2. The UK’s Food System: Function, Reach and Outcomes
The food consumed in the UK is a mix of domestic produce and food imported from elsewhere. The food system is complex, spanning not only production, transport, manufacturing, retailing and consumption, but also food waste throughout the cycle, and the effect of each stage on consumers’ nutrition, health and welfare as well as on the environment (Figure 1). There are, moreover, across a wide range of policies, a multitude of actors and arrangements mediating the system.
Figure 1: How the food system is structured
Any reconfiguration of supply chains, food processing and trade will have social, economic and environmental implications not only for the UK and the EU, but also for numerous other non-EU partner countries. The nature and extent of the changes that will arise from the UK’s intended departure from the EU are intricate and difficult to fully anticipate, which partly explains why debates on the impact of Brexit on the food system have been largely restricted to single issues.
The UK government will need to understand what citizens and consumers value about the food system if it is to design effective food policies that integrate the needs of its population (whether producers or consumers) and their concerns about health and the environment. The only logical bridge between the two competing visions of value and values is consumer choice – i.e. narrow concerns over availability and price, set against wider cultural expectations of sustainability, quality, provenance, etc.
Value versus values: what do people really care about in the food system?
The values that people associate with food are not simply encapsulated by price and provenance. For many, the way farming shapes the countryside and its environmental and social sustainability is important. Many expect that food produced unsustainably, unethically (as regards welfare) or in ways that are detrimental to health is not promoted through policy or the market.
In recent years, a number of in-depth reports on common attitudes to food in the UK have pointed to low public awareness of some of the challenges facing the food system. For example, citizens may value the countryside deeply but not necessarily connect food purchasing decisions to their impact on agriculture and the environment, partly because the link is not always obvious or transparent. However, once informed of these challenges, people tend to be more willing to change their buying and consumption habits, and/or seek assurances that government and industry are striving to reduce the sustainability risks.
One such report, published in 2013 by the consumers’ association Which?, found that many participants in its ‘citizens’ juries’ began ‘thinking more about where their food has come from and how it has been produced, considering changing the balance of what they eat (e.g. less meat or dairy or more fruit when it is in season) and reducing how much food they waste’. A 2016 Food Standards Agency report noted:
[P]articipants were surprised and concerned to realise they knew so little about the complex global food system. There was a strong desire to know more about the processes that bring food to our tables;
Participants wanted more than just data provision; they hoped that the food industry would play a critical role in consumer education, raising awareness of global challenges and empowering consumers to make better decisions about food.
When it comes to food policy then, citizens and consumers are concerned with a range of social goods, from nutrition, price and provenance to the environmental and air-quality impacts of production. The following sections discuss some of the issues related to food that, directly or indirectly, impinge on people’s values.
UK agriculture and land management
The food and agriculture sectors have a significant impact on the environment and land use. Both are responsible for up to 30 per cent of all global driven greenhouse gas emissions;and, according to one estimate, 30 per cent of global biodiversity loss is linked to livestock production.
The British landscape has been formed over centuries of agricultural management, including the acts of enclosure, whereby previously common land was amalgamated into farms, typically with single ownership – a process that began in the 13th century and continued into the early 20th century. In 2016, the area of agricultural land in the UK was 17.4 million hectares (m. ha), about 72 per cent of the UK land area, of which 3.1m. ha was used for cereals and 0.61m. ha for oilseeds. Livestock included 1.9 million dairy cows, 4.9 million pigs and 33.9 million sheep.
In 2016, the agriculture sector was responsible for 10 per cent of the UK greenhouse gas end-user emissions; of this, methane was responsible for 55 per cent and nitrous oxide 30 per cent. Greenhouse gas emissions from the sector have decreased by 19 per cent since 1990, due to a fall in animal numbers, a decrease in the use of synthetic fertilizers, and increasing imports of animal feed. Over the same period, CO2 emissions from the industrial sector (largely from the power sector) halved. Each person in the UK is thought to use about 4.6 tonnes of water per day, nearly three-quarters of which derives from water used in food production (including rainfall and irrigation water for plants and drinking water for livestock). Of the water used for agricultural products consumed in the UK, 62 per cent is used overseas, and it is ‘embedded’ in the food imported into the UK.
There is also a deep connection between the UK’s ‘green and pleasant land’ and its citizens’ cultural identities. This dates back to Elizabethan times in England, where the bucolic identity is particularly deep-rooted and the notion of landscape has also defined Scottish and Welsh identities. UK farmland provides a range of other important goods and services for society, including providing a home for biodiversity that helps support agriculture (such as pollinating insects) and for iconic biodiversity (such as skylarks, butterflies and meadow flowers), storing carbon and water and contributing to clean water and flood control. Land provides access to the countryside for recreation and amenity.
These public goods can be undermined by agriculture and its intensification. Excessive agricultural fertilizer in the countryside can enrich water courses, leading to growth of algae and a reduction in biodiversity. This could make the countryside less attractive for visitors and adds further costs to water bills for urban dwellers. Poor use of fertilizer also increases greenhouse gas and particulate emissions into the atmosphere, which can drift over cities and contribute to particulate matter affecting respiratory health.
Exporting countries’ land resources and environment
Although 52 per cent of the unprocessed products eaten in the UK in 2016 were produced nationally,recent estimates of the total area required to grow crops to meet the demands of the UK food system suggest that over two-thirds of the UK’s land footprint is overseas.
There is a clear pattern across current UK food commodity imports: imports from outside the EU tend to be associated with lower environmental performance and lower quality (Figure 2). Proponents of a ‘Global Britain’ approach to trade have, inter alia, highlighted the benefit of providing cheaper food, which is widely seen as a public good. Contrary to what may be expected, lower environmental performance of exporting countries outside the EU is not necessarily directly correlated to lower prices. EU prices on imports tend to be lower in most categories of goods – except for milk and dairy produce, and sugar. Nor is poor environmental performance simply a product of shipping distances (for example, imports from Australia and New Zealand have comparable aggregate environmental performance ratings to those of the EU).
Figure 2: The UK currently imports the largest amounts of food from EU suppliers, which have the highest environmental rankings
Post-Brexit trade deals with third countries, including food and agriculture sectors, could culminate in an increase in food imports to the UK from non-EU countries. While this would allow third countries to increase their share of exports at reduced tariffs, this must not be at the cost of exploitation, regardless of whether trade is transparent or not. For example, importing food from countries with weak social and environmental governance risks undermining the conditions – such as water supply – available for their own citizens and local markets. This could also increase the UK’s net impact on the global environment. Whether these impacts are felt locally or overseas, they will be of concern to both consumers and citizens. The challenge will be to ensure that Britain’s new trade relationships incorporate good social, environmental and welfare governance.
Economic outcomes and health
The UK’s food system contributes to a large amount of economic activity. It is also the UK’s largest industrial sector. It produced 6.4 per cent of the national total gross value added in 2016, and directly supported the livelihoods of 3.9 million people (13.1 per cent of the UK’s jobs); commercial farms alone employed 466,000 people.
Food systems also provide important social benefits with healthy diets often underpinning healthy lives. Until recently, UK food prices were close to the EU average. That said, ‘food poverty’ – the inability to afford, or to have access to, food to make up a healthy diet – has increased in recent years. Food Standards Agency figures suggest that about 21 per cent of people are marginally (13 per cent) or severely (8 per cent) food insecure – that is, when food runs out before there is money to buy more. In the 2017/18 financial year, the Trussell Trust distributed 1.33 million parcels of food (each with three days’ worth of supplies) to people in crisis, a rise of 13 per cent on the previous year.
The nutritional quality of food is often related to price, and the reality is that people living in poverty often eat what they can afford rather than what is necessarily healthy, which tends to lead to diets that are rich in calories from sugar, oil and starch, but poor in nutrients.
Poorly functioning food systems can lead to malnourishment, which covers the effects of too few nutrients and too few, or too many, calories. The nutritional quality of food is often related to price, and the reality is that people living in poverty often eat what they can afford rather than what is necessarily healthy, which tends to lead to diets that are rich in calories from sugar, oil and starch, but poor in nutrients. For instance, depending on the survey, between 26 and40 per cent of people admitted to hospital in the UK are malnourished. This scenario also results in an association between low income and obesity. Currently, it is estimated that one in four adults in the UK is obese, with almost two-thirds being overweight. The UK government estimates that the economic costs of obesity are £27 billion per year, a figure approximately equivalent to the Department for Education’s entire budget for further and higher education, including student loans. Obesity and being overweight are associated with a range of non-communicable diseases, such as type 2 diabetes, cardiovascular diseases, some cancers and even Alzheimer’s and other forms of dementia.Children who are obese can suffer ill health throughout their lifetime, and through a range of biological mechanisms can pass on to their own children an increased propensity for obesity and ill health.
EU regulations cover the safety and quality of food and feed, plant health, animal health and welfare in the EU as well as import controls on animals and goods entering the EU from third countries.
Outside the EU, the UK could choose to import produce from countries with lower environmental, welfare or safety standards than is currently allowed in the EU – whether from countries that use growth hormones and pathogen reduction treatments in meat production (a frequently cited example being chlorine-washed chicken) or genetically modified (GM) food, or countries with low environmental governance so cheaper produce can arise through damaging the environment. The argument often deployed in support of such arrangements is that governments should ‘let the market decide’ whether certain technologies or production processes are acceptable – through the demand from consumers – rather than ban them on people’s behalf.
However, there are risks with this model.
The first risk is around processing. Maintaining two separate processing streams – for GM and non-GM cereal, for example – may be prohibitively expensive, meaning that many processed foods would include GM and non-GM ingredients.
The second is that this approach fails to acknowledge the growing recognition that lower food prices are not necessarily in the public interest if they are at odds with either environmental sustainability or positive health outcomes. For example, standards of food imports have also taken centre stage in debates about a potential bilateral trade deal between the UK and the US – particularly the impact on animal welfare and environmental regulation. The risk of increased imports of different quality food could undermine the trust and satisfaction of consumers and citizens, with implications not only for the food industry but also for government.
The third is that the market may lack transparency, thus constraining people’s ability to choose. For instance, under current labelling regulations, chicken pies manufactured in the UK using imported chicken can be labelled ‘British’. Therefore, if the chicken has some perceived negative attributes associated with its ‘real’ country of origin (e.g. reared under low welfare standards), consumers would not necessarily know this from the labelling. Consumers would likely expect such ingredients to have come from the UK. In such cases, consumers could only be able to exercise their choice by paying considerably more, perhaps through buying organic produce; consumers unable to pay such a premium would have little choice.
The fourth is that importing food from countries with different standards may allow them to produce food more cheaply than UK farmers can, potentially undercutting UK markets. This, coupled with the potential for tariff changes to affect UK farm exports, risks the potential for significant structural changes to the UK farm sector. While this is clearly an issue for the sector, the potential for wider changes in the countryside has implications for citizens generally.
Food prices and availability, and the resilience of supply chains
The ‘Global Britain’ approach to trade has partly been sold on the promise of providing cheaper food. This has had some resonance given that food purchasers, at the point of sale, have tended to be more sensitive to price than to other food attributes.
What is grown in the UK is a pragmatic outcome of domestic comparative advantage (what can best be grown) and market economics (what can be grown profitably).
What is grown in the UK is, essentially, a pragmatic outcome of domestic comparative advantage (what can best be grown) and market economics (what can be grown profitably). So the impact of Brexit on food prices and availability is hard to predict. Price changes will result from an interaction between the source of imports, the tariff and non-tariff barriers (NTBs) associated with imports (see Box 1), the exchange rate (and the UK’s economic performance), and the UK agricultural sector’s response to market forces. Certainly, the latter is dynamic: if Brexit leads to higher import costs, for example on vegetables, it might make it profitable for UK horticulture to expand.
Box 1: Tariffs and non-tariff barriers (NTBs)
Tariffs are the taxes imposed at the border. Historically, they have largely been implemented both as a revenue stream and as a means of protecting local industries from being undercut. But in reality, NTBs – like phytosanitary standards and inspections – can have a much greater impact on prices than tariffs. They can make it more difficult for a country to export to another, or slow down trade flows at borders. UNCTAD estimates that the costs of meeting NTBs for lower-income countries to export to higher-income countries is three times greater than the equivalent tariff.
Furthermore, both tariffs and NTBs will vary according to product, and the final consumer price will vary greatly depending on whether the import is a finished product (e.g. cheese) or an ingredient (e.g. cereal) for processed food or the service industry, where the price of ingredients may be a small component of final price. This is particularly important for the island of Ireland, where for some products, the border is crossed multiple times along the value chain (so-called ‘pancaking’) – produced in one country, processed across the border, packaged back in the first, and so on. A hard Brexit – in particular the return of a harder border and new tariffs and NTBs – may necessitate a structural change in supply chains from a price perspective to minimize the risks of multiple imposition of tariffs/delays.
A study for the National Farmers’ Union in 2016 estimated additional costs, through NTBs, for the whole of the UK to be between 5 and 8 per cent. The potential for rapid regulatory divergence – especially around sanitary and phytosanitary standards, and particularly so in some scenarios of ‘no deal’ – may increase this figure considerably.
Meanwhile, new trade relationships and/or any structural adjustments to the UK farming sector are likely to impact the resilience of the UK’s future food system. For example, the reintroduction of inspection requirements at the borders for imports from the EU, as well as new trade relationships, could interrupt flows.
As things stand, the UK has a ‘just in time’ food system, with 5–10 days of groceries in the country (often less in the case of fresh produce). Even small interruptions can result in big impacts on price and availability, which runs the risk of hoarding or panic buying on the perception of curtailed supply. Brexit may increase the prospect of discrete supply shocks and expose the UK to greater generalized price volatility in both the short and the longer term.
Meanwhile, weak social and environmental governance in partner countries could prevent good management of water, which may create instability in fulfilling UK trade demands in a timely and efficient way. Already, many of the non-EU countries from where the UK currently imports are vulnerable to climate impacts and water scarcity such as Egypt, South Africa, Chile, Morocco and Israel. Relying on sourcing from drought-prone countries, rather than the relatively assured EU production, puts trade flows at risk from volatility in the water supply in the coming years.
Access to food and agricultural products from new trading partners also needs to be sustainable and resilient to the vagaries of changing weather patterns as the climate changes. The undercurrents induced by climate change and demand growth will make the market more competitive and dynamic in the medium term; so, the situation immediately post-Brexit and the situation in decades to come might diverge considerably. Take the example of citrus, the current supply chain for which has a significant EU component. The EU (principally Spain) provides 41 per cent of the UK’s annual citrus imports, followed by South Africa and Morocco. Climate change suggests that extreme temperatures and water scarcity are likely to limit the productivity of these sourcing locations, which may lead to the need to source citrus from other countries. Peru and Chile are likely to be the most resilient alternative sources in future. Currently, these countries supply nearer and/or potentially less demanding markets: the US and China, for instance.
Another instance of the evolving pressures on supply chains is that of bananas. UK imports account for 7 per cent of the global market, the supply chain for which is challenged by hurricanes, storms, extreme heat, extreme cold, flooding and drought. The rise in the frequency and severity of these events contributes to the several indirect effects of increased soil loss, worker displacement, damage to farmland and transportation links. Simultaneously, there is an increase in the likelihood of fungal diseases, leading to a rise in cost and the toxic burden of fungicide application. Increased frequency of shock events raises the probability of multiple and simultaneous events that could result in fiercer competition for a smaller volume of the product. Ecuador, a linchpin of the UK banana supply, already trades preferentially with the US and China due to their relative proximity and strong transport links. Against these competitors, the UK (outside the EU single market) is a less attractive target market with its relatively lower volumes and high specifications. There is a risk that the UK will not be able to agree comparably favourable trade terms at an acceptable price.