Saturday, 22 July 2017

"They can pay more for their food" - Jay Rayner meets Marie-Antoinette

I'm going to leave aside accusations of vanity, self-promotion and smugness because we are all guilty of such vices. I'm going to focus instead on the vexed question of whether it is ever morally defensible to argue that governments should enact policies people should pay more for something as fundamental as the food we eat.

Here's the argument:
British consumers have become too used to food being sold too cheaply. In an age of austerity when many are struggling it is a tricky argument to make, but the fact remains. We need an agriculture sector in a position to invest in its base to help improve our productivity and therefore our self-sufficiency. The 10% of income (down from 20% in 1970) that we spend on food does not enable that. Many may find this unpalatable but the fact is this: unless we improve our self-sufficiency, we will be at the complete mercies of those international markets. Unless we pay a little more now, we risk paying vastly more later. This is an argument that farmers, retailers and the Government needs to engage with.
This is the core of an argument made by food writer, Jay Rayner, as a sort of cod justification for refusing to give the benefit of his knowledge and expertise to the UK Government. Now I know most people think Rayner's article is about the unfolding terrors of Brexit but it isn't, it's about how Rayner thinks the UK (note the UK not Europe or the EU) needs to be more self-sufficient in its production of food because lots of terrible things might happen if we're not - most of which, surprisingly, is about food prices:
...the UK sits with dwindling self-sufficiency, in a stormy world in which food has become one of the great economic battlegrounds. Added to that is the appalling folly of Brexit, forced through by a cabal of ideologues happy to trot out falsehoods about the sunny uplands of economic joy that leaving the European Union would bring.

Instead it has resulted in a devaluation of the pound, making imports more expensive and the exporting of our food more attractive.

If, as many fear, a bad deal is done for Britain resulting in huge tariffs and penalties on trade, food price inflation is going to be in double digits for years to come. That’s if we can get hold of food at all. The people who will suffer the most, of course, are those who already have the least. For them the buying of food will use up a massive proportion of their expendable income.
Now there are a few things here that do rather matter with the first being the presumption that a UK government would impose "huge tariffs and penalties" on trade in food. And, given that this would be necessary to have the policy he wants of greater self-sufficiency, why he has such a problem with such impositions? Or, to put the question a different way, how does Rayner propose to increase the proportion of UK food consumption produced in the UK? And wouldn't this be completely impossible if we remained a member of the EU?

To give Rayner his due, he refuses to wholly embrace the 'supermarkets are totally evil' line used by many of those supporting his mission of expensive food. Rayner also slaps down the urban growing fad:
They are interesting educationally. Allotments are good for mental wellbeing and general fitness. But the carbon footprint of the food produced tends to be appalling.
The problem is that, in criticising localism, Rayner undermines the basis for his argument on food production and self-sufficiency. not be fooled by environmental arguments around localism. What matters most when judging environmental impact of food production is the full life cycle: you need to look at the carbon (and other inputs) not just of the trucks getting produce from field to fork, but in the farm buildings and machinery, the fertilisers and the workforce.
It's hard to find a more compelling argument for international free trade in agriculture than this one. A world where food is grown in the place most suited to its production rather in a less fertile location just across the road. If food miles aren't the problem (Rayner cites transport costs as 2% to 4% of total food cost) then what are the arguments for self-sufficiency at any level below the whole world?

It seems to me that Rayner, if he is to make his argument for remaining in the EU, has to recognise that the shared competence on agriculture needs to be viewed at the level of the whole union not individual member countries. And just so we're clear what this means:
It turns out that the EU is not self-sufficient in terms of all the nutrients normally locked in agricultural products and principally available for different usages: The respective self-sufficiency ratio is only 91 per cent.
I hate to make Rayner's pro-remain argument better than he does but being 91% self-sufficient in food is better than being less than 50% self-sufficient in food - and this is without any change at all to our current approach on food prices. Rayner makes a localised and protectionist argument (one that, incidentally couldn't be achieved if we stayed in the EU) focusing solely on UK food production rather than EU food production within a single market.

Rayner doesn't set out how his proposal to increase food prices, perhaps even to double those food prices will be achieved. It seems from his article that the model is essentially to dramatically reduce the area under production through environmental regulation and, therefore, to increase the costs to UK farmers. Obviously such a policy can only be achieved if two things are done: huge tariffs amounting to de facto import bans on foods that can only be produced expensively in the UK and the introduction of VAT on food so as to fund, in part, the subsidies necessary to sustain newly uneconomic farm businesses. And, to be blunt, no government is going to get away with imposing a huge tax on food, so the only way to deliver Rayner's policy is through preventing (or at best, severely restricting) imports of food. Fans of the corn laws will be delighted!

It shouldn't surprise us that Rayner doesn't get to the financial and economic logic of his argument (preferring instead horror stories about horsemeat and vague suggestions that the European Food Safety Agency, EFSA, regime would be scrapped) because it makes almost no sense at all. Not only does the logic of his argument about the EU tell us we are already more-or-less self-sufficient but also that doubling food prices has to involve a massive tax hike on food.

To return to where we started - is it morally justified to argue for government action to hugely increase food prices? For my part, I don't think it is an ethically defensible argument. Food is essential (and especially the basic nutrients Rayner considers when he talks of the 2007/8 food price spike) and government should prioritise policies that reduce prices such as relaxing planning rules to allow more efficient supermarkets. Rayner, like Tim Lang, the lefty food policy wonk of choice, fails entirely to see that the very people who lose under their policies are the poorest. And to suggest otherwise as Rayner does, is to propagate a terrible misrepresentation - the massive hike in prices his policies demands can only reduce the quality of life for millions of families in Britain. I'll be OK, Jay Rayner will be OK, but the poorest and most vulnerable in our society won't be OK.



Curmudgeon said...

"Food self-sufficiency" is a ridiculous notion of autarky. The UK is a relatively small and densely-populated country - you wouldn't expect it to be self-sufficient in a world of global trade. And how far down the scale do we go? Would you expect Malta, or Singapore, to be self-sufficient in food?

Anonymous said...

Am I missing something here ? He wants food prices to rise, and then he complains that Brexit will increase food prices.

Anonymous said...

Of course, the poorest could tune in to his radio programme and discover tasty ways with leftover quinoa.


Nigel Sedgwick said...

One of the things that surprises be about the (and this) discussion of food self-sufficiency for the UK is the failure to mention population growth.

UK population growth is around 0.63% per annum (average of 2010 to 2015, see Wikipedia article on population growth rate by country). This is a bit down on the average of 0.82% pa over the period 2005 to 2010. However, it is still 6.48% over a decade, which is another 4.25 million to be fed by 2027.

Clearly food needs are dominated by population. As self-sufficiency is becoming more difficult to achieve, do those favouring it not need to refine their objectives?

Best regards

Edward Spalton said...

The system we had prior to the EU was well suited to our circumstances. It's basis was the 1947 Agriculture Act. Food products from all the world could come here free of customs duty but local production would be protected by what were called Deficiency Payments, fixed in an annual price review, negotiated with the farming organisations by MAFF under parliamentary scrutiny. Just taking one example and putting it very crudely. If the world price for wheat was then £25 per ton delivered here and MAFF ( Ministry of Agriculture Fisheries and Food) calculated that an efficient British farm needed £30 to be viable, the Deficiency Payment would be £5 per ton. Farmers who made £27 per ton because of the higher quality they produced still got the £5 per ton.

The aim was not autarky but a degree of self sufficiency and also a saving in foreign exchange. The taxpayer paid once for a reasonable level of food security and the low price of food kept pressure off wages and benefited the less well off. Between the wars the slump in agricultural prices internationally reduced domestic agricultural production to very low levels and much land was allowed to go derelict or used only for low cost, low output " dog and stick" farming. I am writing a series of reminiscences about the transition to the European Common Agricultural Policy ( which cost a great deal more to make food dear) on under the title " The Miller's Tale"