Food Price Inflation — House of Commons, 2022-05-19
Topic: Agriculture
Charles George Eustice (Conservative, Centre-right): The global spike in oil and gas prices has affected the price of agricultural commodities. Agricultural commodity prices have always been closely correlated with energy costs, since gas is used to manufacture fertiliser and fuel energy is needed throughout the food chain. Gas prices were rising as we emerged from the pandemic, but the invasion of Ukraine has caused some additional turbulence in international commodity markets. I have already set out measures to support farmers and growers in England ahead of the coming growing season. Those measures are not a silver bullet, but they will help farmers to manage some of their input costs from fertilisers The turbulence of the market has brought into focus again the importance of a resilient global supply chain and the importance to our national resilience of having strong domestic food production. In the UK, we have a high degree of food security. We are largely self-sufficient in wheat production, growing 88% of all the wheat that we need. We are 86% self-sufficient in beef and fully self-sufficient in liquid milk, and we produce more lamb than we consume. We are also close to 100% self-sufficient in poultry. Sectors such as soft fruit have seen a trend towards greater self-sufficiency in recent years because of the extended UK season As part of a global market, however, there have been pressures on input costs and prices. As a result of those rising input costs, there are of course also some pressures on households, predominantly as a result of the energy costs. There have also been some rises in food prices in recent months, although the ferocity of retail competition means that price pressures have been contained on certain product lines In March, overall food prices rose by 0.2%; the price of fruit actually fell in March by 1.2%. In April, however, food prices rose by 1.5%, which is a faster rise than we have seen in some years. If we look at the price of specific categories of food, in April, bread and cereals rose by 2.2%; sugar, jams and syrups rose by 2%; fish rose by 2%; meat rose by 1.9%; vegetables, including potatoes, rose at a lower level of 1.3%; fruit remained broadly stable; and oils and fats decreased slightly by 1.1% The single most important measure of household food security and the affordability of food remains the household food survey that the Department for Environment, Food and Rural Affairs has run for many decades. That shows that, among the poorest 20% of households, the amount spent on food consumption was relatively stable at around 16% of household income between 2008 and 2016. It then fell slightly to 14.5%, but with the recent price pressures, we can expect it to return to those higher levels of around 16% in the year ahead We are monitoring the situation. The Government have put in place an unprecedented package of support to help those who need it. That includes targeted cost of living support for households most in need through the household support fund, where the Government are providing an additional £500 million to help households with the cost of essentials.