High costs for the producer, high prices for the consumer: Ukrainian conflict impact in the UK

Nigel Hollett blogs following a meeting with the Welsh Government Minister for Rural Affairs which threw light on the UK and devolved government approach to the impact of the Ukrainian crisis, and offered a vital opportunity to listen and offer some recommendations.
Oil seed rape in flower
Oil seed rape in-flower in Welsh fields this week – as though in sympathy and support.

The crisis in the Ukraine is intensely distressing and our hearts go out to those directly affected. Here in Wales, food security, food prices and the cost of producing food were discussed at a meeting with the Welsh Government Rural Affairs Minister, last week. In this post since 2018, Lesley Griffiths MS has tackled drought, flood, bTB, avian ‘flu, agricultural pollution regulations and managed two post-Brexit consultations on the future of farming. Together with other key figures from the farming sector and rural economy, we shared concerns about if – or when – action might be taken to soften the blow of the cost-of-living crisis. The Minister reported that the issues would get worse before they get better.

The meeting is one of those examples where our close engagement with Welsh Government shines a light (albeit through a prism) onto UK Government policy. This is valuable for the CLA’s whole membership. Moreover, we learn more about how the Welsh Government interacts with its Westminster counterpart – even influences it.

Welsh Government Minister, Lesley Griffiths, met us hot on the heels of a meeting with Defra Minister Victoria Prentice MP. The UK Minister herself had recently met a farmer confronted with the double-whammy of higher fuel and fertiliser prices. The UK Minister is reassured to see that farm-gate prices are high, even if the current input-costs situation is negating it. The market itself will react to some problems: Ukrainian sunflower oil, for example, can be replaced by rape seed oil produced in the UK, and other alternatives in many cases. Product labelling will need to change, but it can happen.

Of course, it is the costs versus prices formula that is critical for food producers. There are things the Welsh Government can do. It’s already focused on securing and stabilising farm-payments until 2025. Most importantly, I commented to the Minister that it’s good to see the imperative of food security on the agenda again. While we support the need to address the climate and biodiversity crises, food supply has to be the priority. This may mean reviewing tree-planting policy to ensure that as much as possible of the carbon management job can be done by food - or livestock fodder – crops. It may mean protecting vulnerable productive land from forestry.

I proposed to the Minister that more must be done to address food waste: in the field, supply chain, retail – through to kitchens of all types. The yet-to-be-seen Welsh Government’s Community Food Strategy should embrace the themes: this is a piece of work that needs to be seen to be influencing the Agriculture (Wales) Bill. I explained to the Welsh Government Minister, that this vital piece of legislation needs to contain provisions, which allow Welsh Government to deal with issues and crises. This includes the capacity to ensure fairness in the supply chain, specifically between primary producers and retailers. The Welsh Government needs to involve all stakeholders to establish this.

On today’s priorities, it’s frustrating that the Welsh Government is not represented around the table of the Defra fertiliser group, although it’s reassuring that, on many levels, officials are engaged with this strategy as it develops.

I left this revealing meeting with the view that we need to keep the evolving food prices and input costs situation under constant review, collecting evidence of first, second and third order impacts, and running scenarios for the recovery period. There’s opportunity to monitor the actions taken in other nations to ensure that UK producers are not disadvantaged – and work together with some other countries for mutual benefit. It is extraordinary to recall that, six years ago, when we set-out on the mission of rebuilding a support structure for farming, food security and relatively stable prices were largely taken for granted.