jun. Bird scaring - 0.92 - May to Jun. Total Growing - 4.65 3.64 0.23 0.20' Jul. to Aug. bessicant spraying 1 - Windrowingb • , n.a. (0.94) (0.94) Jul. to Aug. Combining 1 1.18 0.59 Jul. to Aug. Total Harvesting - 1.41 0.79 Drying and storage - 0.55 - Jul. to Sep. Total - 6.61 4.43

a Fertiliser application separate on 307 acres

b Windrowing on 176 acres out of a total of 2098 acres

60 TABLE 4. DRIED PEAS — RANGE IN YIELD PRICE AND PROFIT

Number of farms All Size group-acres Farms less than 20 20 to 30 30 to 50 1 50 and over Yield—cwt per acre

Less than 10 5 — 1 3 1 10 to 15 10 2 2 4 2 15 to 20 23 8 5 5 5 20 to 25 8 1 2 3 2 ' 25 to 30 , 3 - 1 — 1 1 30 and over 6. 3 1 2 — Total 55 15 - 11. 18 11 _ . Price—£ per ton • 4 less than 35 •2 1 1 — . — 35 to'40 . 3 1 1 — . 1 — 40 to 45 . - '• - 2 . — 1 - 1 . — 45 to 50 . 8 2 2 .. 3 . 1 • 50 to 55 • 22 7 4 5 .6 55 to 60 ' 13 2 2 7 2 ' . 60 and over • 5 .. 2. — • - 1 2

Total • 55 15 11 - 18 11 Profit-1 per acre • - —10 and over 13 2 4. 5 2 —10 to 0 • , 8 2 2 2 •2 Oto 10 15 4 2 . 5 • • 4. 10 to .20 7 3 1 •, 3 . — 20 to 30- 7 1 2 2 . 2 30 to 40 2 ' 1 —. 40 to 50 1 1 — • . — • — 50 and over 2 , 1 1 _ — Total 55 15 11 18 11

61 TABLE 5. THE STANDARDS USED IN THE 1970 SURVEYS. (1973 in parenthesis)

Rates per Hour (pence)

Labour Regular men 35 (51) Casuals at actual rate.

Tractors and Lorries Medium and large 40 (50)

Four wheel drive 85 (100)

Large crawlers 130 (150)

Lorries 225 (250) or 7/12 (10) per mile

Rates per acre Cultivators pence pence

Ploughs 30 (35) Fertiliser distributors 10 (15)

Cultivators and disc harrows 10 (10) Sprayers 15 (15)

Rotary cultivators 55 (75) Trailers 5 (5)

Harrows and rolls 5 (5)

Specialised machinery has been depreciated at twenty five percent of the written down value (for ten years). Repairs at actual cost. Depreciation and repairs are allocated according to the total acreage of all crops covered by the equipment concerned.

62 OTHER PUBLICATIONS IN THIS SERIES

No. 1 Lowland Sheep: Production Policies and Practices Editor: W.J.K. Thomas University of Exeter October 1970 50p

No. 2 Cucumber Production in the Lea Valley • Profitability on a Sample of Nurseries By A.H. Gill University of Reading November 1970 30p

No. 3 Oilseed Rape: A study of its production based on economic surveys of the 1967, 1968 and 1969 harvests By J.A.L. Dench University of Reading December 1970 50p

No.4 Outdoor Pigs: Report on an economic investigation By M.A.B. Boddington Wye College (University of London) August 1971 75p

No. 5 Year round Cauliflower production in Lincolnshire, Kent and Cornwall 1969-70: including trends in production, imports and prices of competing and complementary brassica supplies By Helen. M. Cole University of Exeter October 1971 50p

No.6 The Economics of Carrot Production and Marketing in Britain: A Commodity Study By W.L. Hinton University of Chmbridge December 1971 50p No.7 Sugar Beet: An Economic Report By M.C. Thompson and F.G. Sturrock University of Cambridge December 1971 20p

No.8 Lowland Sheep: An economic analysis oflamb production, 1970 Editor: W.J.K. Thomas University of Exeter December 1971

No.9 Two Systems of Beef Production on Arable Farms: An economic study on farms in the East of England, 1968-1970. By I.G. Simpson University Of Leeds February 1972 40p No. 10 Field Beans as a Break Crop By W.S. Senior University of Nottingham February 1972 '30p No. 11 Early Tomato Production: Fourth Report on the British Isles Tomato Survey By J.A.H. Nicholson Wye College (University of London) March 1972 75p

No. 12 Glasshouse Lettuce: An economic Survey in Lancashire University of Manchester February 1972 20p 63 No. 13 Break Crops: An Economic Survey in Southern England — with a technical appraisal by ADAS By several authors Accompanied by a break crop bibliography compiled by Miss Wendy Booker University of Reading May 1972 75p

No. 14 Economic Aspects of Cucumber Production and Marketing in Britain (including a survey of the 1969 and 1970 crops in the East Riding of Yorkshire) By R.A. Giles University of Leeds February 1973 50p

No. 15 Threshed Peas: A study of the 1971 crop in the East Midland Region By H.W.T. Kerr University of Nottingham January 1973

No. 16 Pig production: Results of a study in South West England in 1971/72 By W.J.K. Thomas and Miss E. Burnside 'Chive rsity of Exeter January 1973

No. 17 The Economics of Growing and Selling Plums 1923-1971 By J. Rendell and S.R. Wragg thiversity of Bristol January 1973 30p

64 UNIVERSITY DEPARTMENTS

BRISTOL Agricultural Economics Research Unit Department of Economics University of Bristol 79 Woodland Road Bristol BS8 lUT

CAMBRIDGE Agricultural Economics Unit Department of Land Economy University of Cambridge Silver Street Cambridge CB3 9EP

EXETER Agricultural Economics Unit Department of Economics University of Exeter Lafrowde, St. German's Road Exeter EX4 6TL

LEEDS Agricultural Economics Department University of Leeds Leeds LS2 9JT

LONDON School of Rural Economics & Related Studies Wye College (University of London) Nr Ashford Kent

MANCHESTER Department of Agricultural Economics The University Manchester M13 9PL

NEWCASTLE Department of Agricultural Economics The University of Newcastle upon Tyne Newcastle upon Tyne NE1 7RU

NOTTINGHAM Department of Agriculture and Horticulture University of Nottingham School of Agriculture . Sutton Bonington Loughborough Leics LE12 5RD

READING Department of Agricultural Economics and Management Building No 4 Earley Gate Whiteknights Road Reading RG6 2AR

WALES Department of Agricultural Economics University College of Wales Institute of Rural Science Penglais Aberystwyth Cards SY23 3DD