As food prices surge worldwide a number of countries are looking to restrict their exports of staples to show their own populations they are doing something about shortages and food inflation. The more restrictions there are the poorer the world will be. International specialisation is a good thing. It means we can all benefit from production where the costs are lowest, the climate is most suited and the skills well honed.
However, when people get hungry or when populations get angry about food prices governments have to listen. They may often act in ways which relieve the temporary pressure on them whilst making the underlying position worse. In this case democracies like India, bureaucracies like the EU, and tyrannies can all act in the same perverse way, to “protect†domestic husbandry and impede world trade. One of the most worrying features of the Obama offering to the US public is the incipient protectionism.
In such a world the UK’s position is very exposed. Under the current government we have become ever more reliant on imported foods. We have always been dependent on overseas trade to bring us tropical and Mediterranean fruits. We are now also dependent on overseas trade for many temperate fruits, vegetables, meat and other basics. The EU’s Common Agricultural Policy, designed on the continent with a view to overcome World War style shortages, has succeeded in damaging UK agriculture substantially. The Common Fisheries Policy has been a hammer blow to our once flourishing and well stocked fishery.
The EU has conspired against the UK in several ways. The EU’s strong and clumsy responses to animal disease prevented UK meat trade for long periods and undermined the reputation of some British products at crucial times. The distribution of subsidies meant it was often better for a UK farmer to set aside the land for environmental purposes rather than to grow anything. The UK was left short of milk quota for its own purposes so ended up having to import milk products from the continent. Our fishery was opened up to predatory large trawlers from Spain, Denmark and other European maritime centres, leading to overfishing and damage to the sea bed.
Today the threat of world shortages should concentrate the mind of Ministers and policy makers. We cannot afford to be locked in to these failed and backward looking policies. At current market prices the UK should be able to produce a lot more of its grain, meat and milk without subsidy. It does not need EU interference making that more difficult. We need an independent fishery where we can pace the use of it to restore the stocks, supervising the kind of nets and boats used to limit the damage.
The UK is a relatively rich country, and will be able to import food at a price to meet its demands. Lower income families will be squeezed. However, the reason why our dependence on imported food has risen so much is partly the unfair and unsuccessful policies pursued by the EU in this field. In a world lurching to some more protectionism we need to be aware, and to be allowing the market to strengthen the amount we produce at home. There is plenty of land to bring back into production, and plenty of scope for more market gardening, orchards, vineyards and the rest.
June 7, 2008
Slight flaw in your plan. Increasing local production of food would not help. The food produced, assuming no protectionism, will be priced at the market rate and just as likely exported than increasing supply and lowering prices here.
The truth is the UK cannot complete on the world stage in agriculture. We should buy our lamb from New Zealand, beef from Argentina, mange-tout from Kenya,… and we should export what we are competitive at – services.
The solution, which you dare not say, is opt-out of the CFP and CAP which would mean leaving the EU.
June 7, 2008
"In such a world the UK’s position is very exposed."
Too right, yet the British state is undertaking to engineer a massive growth in our population, ( through immigration) and not a peep out of our representatives in Parliament in protest.
June 7, 2008
Very good analysis Mr Redwood. All nations would benefit from becoming more self-sufficient. The free-trade vs protectionism arguments do tend to put people into camps when what we need is a sensible balance between the two. If we can produce enough food in quantity for our domestic market we can keep the price low and avoid the unpredictable nature of currency differentials and imported inflation.
I should like to see the Conservative party award special tax status to British producers who supply the domestic market. Allow these producers to keep more of their profits to provide investment and incentive. If we want British entrepreneurs to supply the domestic market we have to make it worth their while to do so. We should even allow new producers to operate tax-free for a while to allow them time to build up a job-creating infrastructure. Too many producers are killed off by tax and regulation before they have even had time to get off the ground.
June 7, 2008
Sadly John, it is not just food from abroad we are reliant on, it is virtually everything else too.
June 7, 2008
I agree completely, but I am optimistic that a different approach will be taken once it becomes significantly cheaper to grow in Britain than to import. Change will occur, and the EU will have to adapt to the circumstances and allow countries to become self-sufficient again.
We are extrememly well placed in this country and self-sufficiency should be possible for us. One of the main tasks of an incoming government should be to prepare Britain for the large-scale changes that will have to occur in order to secure our continued prosperity.
June 7, 2008
I agree with you that toe root cause is not the lack of land available to food prodution that is the issue, but that much land world-wide is no longer farmed for food.
In the UK and the rest of Europe, farmers are being paid to keep land out of use for food production. This was done to stop the beef and butter mountains et al and shows just how much food we could grow given the chance. Much land is now being converted from food to bio-fuel production, which will squeeze production and prices even more.
Time we pulled out of the power hungry EEC I think, and started digging for victory again!
June 8, 2008
The UK is a relatively rich country ? The wealth in our homes is Perceived wealth, the wealth in the stock market is largely precieved wealth also.
A country needs to produce and trade real goods.
would be be in this position if they hadn't given our fishing rights away.
We had some of the Best fishing waters in the world.
http://www.infowars.com/?p=2555
June 8, 2008
You are right John Redwood, but why has it taken you politicians so long? And why are you so scared to even discuss the frightful topic of world overpopulation? [ In fact there are one and a half million more mouths to feed every week!]. Currently, the rate of increase of world food production is falling behind the extra growth of world population. Frankly as an Agricultural Economist, I don't think the world has a cat in hell of increasing total world food output by 50% in the next 20 years. We must control the world population increase![ see the websites of the F A O , and the Optimum Population Trust.]
Regards, David Vinter, Joint Hons Economics/ Agricultural Economics, Nottingham University.
June 8, 2008
The blame lies entirely with farmers. It's obvious when there is nothing, NOTHING that we cannot import cheaper than these over subsidised (disparaging words left out) farmers can grow or produce. Milk? France. Grain? Estonia and Canada. It’s cheaper to snuff a lamb in New Zealand, stick him in a fridge ship with a few thousand of his brothers, trundle the ship round the world then truck him to the shop than it is for an English farmer to snuff his lamb and carry it to the same shop in the back of his subsidised Range Rover.
June 8, 2008
This says it all, from Christopher Booker……"But the central point the British industry's leaders tried to put to Mr Shaw at his Smith Square office on Tuesday was that the British fishermen are in an even worse plight than many of their European competitors. This is because at least other more sympathetic governments have found ways under EU rules to give their fishermen financial help…..[don't they always?]
Spain, for instance, is allowed to give £98 million to its fishermen, to enable them "to stay competitive".France, which can give £106 million, has every intention of doing so. But although Britain is permitted by Brussels to give £78 million, Mr Shaw made it clear to the fishermen on Tuesday that they cannot expect a penny. The Government, he told them, "does not have the financial resources available"…[78 million….yet we give hundreds of millions, over a billion a month, to this rotten and corrupt EU]"
The real subtext of Mr Shaw's refusal was spelled out by Commissioner Borg in Brussels, when he said that the future for "European fisheries" lay not in "false solutions" but in "restructuring, to create a smaller, more fuel-efficient fleet". In other words, if thousands more British fishermen go to the wall, that must be part of the EU's long-term solution. Their French and Spanish competitors will be grateful that their governments do not agree with the immovable Mr Shaw. …..That is why, by the end of the year, a great many more of THEM will have survived than now seems likely in the country which, until it gave its fishing waters away to Brussels in 1973, had the largest fishing fleet in Europe.
June 8, 2008
Unfortunately it all comes back to the EU, Heath gave away our control of the fishing grounds, Brussels "allowed" our fishermen to fish – just a little – but spent millions on refurbishing old boats and building new ones for French and Spanish fishermen, we paid as usual. CAP was designed to award French, German part timers, Spanish and Italian farmers whose efficiency was way below ours. Quotas were set up, all biased against our Country. But did our politicians of any colour tell us, not a bit, they lied. We were told by a number of economists that food prices would rise by 20%, a figure derided by the politicians, but true, they did. By the way, remember "free trade", major benefit of the EEC as it was, except of course, that when French farmers did not like it they stopped our lorries and burned the livestock. Big benefit that was, did anyone apologise. No, didn't think so.
So, we are stuck with an enemy who is out to defeat us but makes most of our laws. This is against the "Bill of Rights" which forbids taking orders from a foreign power, but the latest from Cameron a few days ago is that once Lisbon treaty is passed we cannot do anything about it. But by definition it is illegal to give away our sovereignty which the Treaty most certainly does.
June 9, 2008
This is an excellent proposal and one which no doubt disgruntle the europhiles on the Government benches.