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Thursday, 10 March 2011

Britain's food basket

The UK has not been self sufficient in food since the 19th century. The Great and second wars brought the realisation that around half our butter, oils, meat, sugar and fruits are imported. Sure, we can live for a while on home-grown turnips and spuds; indeed the wartime cook book was heavy on a variety of dishes made from turnips, onions and potatoes, sometimes in a 'pastry' case made from, er, potatoes, and sometimes with a turnip and onion sauce. After the war we tried greater self-sufficiency in sugar; East Anglia was until recently covered in small mountains of sugar-beet, with 32-tonne artics rumbling through the lanes during the 'campaign' carrying the cargo to be turned into sugar in vast, smelly National sugar plants. We gave that up, content to go back to imported cane sugar, the sites of the sugar beet factories have been turned into bijou housing estates and the region's horses missing their nutritious diet of the flaky, chewy, gritty, sweet beet pulp by-product (it was actually quite good; a handful scooped from feed bin to Barbour pocket often kept me going during a cold afternoon). 

The Speccie's graph (below) showing our annual food inflation running at 6%, about six times that in France, doesn't surprise me. The only reason the French went hungry during the last lot was because the Hun ate all their pies. 

Now take a look at where our food comes from:

Add to that the vast, transport-heavy distribution networks operated by the big supermarket chains that mean that the cabbage in your local Ipswich Tesco may have been grown a mile away but may have been taken to Bridgend and back before you can buy it and you soon start to see that a massive component of our food cost is transport - oil. 

Whilst Jackart has undoubtedly got it right in part that QE has moved speculation away from property to commodities including oil, speculative investment alone can't account for all of the sustained oil price rise, and if high oil prices are here to stay then only two changes will lower food costs. The first is lowered dependence on imports, the second is a more localised distribution and sales network. It just might be that Tesco has passed it's zenith, and is now in a period of managed decline as the era of vast supermarkets and their depots and oil-hungry distribution networks comes to an end. 


agn said...

On the second graph, I refuse to believe that some 30% of UK food comes from EFTA (this consisting of Norway, Iceland, Switzerland and Liechtenstein). Some cod from Iceland, yes, some Swiss cheese.

But I think you mean the EEA... :-)

Raedwald said...

It's DEFRA's shorthand for the EU + EFTA nations - apols, should have noted this.

formertory said...

If we grow more food here we need to saturate the land with more artificial fertilisers because we farm intensively. Most of these seem to be made to some degree or other from oil and oil products. So we can suffer the price of transporting foodstuffs and allow the Third World to trade its way to the 21st century, or we can pay subsidies to wealthy first world farmers to buy fertiliser at higher prices.

Anonymous said...

Transport costs are certainly rising - and rising fast. A good friend of mine is a director in a European haulage company and he tells me that haulage prices have been suppressed by agressive buyers for a decade now; stubbornly refusing the haulier any redress in contract for increases in operational costs, such as fuel. But the lid blew off in January and haulage rates per mile or per cargo are on a fast moving upward escalator with buyers accepting rises with little resistance. But guess who pays? Yep, you and me, coz these hikes are being passed on to the consumer.

QE (call a spade a spade, it's printed money!) plays a part in this - it just has too. You cannot "inflate" an economy with hundreds of billions of pounds and expect no inflation. Also, the supermarkets have thrown the towel in on prices and just let them rise to see just how far they can go before the riots start - hence the jump in supermarket profits recently reported.

All in all, we Britons are in a very, very bad place. Britain's taxation is now the highest in the EU, and so too are our food and fuel prices, and indeed inflation of these items.

For my, I have long been a devotee of Aldi. Just as everyone else puts up wine by 10%, Aldi puts it down 10%. God bless 'em!

Coney Island

Gordo said...

Reduce the population, by about 8 or 9 million.

Mr Ecks said...

How about a 50-75-100 % reduction in the tax on petrol/diesal?

Anonymous said...

Gordo wrote: Reduce the population, by about 8 or 9 million

Good idea. We can get rid of the RoP for starters.

Blue Eyes said...

"the cabbage in your local Ipswich Tesco may have been grown a mile away but may have been taken to Bridgend and back before you can buy it"

If the likes of Tesco really are doing this then they are bloody stupid. A rise in the fuel price is likely to make the big chains think even more carefully about their supply chains.

With a long-term increase in fuel costs things like Kenyan beans will start to feel a bit too expensive for most people. However it has been shown that growing tomatoes in polytunnels in the UK is more energy intensive than flying winter tomatoes in from Spain. I don't think an abrupt change is close.