What does Brexit mean for food prices?

There has been much talk of late about the price of food. With Brexit meaning a falling pound and possible food shortages and, more fundamentally, climate change affecting farming globally, debate is growing about possible price spikes.

The price of food reflects many things but rarely the real costs of sustainable production, which causes many problems for farmers and our environment. But for imports, the price may also reflect the burden of a ‘tariff’ – or tax – paid at the official point of entry to the country or economic bloc like the EU. Food companies sometimes pass that extra cost down to us, the consumers. And as we teeter on the brink of Brexit, this has now become a big thing we need to get to grips with.

Tariffs could increase the price of food but will potentially protect some of our UK farmers from unfair competition from overseas producers, who may have lower labour costs, and lower standards of food safety, environmental or animal welfare.  As part of the EU, we currently have complex tariffs on many food imports – we vary the tariff levels for all sorts of reasons and import food with either no tariff at all, low or high tariffs. Tariffs on horticulture or lamb can vary seasonably for instance, as they are based on the value of the items, which varies according to availability.  

When we leave we can choose our tariff rates, but so can our competitors, so the risk of ‘tit for tat’ tariffs wars is high. Some of the fiercest debate comes from raw materials, such as grains or oils, as global food corporations want the cheapest raw materials they can buy, so they tend to be against any tariffs at all.

Preferably, using tariffs should be about what we want to nurture. We may well need to impose tariffs to protect our beef producers, for instance, as it costs so much more to produce beef here than, say the US. But what about strawberries, or oats, and the biggest question of all: who ultimately pays?

It is always worth considering who really gets the bulk of the price you pay for your food. UK farmers get about eight per cent of the pot of money spent on food, compared to 26 per cent going to the manufacturers like Coca Cola, Findus and Associated British Foods.   A recent Farmers Weekly analysis showed farm profits have dropped 43 per cent since 1973 since we joined the EU, while global analysis suggests food workers get a pitiful return for their labours in supplying us. An upcoming report we are launching at Sustain, Super Market Failure, will suggest this poor distribution of the food pound needs urgent attention. Farmers, workers, farm animals, the environment and even consumers are all losers when food pricing is not fair.

So, governments need to sort out much, much more to ensure prices reflect the true ethical and environmental costs of production. They need to regulate to make costs transparent and ensure that supply chains are fair. They must guarantee vulnerable consumers have decent incomes and safety nets so they can eat well, and they should ensure everyone can choose a diet without being manipulated by greedy junk food promoters.

Tariffs are part of the picture but as citizens we need to demand our politicians do so much more. And as consumers we can choose wisely. Getting your food from as close to the farmer or grower as possible has to be a good thing, and the more farmers who can collaborate and coordinate to sell more directly or via simpler chains, the better.