In order to see what is happening in food supply markets it is often useful to look through the window of the retail sector to observe what is really going on. Retail is much more consolidated than hospitality, and their scale enables supply chains to be shorter, and the impacts of decisions are much amplified when compared to our sector.
Earlier this week British farmers were up in arms because of a sudden decision by supermarket chain Asda to backtrack on a promise to sell only British beef. The retailer said the U-turn was the result of higher beef prices, and it would now sell both Irish and British-produced beef in its stores. The move comes just over a year after the supermarket chain, under its new owners the Issa brothers, made a pledge to source 100% British beef. The retailer only managed to fulfil its commitment from last October.
National Beef Association (NBA) estimates that farm gate prices for British beef have risen by around 20% since the start of the pandemic, stating that higher prices are fully offset by the soaring costs of feed, fuel and fertiliser.
Irish beef is now about 15-20% cheaper than British beef and the UK is Ireland’s main overseas market for its beef accounting for more than three-quarters (78%) of beef imports entering the UK in 2019 [Source: AHDB].
If you will excuse the ridiculous metaphor, beef is just the tip of the iceberg. Brexit has raised the cost of trade such that many foods from overseas, often produced to much lower standards than in the UK, are now significantly lower cost. Farmers are upset that HMG is raising the bar on environmental and welfare standards, whilst changes to other policies in trade and agriculture are dramatically raising costs, all at the same time as new trade deals are struck with countries that have lower and less costly standards.
Trade is a vital part of our food system, as it underpins our food security. As a nation we have not been self-sufficient since the beginning of the 19th century. The transformation we have seen in the dining-out scene (and as a result in the whole hospitality sector), has been fuelled by the tastes and skills of generations of immigrants, and the diverse range of products that we import to support their businesses. And trade can, in some cases, reduce carbon impact – tomatoes grown in Spain are more carbon efficient than those grown under lights in the UK.
But imports can have a sharply negative impact on our environmental balance sheet. Returning to beef as an example, Australian beef (the subject of a recent trade deal) has a higher carbon impact as forests are still being cleared there to create pasture. It’s surely pointless to put effort and resources into planting trees in the UK only to negate their impact by supporting their destruction elsewhere on the planet.
And it’s not just carbon. The UK is a global leader in animal welfare and animal husbandry, unlike many of the countries that wish to sell us meat. Allowing cheap imports from these places undermines our standards and undercuts our farmers at the very same time as HMG is raising these environmental standards at home. If continued, the result may well be a smaller and weaker UK agricultural sector, and therefore reduced food security.
At face value the government appears to be ‘wanting its cake and eating it’. Driven by the twin pressures of responding to pressure from voters on the environment, at the same time as needing to keep food prices low – it risks delivering neither.
To protect our farmers and give our population confidence in imported food the government should draw up a set of core standards that importers must meet to merit zero tariff status. Imports not meeting these standards would be subject to tariffs that would reduce the huge gap in cost and create a more level playing field. It would also incentivise Britain’s trade partners to raise their own standards too.
Put simply our government needs to join up its thinking on trade, environment and agriculture. An obsession with delivering the Brexit Dividend through trade deals could cause huge damage to our environmental progress, and our own agricultural sector.
