On Wednesday 21st October I joined a Green Alliance panel on what's behind rising food prices, and what the government can do about it. Lydia Collas chaired, George James presented Green Alliance's new research, and I was alongside Michael Freedman from the Institute for Grocery Distribution and Lisa Jack from the University of Portsmouth.
Green Alliance's headline finding was worth hearing. On their basket of food, the farmgate price has risen by £1.20 since 2021, but farmers' input costs rose by £1.17 - so farm margins on that basket moved by just 3p. In other words, the farming transition doesn't look like a meaningful driver of food price inflation.
A few of the points I made from the farm side:
- Farms have taken a battering this year. The dry summer has hit yields on most cash crops, the heat hasn't helped grass, and bluetongue has added to the pressure on livestock farms. A lot of that is weather and climate rather than input prices.
- Scheme income matters because it's stable. Government schemes are often 10-20% of farm income, and one of the few income streams that gets paid whatever the weather does. That's a big part of why SFI26 sold out in under six hours, and why we reckon only around a third of the farms that wanted an agreement got one.
- Scale isn't the enemy. On the whole, the best soil and environmental management I saw on my Nuffield travels was on bigger farms that can afford the overheads, like taking unprofitable land out of production or buying a direct drill for cover crops. Small farms are often just trying to keep their heads above water and keep up with the paperwork.
Asked what government should do, I had two asks (if I'm allowed to be cheeky):
- Keep SFI. There's lots of talk about ripping it up, but it's broadly a pretty good policy. Defra just need to channel more of their budget into it so more farms can get in.
- Put more of the farm R&D budget into farmer groups and farmer-led research. A lot of that money goes to research that never really reaches farmers. Letting farmers develop new techniques themselves would get much more bang for the buck.
Thanks to Green Alliance for having me. The full recording is below, and Green Alliance will be publishing more on this in the next few weeks.
If you want the numbers behind the SFI points, see SFI26 Window 2 - £233m gone in under six hours and How do you make SFI27 reach more farms?
