Is Britain sleepwalking into a food crisis?
Originally policies were introduced to reduce price volatility and ensure that farmers had secure incomes, enabling citizens to have more reliable supplies of food.
Global concern with food security was reinforced by the big spike in cereal prices in 1972-74. Marketing boards – despite their name – took distribution and pricing essentially out of market hands, with prices negotiated year by year between all sides of the business
On May 8th the government ended its consultation period on a new agricultural policy for England. Revealingly, its policy document – called ‘Health and Harmony: The future for food, farming and the environment in a Green Brexit’– has more to say about the environment than either food or farming.
In the eight chapters defining new policies in DEFRA’s paper, more than three times as much space is devoted to environmental issues (including animal health) as the economic ones which affect farmers’ and farmworkers’ own livelihoods.
But now few politicians see agriculture as of much consequence since it accounts for only 0.7 % of UK gross domestic product and 466,000 jobs, or 1.5 % of UK employment in 2016 (of which 302,000 in England). The countryside seems to matter more for its visitor attractions.
However, the state of agricultural prices and farmers’ incomes is worrying
- From agriculture itself, the average farm lost £700 per year.
- Even in nominal terms, total income from farming is less than half of what it was in 1995.
- Farmers’ median age is 59 and one-third are over 65, with only 3 % under 35.
But to survive the end of EU direct payments, DEFRA offers only a pious hope, not a policy: “Removal of Direct Payments may be offset in a number of ways, including farm efficiency improvements and diversification, although this will vary by type and location of farm.”
Average income (£) from agriculture for cereal farmers, 2003-04 to 2016-17
However, because of corporate concentration, especially in retailing, the share of those prices received ‘at the farm gate’ is substantially less than it was.
Farmers are price takers, squeezed by powerful businesses on either side of their activity. Not only do they receive less of the traded price for their outputs than in the past, but the real prices of essential inputs for industrial farming, such as fuel, agro-chemicals and fertilisers have gone up sharply. (Table below added by editor)
The wider backlash against neoliberalism has not touched the sanctity of market mechanisms in agriculture, even though the markets that serve it fulfil their purpose of balancing supply and demand through the price system only fitfully.
in Britain, the urgency of the situation is seen in a chronically weak balance of payments, part of which is a deficit in food trade. In 1984, before the CAP reforms began, the UK had risen to 78 % self-sufficiency in all food and 95 % in ‘indigenous’ foods, based on international prices. Ten years ago this had fallen back to 60 % and 74 % respectively and it has stabilised at around that level. However, when valued at ‘farmgate’ prices – those actually received by farmers – Britain in 2007 produced only half of the food it consumed.
The World Trade Organisation’s rules will not allow any return to measures ensuring food security
Marketing boards – despite their name – took distribution and pricing essentially out of market hands, with prices negotiated year by year between all sides of the business. They started with the Milk Marketing Board in 1933, when market concentration had enabled dairies to force down the prices they paid to farmers – just as in recent years. The MMB ensured the production, distribution and availability of good-quality milk and dairy products at stable prices for over 60 years. These measures were allied with practical, free technical advice to farmers from a government agency. The economic principles of those interventions were sound, even though they accompanied the shift to industrial farming methods.
How can the higher farm prices and incomes needed for the sake of farmworkers as well as farmers be ensured?
Thomas Lines believes that DEFRA’s current proposals portend a serious crisis in English agriculture, which will be entirely of the country’s own making. He ends: “If our farmers cannot afford to continue in business, who will feed the rest of us?”