UK politicians have been told that farmers “have never witnessed anything like this at any time in living memory” and that food and drink prices are to rise higher than previously expected.
Minette Batters, president of the National Farmers’ Union (NFU), told the committee that its members called it “an extraordinary situation.”
‘Time Is Not on Our Side’
“It’s an extraordinary situation and I think whoever you speak to, certainly whoever I speak to, says that they have never witnessed anything like this at any time in living memory, it is unique,” she said.Many sectors are facing the impact of inflation, pressures from the Ukraine–Russia conflict, and volatility in the gas market, pushing up costs.
In terms of self-sufficiency, she said that England and Wales have “enormous opportunities” but if the UK “downsize[s] our self-sufficiency, which has been predominantly static, around 60 percent for the last two decades, I think it would be to the enormous detriment of this country, especially facing into the global challenges that we are, so we have to look at a statutory framework.”
“Time is not on our side to do that; there is a real level of urgency,” she added.
“Many farmers are producing food at a lower cost of production, which is unsustainable in the long term,” she said.
Batters added that the danger is that because the crisis is global, this is driving up “higher inflationary costs for the consumer as well.”
“We’re seeing huge contraction in the protected crop sector, tomatoes, cucumbers, lowest levels, since records began in 1985,” Batters said.
“Also field veg, a lot of that driven by access to labour, massive contraction there; livestock, the figures are quite stark; 75 percent are saying they will be using a lot less nitrogen fertiliser so there'll be an impact there,” she added.
“Obviously volume of milk down too. I don’t think there is any sector that is not being massively impacted,” said Batters.
She added that there is an issue of affordability for the end consumer but that the “more we shorten supply, the more we are going to drive food inflation.”
James Walton, chief economist at the grocery insight provider the Institute of Grocery Distribution, told the committee that he forecasts that the rate of food price inflation will reach a peak year-on-year level of between 17 and 19 percent in early 2023.
‘Making Farmers Produce Less in the UK’
Labour MP Geraint Davies noted that Russia and Ukraine are responsible for “30 percent of global wheat exports.”“My understanding is that Russia has reduced the price of gas and fuel to farmers and other people to enable it to have food production in the south of Russia, basically feeding people in the north of Russia, so suddenly these transfer costs become more affordable within Russia, stimulating again the overall amount of production of food in Russia,” he said.
“At the same time, the impact of what they are doing in Ukraine in terms of energy prices is making farmers produce less in the UK,” he added.
Batters responded by saying that this should be something that fits into the “wider security piece.”
She said that talking to “our opposite numbers in Ukraine, they are facing into the fact that 40 percent-plus of the cropped area will not be planted.”
“They’ve been told specially by the Ukrainian government that actually they have to focus on feeding their own people and growing things that will fulfill their own food security challenges, rather than exporting,” she said.
