Opinion

British production should not be increased unless it makes long-term commercial sense

31 March 2016

Are the halcyon days for British strawberries long gone?

TOMMY 1
Tommy Leighton

Tommy Leighton considers the commercial, political and idealogical implications of increasing fruit and vegetable production in the UK in order to meet recommended dietary guidelines

The Food Research Collaboration’s report - Horticulture in the UK: potential for meeting dietary guideline demands – which we reported on here in March – admits in the opening paragraph of its summary that “a UK debate on the status of the horticultural industry and its potential to meet a recommended increase in consumption is long overdue”. You could say that. It’s perhaps a couple of decades too late. This is not the fault of the authors, who are simply doing the job they have been commissioned to do.  They ask whether more could be done to encourage the consumption and production of British produce and accuse the policy-makers of failing to listen to the industry’s issues.  For anyone in the industry, that is an entirely redundant question. Of course more could be done, the real question now is whether it would actually be worth it.

Arguably, most British people would ideologically say it should be. But is it? Are the economics of producing more fruit and vegetables in this country ever going to stack up to the understandable requirements of the people who grow them. Most are still born into farming; for many others, the rural life has an irresistible pull.  However, if it becomes economically unsustainable for whatever reason – all-consuming price pressure, incompetence or anything in between – who can blame anyone for looking elsewhere to make a living?

It’s pretty clear from the figures in the report why production has declined in this country and it is a simple equation that I have written about several times – here for instance - before and I won’t trawl over again other than to reiterate my view that prices paid to the grower by customers are consistently too low to support the higher cost structures that exist in the UK compared with alternative sources of perfectly good fresh produce. Sometimes that might be down to a lack of efficiency at farm level, but often its is just the plain commercial reality, with input and equipment costs, minimum and now living wages, rent etc… only pushing costs in one direction, while in every category the prices on-shelf or on plate are failing to reflect that.

In pure self-sufficiency terms, the UK has dropped its ability to feed its own people with vegetables from 58% to 39% (value) from 1995 to 2014. In the same period, according to this research, fruit self-sufficiency has actually risen by 1% to 18%. The shining light in the report appears to be soft fruit, particularly strawberries, which has arrested its decline. In 2005, 59.3% of the strawberries eaten in this country were grown here, by 2010 that had risen to 71.8%. In 2014, it was back down to 68.5% though. With volume comes an increasing expectation of price competitiveness – the British public may want to eat more British produce, as the report claims, but that does not extend to them agreeing to prop up the industry by paying through the nose for the privilege.  The halcyon days for strawberries are already pretty much gone and forgotten. Production of soft fruit could of course be increased, but at this juncture, who can really look into their crystal ball and believe that would be a more economical option than retaining a sensible status quo that accounts for both supply and demand patterns and the downward price volatility that supply upswings bring?

While fruit as a general rule has managed to maintain its creditability, the viability of most vegetable crops grown in this country has been called into question over the last 15 years. Because the price levels are where they are, buyers are understandably in a position where they are expected to shave chunks off their spend every year to raise margins. I’m sure there are very few buyers out there who do not see the issues this can cause. Inevitably, there are casualties and departures from the production scene along the way – because other more attractive commercial or lifestyle opportunities have arisen or the land just wasn’t paying for itself, or often both. If the figures in this report were more up-to-date, I’d expect them to show an even bleaker picture. Just a quick look at the cucumber scenario – which has got worse rather than better since we ran that article, gives us a snapshot of the position growers across the veg spectrum find themselves in.  Large growers are pulling out of cues altogether – I think that can only improve the situation for the industry as a whole.

I don’t believe though that the way to underpin the produce industry is through aggressive government intervention. Although there are some good examples of the use of European funding to build production businesses in the UK, if the UK government is expected to support the industry, where would it direct its attention or monies? It would be nothing but a quick fix to pour large sums of cash into the growing community, ostensibly to incentivise production growth to a level that history tells us will see prices tumble and threaten sustainability. An extension of this story in The Independent in the last couple of days would see the problem tackled from the other end of the scale if it was acted upon – but the government is not going to upset further the already unsteady retail apple cart and jeopardise hundreds of thousands of jobs by giving the adjudicator a truly venomous whip to crack.

It is very easy to argue that the government could support the industry in all sorts of ways with tax and/or financial incentives, but that’s the same for every industry and while we know healthy fruit and vegetables are as important a part of the future of this country’s food provision as they always have been, it’s not easy to convince a politician that they are the ticket to the hearts of legions of voters. It could invest more heavily in research and development to strengthen the sector’s future, but that’s the long game and there’s no obvious short-term gain for a minister in that either. The industry will stand on its own two feet as it has always done. It has a lot of additional cost thrown at it that it cannot control. But there are undoubtedly inefficiencies in the supply chain still, and there will be advances in growing, harvesting and storage techniques, varieties and other aspects of the industry that make it more able to turn a profit. There may also be a more enlightened approach to the industry from its customers, the buyers across the land who obviously need to make money themselves, but will have a significantly harder time doing that without a thriving UK fresh produce sector to call upon.

The report criticises government for highlighting exports in its strategic thinking, but that’s folly. Market forces have dictated that UK growers should export more for some time and in my opinion, the government is spot-on in promoting that perspective. I’m not advocating that domestic production should be replaced by imports, but look at the constraints of growing in this country, for a small band of highly competitive customers. It may sound simplistic, but why not widen that geographical network? Rather than increasing the volume in circulation in a market that insists on crushing the value out of anything it can get its hands on in enough quantity, reduce the availability of British produce to the British buyers. If they want it that much, then eventually they’ll have to pay for it. If they don’t, well at least we might have a more viable production framework in the UK, even if UK products are being increasingly enjoyed overseas.

There are plenty of growers successfully doing that already. On the other side of the coin though, there are also plenty more pulling out of crops, sectors and the industry each year to plough another furrow through life. The report’s authors professed themselves to be “genuinely shocked” by the imbalance between UK supply and demand in horticulture. Well, it’s their shock that amazes me. Why were they in the least bit surprised to find weak links in the chain, such as low wages, reliance on migrant labour, a suspicion of low returns to growers, a waste of land and resources? One of those authors, Professor Tim Lang, said these factors should “receive more attention from academics and civil society”. He’s more than aware though that this is nothing new – the situation has built gradually over decades. The public, as he suggests, does need to be made more aware of the stark situation its food-purchasing habits unwittingly have imposed on its domestic food-supply chain. The government could and should play a supportive role in ensuring that we have a healthy fruit and vegetable production industry in the UK.

We have a growing population, and much as we hear that people want to eat British food, we likewise hear all the time of the country’s desire to consume a wider variety of foods and drink from all over the world. I don’t think it's the gap between supply and demand that’s the major issue. That has been created by market forces, not by any innate desire of the industry or the consumer to eat more imported food. Whether one believes it needs narrowing or otherwise, that demand-supply gap can only be narrowed if the real causes for its widening are addressed.The health of the nation lay behind the reasons to commission this report; it’s a fact that the nutritional intake of the nation will move closer to the government’s dietary guidelines by increasing consumption of fruit and vegetables from Great Britain or whichever other part of the world.

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