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Why are food prices so high - and who is to blame?

Updated: Mar 4

Before the pandemic, the UK boasted some of the world's lowest food prices. However, for the last two years, the island has experienced an unprecedented rise in food prices. Now, it finds its high inflation driven by food prices – prices which are at a record-breaking 19% year-on-year.

Pre-Covid-19, the average UK household spent $2,300 yearly on food, comprising only 10% of household expenditure. Compare this to New Zealand, a country with similar average household expenditure, which spent nearly 50% more on food. On the other hand, Italians had domestic spending of $5,000 less per year but spent over $3,000 annually on food. Eurostat data from 2019 demonstrated that UK households spent less of their earnings on food than any other European country.

One of the reasons for this is the preference the UK has for cheaper, lower-quality food. The population spends more money on ultra-processed foods and less on fruits and vegetables, especially compared to Southern European countries. Nevertheless, according to Our World in Data, in 2020, consuming a healthy diet in the UK would cost $1.90 per day per person, making it the cheapest food cost globally. In comparison, France had a cost of $3.20, and Germany at $3.

However, the situation is set to change. The UK faces unprecedented inflation rates, which –previously being driven up by the cost of fuel – are now being inflated by food costs. The Office for National Statistics (ONS) reported an inflation rate of 8.7% in April 2023. Although slightly down from 10.1% in March, this rate is significantly above the European average.

The UK has experienced an unparalleled 19% year-on-year increase, the steepest since the ONS began measuring in the 1980s. Furthermore, in 2022, food prices had already seen a substantial increase of 6.7%, representing a 27% total increase over the past two years. In comparison, Eurozone food inflation stands at 15%.

The Department for Environment, Food, and Rural Affairs (Defra) has hired researchers to develop a "single food price model", in the hopes of mitigating the impact of food cost. A price cap would limit how much supermarkets can charge for specific produce. However, implementing such a measure contradicts the Conservative Party's apparent faith in free markets. The right-wing party’s response highlights the inadequacy of free market economics to solve humanitarian problems.

The failings of free market economics were never made more evident than during the coronavirus pandemic. Public spending soared as it was required to meet the needs of a population at risk. Official figures show that spending in 2020/21 was about £177 billion higher than had been planned before the pandemic for that year. In times of desperation, right-wing economics always concedes.

Increased energy, fertiliser and grain prices have been passed on to consumers, driving up food prices. Notably, certain items have experienced more substantial price increases than others. ONS data indicates a 54% increase in the price of cucumbers compared to just one year ago. This is because cucumbers grown in the UK are primarily cultivated in heated greenhouses, leading to higher production costs due to heating expenses.

While energy, fertiliser, and grain prices have recently declined, there is a lag between planting and selling, and thus the drop in costs has yet to be reflected in food prices. Additionally, the UK produces less food than it used to, with fruit production dropping by 16% since last year. The cost of heating has forced many farmers to limit the use of heated greenhouses. As such, produce like tomatoes, cucumbers, and pears are at their lowest production level since data collection began in 1985.

Moreover, the UK's departure from the EU has created labour shortages in the agricultural sector. The National Farmers Union (NFU) estimate that they require 80,000 seasonal workers to pick fruit and vegetables annually, a significant portion of which used to come from the EU. However, the government has only allocated 40,000 temporary visas for this labour. As a result, around £60 million worth of food was wasted in Q1 and Q2 of 2022. Additionally, the UK currently lacks a replacement for the EU's Common Agricultural Policy, further contributing to the challenges faced by farmers and the agricultural sector.

Brexit has introduced serious challenges to UK-EU trade, which are expected to worsen when the government introduces the final Brexit checks in October. These checks will affect nearly 30% of all UK food, particularly meat and dairy products, which have already experienced sharp price increases. Hard cheese prices have risen by 41% year-on-year, while pork prices have increased by 30%.

The UK is in the throes of a cost-of-living crisis caused and exacerbated by right-wing economic policy. While factors such as preference for cheaper food and insufficient production contribute to the problem, conservative politics and the impact of Brexit are aggravating and causing these issues. As demonstrated by Defra's attempt to implement price caps, government intervention is necessary to mitigate the effects of rising food costs. The requirement for state support was evident during the pandemic and is now vital.

It is crucial to recognise that Conservative governments and right-wing economics do not solve humanitarian crises; they only cause them.

Image: The Trussell Trust

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