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End To Cheap Food Is Good News For World Farming

by 5m Editor
23 July 2007, at 1:38pm

UK - Farmers have warned that the days of cheap food are numbered. Speaking at the Royal Welsh Show, National Farmers' Union President Peter Kendall, said consumers must expect to pay more for their food in future. And, he claimed that rising prices would be good for the rural economy, the countryside, the environment and the developing World.

Mr Kendall, an arable farmer from East Bedfordshire, said that food had never been cheaper, and that the constant pressure to drive down retail prices was the reason why farming had faced so many difficulties during the past 20 years.

"It's time that this trend was reversed and we do not need to apologise for it. We don’t want consumers to think farmers are being greedy, but our costs of production and the market will dictate prices from now on and you can’t have cheap food without damaging your security of supply or the environment,” said Mr. Kendall.

Figures show that UK families currently spend less than none per cent of their income on food. In the 1940s, more than 20 per cent of the household budget was spent on food.

“It’s been a disappointing 20 years and I’m glad we’re moving out of the era of cheap food," he added. "Farmgate prices have lagged behind rises in production costs and in the cost of living for far to long; even for sectors that have experienced increases in recent months, like dairy and cereals, farmgate prices are still lower than they had been ten years ago." Mr Kendall said that rising farmgate prices were long overdue and they cannot come at a better time for cereal growers, dairy and livestock farmers. Current weather conditions were blighting British Agriculture, supplies would be extremely tight post-harvest and farmers needed a boost in revenues.

Mr Kendall said that other factors were also altering the agricultural production on a global scale and food supply was becoming increasingly unpredictable. The heightened demand for crops for biofuel processing, the westernisation of Asia's consumers and climate change were highly significant factors that were driving food prices skywards.

“We are witnessing a sea-change in world commodity markets and this should be reflected at the farm level, otherwise it will be all too clear that the supply chain is not working properly,” he said. "Retailers must realise that farmers won’t stay in production for the long term unless they get a fair price for their produce. Farmgate prices in the livestock and dairy sectors have to rise to reflect the substantial rise in cereals and oilseeds prices and other inputs of production," he explained.

Retail opposition

However, consumer experts warn that food price rises across the board could have dire consequences for public health. Many believe that if the cost of living goes up, but the money in a person’s wage packet does not reflect these inflationary rises, it could meant that those with only a fixed budget to buy groceries will compromise on quality and that could have consequences for their health.

The cost of the average shopping trolley has been in freefall in the last 20 years. According to the British Retail Consortium (BRC) it is now seven per cent cheaper than it was in 2000 and 15 per cent cheaper than in 1990.

The BRC, which represents the UK's large retailers, said this trend would continue and the only significant price rises consumers were likely to see were seasonal ones, such as the current increases in the cost of bread or coffee. The idea that there would be some sort of 'seismic shift' in food prices and what consumers have to pay was simply not true, it said

The Food and Drink Federation, which represents food manufacturers, said the food industry has seen a number of pressures on prices and felt that these would be passed on to the consumer. However, it was uncertain if this signalled an end to an era of cheap food.

5m Editor