Is the era of cheap food over? Food Ethics Council says not just yet

The main question on everyone’s lips was ‘Is the era of cheap food over’?

Environmental factors, the effect of Brexit and ‘false accounting’ were discussed at length in order to try forecast the future of food prices. However, as attendees found out, this is no easy task.

Speaking at the meeting was David Pink, professor of crop improvement at Harper Adams University and chair of the Food Ethics Council.

FoodNavigator caught up with him to talk about the key takeaways of the meeting and how he believes the industry should react.

The Brexit vote was a common point regularly raised throughout the meeting.

After the Referendum vote in June 2016, Britain has been in a state of political uncertainty and this has been reflected in the food industry, with currency fluctuations and import laws changing.

“Brexit will have an impact, most likely through currency fluctuations which will add to the uncertainty of the cost of imported food but also home produced where inputs have to be imported,”​ said David Pink, “Brexit could be an opportunity to reshape the UK food system but could also be the cause for a ‘race to the bottom’ whereby environmental and other costs are ‘stripped out’ of retail costs and the UK may accept foodstuff that currently are not acceptable due to EU regulation”.​

The fluctuations in British currency has driven up food prices to an extent already in the months following the vote and suppliers have started to ask for 10-20% price increases from their retailers.

Although this is not a likely scenario, analysis does show that 3-4% food inflation is probable for 2017.

What is less easy to predict is the effect on prices that changes in import restrictions will bring, with the council agreeing that this “remains to be seen”​.

As well as Brexit, disease, popular trends, health effects and environmental factors all contribute to rising food prices.

The idea of ‘false accounting’, where businesses are not taking into consideration the hidden costs of their products, was featured heavily in the meeting as an example of why cheap food can no longer exist.

These costs could include costs on the NHS as a result of the population eating unhealthily or the costs on climate change due to the use of nitrogen fertilizers.

Adele Jones, external relations manager at Sustainable Food Trust, also attended the meeting in London. She said hidden costs mean there is no such thing as cheap food.

"Although a £3 chicken may seem like a bargain when you pay for it at the till, in fact, and often unknowingly, you pay for that chicken again numerous times through your taxes and utility bills to clean up the costs associated with intensive methods of production. If all these ‘hidden’ external costs or ‘externalities’ were factored into the price tag you see in the supermarket, you could be paying up to two times more than you first thought,"​ she said.

But how should governments, civilians and business tackle these hidden costs? Is it logistical to add taxes on to product considered bad for us?

As noted in the meeting, the tax on sugary drinks in Britain has been the first step in this direction, yet there are still differing opinions about its effect.

Jones believes taxes could potentially work.

"We must continue our work to try and quantify and where possible monetise these externalities, advocating for a series of carrot and stick policy mechanisms, for example a tax on nitrogen fertiliser and parallel soil carbon stewardship incentives, to ensure that the polluters pay and farmers working to protect the environment and promote human health are properly rewarded for these beneficial outcomes,"​ she said.

David Pink said the way forward needs to be for the industry to build sustainable supply chains.

“There needs to be a change in mind-set from short termism – continuous growth in profit to service shareholders/investors to a long term strategy for maintaining our food supplies… A longer term view will require all actors in the supply chain to cooperate and to agree to share value equitably”.​

Pink continued to say that schemes like this may need a degree of protectionism for UK produced products to battle cheaper imports, in order to maintain a quality supply chain which can be monitored for quality rather than traceability alone.

Pink concluded by saying he believes cheap food isn’t over just yet, however in the long term it is possible we will see much higher prices for food.

“Attempting to recoup costs of health and environmental impacts may drive prices up but this is going to have a disproportionately greater impact on the poorest sector of the UK population. How we manage this is a huge challenge,” ​he told FoodNavigator.

“Added to this are the challenges around Brexit but also the challenges to our food supply of climate change – disrupted and/or unpredictable production will introduce volatility into supply chains both in the UK and abroad”.​

The Food Ethics Council is an UK charity that provides independent advice on the ethics of food and farming. The Business Forum meets six times a year in London.