Productive farming can deliver real – not fantasy – economic growth

‘Many farmers, including some who supported Brexit, are looking with envy to the commitment the EU is showing to make food security work. In difficult political and economic times there is a lot to be said for firing up enthusiasm for strong, indigenous industries’

FOOD SECURITY has become a huge issue, driven by the war in Ukraine.

This forced it up the EU agenda and there it has remained, although eclipsed by concerns about gas rationing this winter.

The EU has widened its definition of food security to cover not only availability, but affordability. Its position is that it does not have an availability crisis, but one around affordability.

This is linked to farmers’ ability to pass on their rising costs – possible for some commodities, but for many this is not the case. That threatens availability in the long term, if farm businesses cannot operate profitably.

Food security has never been an issue in UK politics. Food supplies have always been taken for granted.

The default position before EU membership, was to import cheap food to keep prices low for consumers.

This changed as a then EU member state – but as trade minister the now prime minister, Liz Truss, made clear her approach on trade deals was generosity over access for food.

This is inevitable when the UK lacks the population to be a truly attractive global market. But one area where it can be a good market is for food.

It offers a well developed retail sector and a tradition of importing that means less of a commitment to quality and local sourcing than elsewhere.

Covid and the war in Ukraine forced a change of focus, with new trade deals delayed, but the damaging deals with New Zealand and Australia remain the blueprint for the future.

The EU and UK have very different views of how to deliver food security. The deals the UK entered into with the big southern hemisphere food producers would never have been acceptable in the EU.

Those countries knew they would never get the same terms as with the UK. Brussels cannot get deals damaging to agriculture passed by member states.

This reflects a very different definition of food security – the EU sees it rooted in a sound domestic farming industry, while successive UK governments have lacked a vision of how a thriving, food producing farming industry can deliver real, rather than fantasy economic growth.

Many farmers, including some who supported Brexit, are looking with envy to the commitment the EU is showing to make food security work.

In difficult political and economic times, there is a lot to be said for firing up enthusiasm for strong, indigenous industries. However, for many years they, including farming, have been seen in the UK as industries of the past rather than sectors that could deliver growth.

That is why the UK economy has ended up overdependent on the retail and financial sectors. The first is now at risk from higher interest rates and consumer fears about spending; the financial sector is struggling to maintain its global role after Brexit and the boost that gave to competing financial institutions in Europe.

Despite all that, farmers have done to push food security up the agenda, the boat may have sailed. This is not down to any lack of effort by the farming lobby, but to a sense that food prices might have peaked.

The United Nations Food and Agriculture Organisation (FAO) compiles a monthly index of global food prices. For September, it reported a 6.5% drop on August, marking the sixth month in a row of falling prices.

They are still above the levels of 12 months ago, but at 5.5% the increase over September 2021 is modest compared to double-digit figures when the war in Ukraine first triggered a global food crisis. This reduction was led by vegetable oils, the most volatile to events in Ukraine.

The falls for the products that affect UK agriculture are more modest at around 0.5% for beef and milk, leaving beef 7% ahead of September 2021 and dairy prices still 20% ahead.

Cereal prices bucked the trend and were up 1.5% and still 11% ahead of last year. These increases are still not covering production costs, but the trend away from record food prices is established.

That may ease affordability, but pressure on farm margins will make the availability side of the equation more acute.

The EU has accepted it will not ease back on food security, but sadly it remains an issue no UK government has given the priority it deserves and needs.