Food Prices

Environment, Food and Rural Affairs – in the House of Commons on 10th March 2022.

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Photo of Kate Osborne Kate Osborne Labour, Jarrow

What recent assessment his Department has made of the impact of food price rises on household budgets.

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

International commodity prices are heavily influenced by factors such as energy costs and exchange rates. Recent pressures have been sustained and we have seen food price inflation rise to 4.4% in January, up from 4.2% in December. Events in Ukraine and the effect of that on energy prices are likely to have further impacts, which we are monitoring closely. Our UK food security report, published in December, included analysis of food security at household level.

Photo of Kate Osborne Kate Osborne Labour, Jarrow

The cost of living is rocketing and the price of food has risen by 3.9% year on year. Food banks such as Hebburn Helps and Bede’s Helping Hands in my constituency tell me that they are as busy as ever, as more and more people are being driven into poverty, having to choose between eating and heating. Does the Minister agree that the time has now come for the Chancellor to commit to ending food poverty in the UK by including in his forthcoming spring statement all the measures set out in the “Right to Food” campaign of my hon. Friend Ian Byrne to achieve the permanent eradication of hunger in the UK?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

The hon. Lady will be aware that the Government have put in place a number of measures to help households, particularly with the sharp increase in energy costs that they face. The Chancellor and the Secretary of State for Business, Energy and Industrial Strategy have set those out previously. In addition, we have other schemes such as the holiday activity programme to support those suffering from food insecurity and additional food costs, and we have given local authorities additional measures to help them with those struggling to afford food.

Photo of Neil Parish Neil Parish Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

With Putin’s murderous regime wreaking havoc on Ukraine and murdering innocent women and children, there is a direct impact on food and grain prices. Ukraine has stopped exports, as have many other countries. What will the Secretary of State do to protect grain supplies in this country? Secondly, what talks will he have with the retailers to ensure that we can share some of the pain of the costs, which pig and poultry just cannot stand? Thirdly, how are we going to create greater food security and grow more grain in this country, which we are in need of?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

On my hon. Friend’s final point, we published a highly comprehensive analysis of our food security, including a focus on the production to supply ratio, which showed that we produce roughly three quarters of the food that we are able to grow and consume here. On his specific point, we were aware of the risk of these events in Ukraine and set up a dedicated group within DEFRA at the beginning of January to do contingency planning for the possible impacts on food. We do not import wheat from Ukraine, or only very small quantities; we are largely self-sufficient in wheat and we import the balance from Canada. However, we are looking at the cost of inputs, particularly for the livestock sector, such as poultry.

Photo of Ben Lake Ben Lake Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Environment, Food and Rural Affairs), Shadow PC Spokesperson (Education), Shadow PC Spokesperson (Digital, Culture, Media & Sport), Shadow PC Spokesperson (Health and Social Care), Shadow PC Spokesperson (Housing, Communities & Local Government), Shadow PC Spokesperson (The Constitution and Welsh Affairs)

The Secretary of State will be aware of widespread concern that the rising cost of fertiliser will add further inflationary pressures to the price of food. Indeed, I have been told by one farmer of a quote for £930 a tonne plus VAT for a shipment that last year cost about £280. What steps can the Government take to address this crisis and ensure that our food security is not undermined?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

The hon. Gentleman raises an important point. Fertiliser prices had spiked even before current events in Ukraine, because the cost of ammonium nitrate is heavily dependent on the cost of gas, as he knows. We have been working closely with our own domestic producer in the UK to ensure that it maintains production. Most farms will now have purchased their fertiliser and have it on farm for the current growing season or the beginning of it, but we are setting up a special group with industry to work on this challenge and to identify better long-term solutions that rely less on the price of gas.

Photo of Dr Caroline Johnson Dr Caroline Johnson Conservative, Sleaford and North Hykeham

Price rises are having an adverse effect on the household budgets of people across my constituency, perhaps none more so than those people who are off the gas grid and must buy heating oil or gas in bulk. They are not protected by the Government’s energy cap. Can my right hon. Friend tell me what he is doing and what work he is doing with BEIS and the Treasury to help to protect my constituents from bills that may have more than doubled?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

I have had conversations with the Business Secretary on this matter. The disruptions we are seeing, particularly following events in Ukraine, are having some impact on the supply of household heating oil for those who are not on the grid. I know he is well aware of these issues and his Department is working closely on it.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Environment, Food and Rural Affairs)

Russia’s appalling invasion of Ukraine clearly drastically affects Ukraine’s ability to produce grain and many other foodstuffs, threatening not only price increases, but global famine and disease spread. Domestically, our farmers are experiencing increased seed, fertiliser and transport costs, and the UK, lacking the leverage it once had as part of the EU, is now a small player on the global market. The Secretary of State mentioned a food security review and summits. Exactly what actions is his Department taking to ensure food security in the UK and stabilise food prices, and what plans are the Government making to assist developing countries to meet their needs?

Photo of George Eustice George Eustice The Secretary of State for Environment, Food and Rural Affairs

Tomorrow, I will attend a special session of the G7 where, with other like-minded countries, we will discuss some of those issues and the impact on international commodity prices. It is inevitable that when a country such as Russia under Putin takes such steps, there will be some turbulence in the market. It is essential that the world community shows solidarity in taking tough action on sanctions, which we will do. It is inevitable that there will be some collateral damage to our own interests and prices, but nevertheless we must see that through and impose those sanctions where they are needed in order to bring the regime to its senses.