The UK’s self-sufficiency is contracting rapidly due to “unprecedented” financial and labour-based challenges faced by producers, with production dropping to record lows in some sectors, MPs have heard.
In the face of soaring input costs and ongoing worker shortages, the food sector had “never witnessed anything like this”, NFU president Minette Batters warned.
Batters was giving evidence yesterday to a Commons Environment, Food & Rural Affairs Committee inquiry into the impact production pressures were having on the UK food supply chain and their implications for food security.
She warned that all industries were contracting, but protected crops, horticulture, pigs and poultry were seeing “extreme” contraction – with planting for products like tomatoes and cucumbers at the lowest levels since records began.
Meanwhile, some 40% of NFU cattle and sheep farmers were saying they were planning on cutting numbers too, due to soaring costs, a move Batters described as “unheard of”.
“The more we short on supply the more we drive food inflation,” she warned.
“We tend to focus everything on affordability, [but] I would urge everybody to focus on availability, so we don’t drive further challenges on affordability going forward,” said Batters, pointing to the impact product shortages also had on driving up prices.
MPs also heard that energy costs and fertiliser prices posed a particularly significant challenge when it came to rising agricultural input inflation, which is tracking at more than double the rate of food inflation.
Farming input costs jump nearly 35% in a year as inflation soars
“When I look at the volatility in the gas market, if we knew a price and that was a fixed price, everybody could coalesce around that,” Batters said, arguing that volatility meant growers were signing contracts based on one gas price, which often changed quickly – based on market movements – which then impacted on profits.
Ed Barker, the head of policy and external affairs at the Agricultural Industries Confederation, echoed Batters, adding “uncertainty” was the main threat to food security as it meant producers could not plan ahead.
And while interventions such as the government’s Energy Bill Relief Scheme were “really welcome” there was also a need for more certainty on what happened at the end of the scheme, he urged.
With fertiliser prices closely linked to gas prices and both availability and affordability also stretched, the Committee also heard of the challenges faced by farmers and producers.
Efra committee chair and farmer Sir Robert Goodwill MP pointed out he bought about 30 tonnes of fertiliser a year, paying about £278 for the input two years ago.
However, his bill had risen by more than 126% to £630 this year, he warned, with some seeing prices rising to as much as £1,000.
Labour was also raised as an issue, with AHDB sector strategy director for beef & lamb Will Jackson emphasising ongoing shortages were a “hangover” from Brexit and a “huge challenge”.
Batters agreed, adding “without any shadow of doubt, access to people is really holding growth back. It is probably the single biggest issue. It is not just about seasonal, it is about workers, and it goes throughout the whole supply chain”.
Sectors throughout food production have been hit by the labour crisis, with growers calling for 40,000 more seasonal workers and meat processors and establishing their own apprenticeships in an attempt to bridge the gap.
All three speakers argued government policy needed to be updated to ensure food production continued in the UK and that farmers and growers could be protected.
“Food should sit at the heart of government, if you like, along with energy security,” said Batters, who added the prime minister’s suggestion (during the Tory leadership election campaign during the summer) for an annual round table discussion on domestic food security “really needs to happen because this impacts on every department, and actually what we are finding a challenge now is how we join all of these up”.
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