• Written by Richard Haddock
  • Posted on Jan 09, 2019
  • Articles

Consumers who complain about the cost of everything going up (including the recent three per cent hike in rail fares) should stop, draw breath and consider the following.

There is one area of their spending where prices have, in real terms, fallen spectacularly in the last 60 years: food.

Since 1957 the share of household income spent on food has halved, while spending on leisure and other household costs have more than doubled.

That should tell us something about the way farmers have become more efficient producers and how technology has helped drive costs down. But it also provides a valuable clue as to why farmers now have to work harder to achieve profit margins that 60 years ago would have seemed reasonable at best.

Another factor, of course, is that we rely so much on food imports from zones where production costs are lower, such as the sunshine belt of southern Europe (we imported more than a billion pounds worth of fruit and veg from Spain alone in the first six months of last year).

Half of the food we now consume comes from abroad, and 30 per cent of that from the EU, which gives a clue as to why so many people are getting nervous about continuity of supply if the going gets sticky over Brexit.

But Europe is not our only source of food: a total of 191 countries now supply the UK’s food sector, many of them having to pay tariffs to access the EU market. And here’s where I believe we can start to see the way we can trade in future: offering tariff-free deals to these suppliers to effectively lower the cost of what we import from them.

The freedom to cut our own deals will be one of the benefits of us breaking loose from a European agricultural model that has run out of steam – and money.

Even if we were to stay in Europe we should rapidly discover that the gravy train of farm support is running into a siding. Europe doesn’t have the funds to carry on propping up farmers (many of them far less efficient than the UK’s) in the way it traditionally has.

If we withdraw and take our eye-watering contributions to the EU budget with us then the effects on the mainland will be even greater – thousands of French farmers, for instance, will almost certainly be out of business if the support cut is only as modest as five per cent, and the likelihood is that it will be far higher.

But the fact remains that we have been subsidising our competitors so they can undercut us, which they have done at every turn, particularly in the livestock sector where cheap Eastern European beef, produced to standards and at a cost well below ours, has caused so much damage to our domestic markets.

Much of it has been shown on the books as ‘Irish’ beef thanks to the circuitous route it has taken to reach our processors, which is why the statistic showing that Ireland ostensibly exported £425 million worth of beef to us in the first half of 2018 should be held up to the light and examined very closely indeed.

I see Brexit as an opportunity rather than a threat: the real difficulty is getting politicians to see it in the same light. To make them realise that the answer to the vast majority of our food requirements (apart from coconuts, pineapples and bananas) lies right here within our own borders.

That there is a huge potential for British farmers to expand their operations and output – a potential which has remained locked up because low market returns haven’t delivered enough money, in most instances, to fund that expansion and lenders have been reluctant to invest in a sector wracked by so much uncertainty.

British farming is far from the prosperous sector it once was. But if politicians put their confidence in it and back that with suitable measures to encourage investment and modernisation and to make it an attractive industry for the vitally-needed next generation then I see no reason why anyone should be concerned about whether there will be food on their plates later this year, next year or for any year thereafter.