Sunday, 21 August 2016

Abolishing the Corn Laws again - the case against 'food security'

It's not every day that you read an article saying that it was a mistake to repeal the Corn Laws:

The situation created by the British vote to leave the European Union is momentous for UK food. It is on a par with the Repeal of the Corn Laws of 1846 when Britain decided its Empire could feed it, not its own farmers.

The point about the Corn Laws was that they existed for the sole reason of keeping grain prices high so as to sustain marginal British agriculture. With the expected effect of making food prices higher:

The high price caused the cost of food to increase and consequently depressed the domestic market for manufactured goods because people spent the bulk of their earnings on food rather than commodities. The Corn Laws also caused great distress among the working classes in the towns. These people were unable to grow their own food and had to pay the high prices in order to stay alive.

By opening British farmers up to competition, the repeal of the Corn Laws resulted in cheaper grain and, therefore, cheaper bread (and beer). We forget, however, that the main justification for the corn laws wasn't landowner self-interest but the belief (at the end of a long war and a series of poor harvests) that what we'd now call food security was more important than open trade. At the heart of the food security concept is the idea of self-sufficiency.

My concern is that the security of food might get lost in the debacle. The UK must not let that happen. Food stocks are low in a just-in-time economy, an estimated three to five days’ worth. The UK doesn’t feed itself. It has dropped to 61% self-sufficiency, Defra reported last month.

Now leaving aside how the UK being self-sufficient in food is compatible with membership of the EU, let's ask instead what the consequence of self-sufficiency might be - here Professor Lang's article is helpful. The consequence - a policy aim in the professor's world - will be more expensive food:

Part of the challenge now is the UK’s love of cheap food. This was the legacy of the Repeal of the Corn Laws which sought cheap food for workers. Cheapness as efficiency is still central to the neoliberal project today, as Michael Gove stated in the referendum campaign. But in food, cheapness encourages waste and makes us fat. Good diets are too expensive for the poor.

Again, we'll ignore that Professor Lang also tells us in his article that Brexit will make food more expensive, and ask instead whether there is any practical basis for deliberately making food more expensive (for there surely isn't any moral basis). We'll note the negative impact on the economy from people spending more of their income on food - a huge and unnecessary opportunity cost. The main - probably the only - case is a health one:

The researchers found that healthier diet patterns—for example, diets rich in fruits, vegetables, fish, and nuts—cost significantly more than unhealthy diets (for example, those rich in processed foods, meats, and refined grains). On average, a day’s worth of the most healthy diet patterns cost about $1.50 more per day than the least healthy ones.

The problem here is that we have to accept the premise - Diet X is healthier than Diet Y - and to agree that there is a reason for government to intervene in food pricing (for example by making grain more expensive). And to understand just how much more expensive. Plus of course, we have to agree with the researchers that the price differential is so substantial remembering that these are extreme measures - the 'most unhealthy' diet set against the 'most healthy' diet.

So instead we get food policy planning that uses the idea of 'food security', on the assumption that there is a genuine threat to the supply of food meaning that, in the worst case, we get food riots. Indeed, Professor Lang thinks these are on the way because of Brexit:

But given that the WTO rules are “the lowest common denominator” and the Codex Alimentarius is determined in meetings that are “dominated by big business and lobbies [making] the EU look like the most democratic organisation in the world”, this is far from ideal. The result would be food riots, says professor Lang.

The agricultural sector is very keen (especially the bit that actually owns the land) to get this idea of food security high up on the agenda when food is discussed. It is the biggest justification for the continuance of agricultural subsidy post-Brexit and for the sorts of high-tariff models loved by the EU, USA and Japan. We should be resisting such a model (subsidy plus tariffs) since - as we can see from the corn laws experience - the result is more expensive food acting as a drag on the economy to the benefit of a tiny proportion of the UK's population. Smaller even than you think:

Each year we’re seeing a further concentration of benefits in the hands of fewer,
larger landowners, who seem to use their subsidy cheques to buy up more land and more subsidy ­entitlements,” Jack Thurston, the co-founder of, told the Scotsman. “Most people think farm subsidies are there to help the small guy but we’re seeing it’s quite the reverse. The bigger you are, the better your land, the more public aid you get,” he said.

So we've a system of support (as, unintentionally, Professor Lang shows) not far removed from those 19th century corn laws. We know also that the main impact of subsidy comes in raising land values meaning that those agricultural subsidies and supports are doing little or nothing to maintain food security but represent a straight transfer of money from the taxpayer to the owners of agricultural land.

We should explore whether there is a model that works rather than promising to stay in the warm bath of subsidy after we've left the EU. Perhaps starting by asking how New Zealanders can grow onions that sell in a Kentish farm shop for the same price as locally grown onions. And why those Kiwis can produce lamb, ship it to the UK, sell it for less than British producers and make a profit:

New Zealand is the largest dairy and sheep meat exporter in the world, and a major global supplier of beef, wool, kiwifruit, apples and seafood. New Zealand-grown produce feeds over 40 million people, with 7,500 animal products and 3,800 dairy products going to 100 countries every month.

All of this without any subsidy:

New Zealand agriculture is profitable without subsidies, and that means more people staying in the business. Alone among developed countries of the world, New Zealand has virtually the same percentage of its population employed in agriculture today as it did 30 years ago, and the same number of people living in rural areas as it did in 1920. Although the transition to an unsubsidized farm economy wasn’t easy, memories of the adjustment period are fading fast and today there are few critics to be found of the country’s bold move.

So ask yourself a question. Do you want the sort of protectionist, subsidy-hungry food security that sucks up over £10 billion each and every year. Or an agricultural sector that contributes to a growing and successful economy? For me food security isn't about self-sufficiency but is about diversity and choice - we're more at risk if we've only one supplier of grain than if we've 50 suppliers. Yet the advocates of policy based on food security still argue that protectionism, trade barriers and expensive food (plus rich landowners) is the way to provide that security. The argument we thought we'd won back in 1846 when those Corn Laws were scrapped is still here today and we have to make the case for open trade in food all over again.


1 comment:

Jim said...

As a farmer I have no problem with UK farmers having to compete with the foreign imports, and having to live with world prices, that seems eminently reasonable. However, if food prices rocket due to lack of global supply can we be assured that the politicians will allow UK farmers to benefit from those high prices and not suddenly decide that food is too important to leave to the market and introduce price and production controls etc? Because I foresee that the pressure to do exactly that at times of food supply crisis would be huge. So its quite easy to see the scenario unfolding whereby the public get cheap foreign imports in the good times, but demand politicians reduce prices artificially when things are less rosy.