Western Morning News (Saturday)
Increased costs will push up food prices – Eustice
FOOD PRICES will rise Environment Secretary George Eustice has admitted, thanks to the rising price of fuel and increased wage costs created.
The Camborne and Redruth MP told BBC Farming Today that while the rising cost of carbon dioxide used in food processing would have only a minor impact on prices, other factors would see a rise in bills at the checkout.
Pressed to confirm that consumers would have to pay more for food by presenter Charlotte Smith, the Secretary of State said the impact of the CO2 crisis on prices would be “negligible in the scheme of things.”
But he went on: “There are many other more important pressures, including fuel costs – the cost of distributing food is a major factor – and labour costs.
“We already have inflation in the economy and food price inflation and it is inevitable that if you have increased wages and if you have increased costs on things like fuel then, of course, there will be an impact on food prices – that’s undeniable.
“But if the question is, does the increased cost of carbon dioxide have a meaningful impact on that, I think the answer is ‘no’ and that is because although carbon dioxide is a critical ingredient for many sectors it’s a very small, almost tiny part, of their overall costs.”
Mr Eustice was also asked about easing the pressure on farmers and food producers facing a critical labour shortage. The NFU warned this week that supermarket shelves were in danger of emptying as consumers turned to panic buying because supplies would run low without more staff to pick, pack, process and transport goods.
“We are looking at this issue, we’ve had discussions across government – there is nothing we’re ready to announce but we are looking at options,” he said. “For instance, to encourage some of those settled EU citizens who left the UK and in some cases went for furlough, trying to get them to return and pick up the jobs that they left and also we’re looking at other ways to improve and speed up the testing, particularly of lorry drivers, as one of the key pinch points at the moment is in that logistics sector.”
Sources say that trained butchers in the Philippines are ready to come to Britain to work in the food processing sector but many are barred because the Home
Office won’t relax rules around the speaking of English. Mr Eustice said: “I know that the issue of language has been raised. There is some discussion about this but the Home Office are also clear that the level of English language attainment needed is actually quite low. We are exploring this issue further because I know it’s something that the sector have raised.”
He rejected the suggestion, however, that the Home Office was simply “more powerful than Defra” saying there were “competing government priorities.”
He went on: “Obviously we’ve got the issue of food supply and food security and we have demonstrated this week with the action we took on carbon dioxide that we won’t take risks with that, but we’ve also got an important agenda to level up our country to make sure that those on low incomes do see their wages rise. What we do need to see is wage rates increase, see the labour market adjust to attract people into this sector. We can’t just be reliant on migrant labour forever.”
Challenged over the failure to attract UK workers, often in rural areas, into work processing farm produce, Mr Eustice said: “Well we recognise of course that agriculture and particularly those reliant on large numbers of seasonal workers is a special case – that’s why this year we have had the seasonal agricultural workers scheme with 30,000 staff coming into the UK to work in fields, particularly in the soft fruit and vegetable sector.”
Mr Eustice was asked if the government would bail out the food supply chain, in the way it had bailed out fertiliser producers to get the production of CO2 – a byproduct of fertiliser manufacturing – back on track.
The Secretary of State said: “No, we’re very clear that with this intervention we are buying time but we are not buying the industry cheap carbon dioxide.”
Growers, Mr Eustice was also told, are considering no longer producing tomatoes in glass houses because of the cost of heating those glass houses. He said they should renegotiate their contracts to reflect higher input costs.
“What should happen in those situations is we should see those input costs reflected,” he said. “It is not easy to increase capacity for tomato production in other competitor countries like the Netherlands. They are also facing similar pressures on gas prices so I see no reason why those businesses should not be able to renegotiate their contracts with their buyers so that it ensures that it covers their input costs on gas and CO2.”
We need to see wage rates increase. We can’t just be reliant on migrant labour forever GEORGE EUSTICE MP