How will the UK weather
food shortages, asks James Meadway

Food shortages and rationing have hit Britain’s supermarkets, with Asda and Morrisons among those restricting customers’ purchases of everyday items including lettuce, tomatoes and cucumbers. The immediate cause for this is bad harvests in southern Europe and North Africa, the result of what the media reports as “poor weather” towards the end of last year.

First, it’s best to be clear that this mostly isn’t about Brexit, or at least not directly. It’s true that the complications with trade that the Brexit deal has brought have added some costs to the grocery shop. The Centre for Economic Performance estimates that food prices are 3 per cent higher over the last year as a result of Brexit, resulting from the additional red tape that buying food from the EU now involves.

This isn’t nothing – the researchers think it works out as an extra £210 a year for each household, on average. But food price inflation is now running at 16 per cent a year, so that 3 per cent is only a small part of the whole rise in prices. Brexit has had consequences, as we will see, but it’s not the main culprit here.

The big increase in prices we’ve seen in Britain is due to the same things that everyone else, right across the world, has experienced over the last 18 months or so. Russia’s invasion of Ukraine has had spectacular economic impacts, with supplies from the world’s largest exporters of grain and other essential foods severely disrupted. Ukraine’s harvests, understandably, were very poor last year, with about one-quarter of its farmland out of use.

But supplies from Russia have been restricted by sanctions; and Russia is also the world’s largest exporter of raw materials for fertiliser. The resulting shortages have seen fertiliser prices soar, leading farmers across the world, in turn, to pull back on the amount they use, cutting the size of their harvests.

Meanwhile, the surge in energy prices has whacked up the cost of transport and, for growers reliant on heating their greenhouses in colder parts of the world, made growing crops like tomatoes uneconomical. Add all this together and it turns the war into a significant reduction in the world’s supplies of foods.

But there is another global issue. The casual reporting of “poor weather” affecting harvests disguises something truly ominous. As climate change has accelerated, the world’s weather systems are being thrown into chaos. Extreme weather events, from floods to droughts, are multiplying. And extreme weather affects harvests right across the world. Last year, for example, saw extreme heat across Europe that reduced potato and sugar beet harvests by up to 50 per cent in Britain. Grain maize harvests in Europe are forecast to be down 16 per cent. Further afield, coffee harvests in Brazil have been hammered by frosts, followed by droughts. Cattle ranchers and citrus fruit growers in the southern states of the US have been hit by combinations of floods, hurricanes, tornadoes and extreme heat.

Barely a week goes past, in fact, without some report of “poor weather” damaging our food supplies. This is climate change in action, and its consequences are only likely to worsen over the coming years. The respected foreign policy think tank Chatham House has warned of “growing threats” to global food security. Already, the UN is warning of 345 million people facing starvation across the globe over the next year, typically in poorer countries. For the developed world, the primary impacts are likely to be rising prices in the first instance with, as we have seen, intermittent shortages and rationing.

But mass starvation and impoverishment don’t need to be bad news for everyone! As food prices have soared, the giant agribusinesses that dominate the world’s food systems have made record profits. Like the fossil fuel companies exploiting soaring gas and oil prices, the four biggest grain traders globally have reported all-time high revenues and profits. Oxfam reports that “food billionaires” – the ultra-rich whose wealth comes mainly from owning food businesses – have seen their wealth grow by 42 per cent. Speculation, meanwhile, has amplified the problem, with speculators using borrowed money to drive up global prices.

Meanwhile, many big producers of agricultural produce, like Malaysia and India, have imposed bans on exports to make sure they can meet the needs of their own populations first. But this has the effect of worsening the problem of low global supplies. Producers for export will sell to the highest bidder, with richer countries – or groups of countries, like the EU – able to outbid others. Moroccan suppliers of tomatoes, for example, have found the EU trade deal more valuable than their post-Brexit deal with Britain. The result has been a tomato shortage in Britain.

Industry forecasts suggest food prices will continue to rise steeply over the first months of this year as the impacts of bad harvests play out. We should then see some improvement, and perhaps even a glut of some crops currently restricted. But the longer term picture is bleak.

We need a thorough overhaul of how we grow and distribute our food. Reducing the power of agribusinesses and speculators to profit from instability would help ease price spikes and shortages. For Britain, reducing dependency on food and fertiliser imports, supporting local growers and serious investment in new technologies – from super-sensitive digital monitoring of growing conditions to vertical farming – could all help reduce our exposure to global conditions.

James Meadway is an economist and director of the Progressive Economy Forum, an independent thinktank (progressiveeconomyforum.com)