The Government is focused on food security and helping families - George Eustice

In an edited extract of a statement in Parliament, the Secretary of State for Environment, Food and Rural Affairs lays out the Government response to agriculture issues.

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.

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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.

Wheat on a farm in Yorkshire. Picture: Gary Longbottom.Wheat on a farm in Yorkshire. Picture: Gary Longbottom.
Wheat on a farm in Yorkshire. Picture: Gary Longbottom.

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 per cent of all the wheat that we need.

We are 86 per cent self-sufficient in beef and fully self-sufficient in liquid milk, and we produce more lamb than we consume.

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We are also close to 100 per cent 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.

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In March, overall food prices rose by 0.2 per cent; the price of fruit actually fell in March by 1.2 per cent. In April, however, food prices rose by 1.5 per cent, 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 per cent; sugar, jams and syrups rose by two per cent; fish rose by two per cent; meat rose by 1.9 per cent; vegetables, including potatoes, rose at a lower level of 1.3 per cent; fruit remained broadly stable; and oils and fats decreased slightly by 1.1 per cent.

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 per cent of households, the amount spent on food consumption was relatively stable at around 16 per cent of household income between 2008 and 2016.

It then fell slightly to 14.5 per cent, but with the recent price pressures, we can expect it to return to those higher levels of around 16 per cent in the year ahead.

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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 support fund, where the Government are providing an additional £500m to help households with the cost of essentials.

Fertiliser prices peaked at about £1,000 per tonne in March.

Last week they fell to about £620 per tonne – it was £290 per tonne a year ago. Farmers are purchasing at that level.

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The honourable gentleman (Jim McMahon, MP for Oldham West and Royton) made a good point, which was that the cause of the pressure on household incomes has been the global spike in gas prices and the corresponding impacts on people’s energy bills –household electricity and gas bills have risen sharply.

The Government have put in place some measures to try to mitigate and dampen that, but we have always been clear that we cannot remove the impact altogether.

Of course, because people need to buy food every week, when there is pressure on the household budget, an inability to buy food is what they notice first, even if food prices have not changed dramatically from where they were previously.