Memorandum submitted by Chatham House (SFS 66)



How robust is the current UK food system?

1. The UK's food system is essentially robust in terms of its ability to maintain consumer access to food in the face of stresses and shocks. But that status cannot be taken for granted. There is a need for active monitoring and management of contingent risks. There are some structural weaknesses in the domestic supply base. And there is a set of systemic challenges to the food system that require action now if its resilience is not to be tested more severely in the decades ahead.

2. In discussions of security and supply, it is difficult to talk sensibly about a single picture for 'food' as a whole because of the diversity within the system. In farming, the issues facing cereal growers, poultry producers, horticulture, etc., vary. This diversity is also present further down the value chain in food processing and manufacturing.

3. A great variety of foods are supplied to consumers reliably, week in, week out. There are powerful incentives for individual retailers and their suppliers to identify and manage risks to supply. When individual sources of supply go offline, whether for predictable reasons (such as seasonality of supply) or unpredictable reasons (such as animal disease outbreaks or severe weather), the food chain has proven adept at sourcing alternatives. Indeed, in modern times UK consumers enjoy access to a greater variety of food, at more affordable prices, and with more continuity of supply than any time in history. This access is, for many, something to be taken for granted.

4. The UK enjoys access to a variety of food sources that helps diversify risk. It sits within a single European market for food and, of the food that we do not produce ourselves in this country, the majority is imported from within the EU, or members of European Economic Area (e.g. fish from Norway and Iceland). The UK imports the remainder of its food from a wide variety of different countries. Many of these imports are of foods that cannot be grown here - rice, bananas, oranges, etc.

5. There is a continuing need to monitor and manage threats to the food supply and distribution posed by the basket of contingent risks that remain present. For example:

o Food contamination. Food safety has greatly improved over the years. Understanding of food related risks and how they are linked to methods of production, processing, storage etc. is increasing, as is our ability to detect contaminants in our food. But there remains potential for accidental or malicious contamination, that could affect the consumer health and confidence in the food system. The Sudan I incident in 2005 showed how a defective source of an ingredient can spread contamination far and wide through the food chain.

o Failure of food logistics systems. Food logistics are predicated on availability of transport infrastructure, including good links to the rest of Europe. Contingency planning for loss of key infrastructure should take into account food supply requirements. The 'just-in-time', low inventory models of the contemporary food system have potential vulnerabilities. Multi-national supply chain structures, with longer logistic pipelines and disparate assets could be particularly exposed in a crisis event. Planning for scenarios that compromise the functioning of the food logistics system, such as an avian flu epidemic or energy shortages, needs to take into account food supply and distribution requirements.

6. There remains the possibility of 'shocks' to the system being delivered through global markets. Food chain enterprises face continued volatility in commodity markets, both for inputs (e.g. animal feed, energy, fertiliser) and outputs. Severe inflationary effects on commodities and input prices over a sustained period also have the potential to tip supply chains into a crisis situation, particularly if the cost absorption through the chain is disproportionate to retail price rises. The interface between global market trends and regional regulations can introduce additional stresses, as with the import of GM animal feed to Europe. Europe's reliance on inputs from elsewhere, such as animal feed and oil, is just one illustration of the fact that the security of food supply cannot be measured by end-product self-sufficiency.

7. The resilience of the UK food system has to be considered within its European and global context. In many instances, the systemic issues are global in nature. They apply to the UK but also exist in most other parts of the world. The UK cannot fully isolate itself from global events - dysfunction in EU or global markets has an impact on UK consumers and producers. So it is in the UK's interest to ensure that the global food system is operating sustainably. But in turn, the focus for UK food security should not solely be on the global picture, without considering the long term resilience and viability of the UK food system.

8. The long term challenges are fundamental. Many stem from processes deeply embedded in the structure of the modern food system. The environmental and resource challenges include:

the need to radically reduce the greenhouse gas emissions produced by the food system;

reducing the end-to-end dependency of the food chain on fossil fuels (given climate change and expectations of higher energy costs in the decades ahead); and

depletion of the natural resources and ecosystem services on which food production depends (e.g. soil, water).

9. These need to be addressed while meeting the dietary needs and aspirations of a larger and (we hope) wealthier global population. And in ways that help to reduce the inequalities of food security that are seen in the world today.

10. Ultimately it is consumers' choices about how and where they spend money on food that dictates the patterns of wealth creation and environmental impact in the supply chain. Their dietary choices, and their willingness to pay a premium for products of assured provenance, are key system drivers. So consumers need to be part of this debate and engagement by industry (including farming) with them needs to be part of the process of change.

11. In that context, the growth in popular interest in food in the UK - where it comes from, how it is produced, what it does to us - is the single most positive trend in the food system today. Harnessing and developing that interest is going to be critical to the future of UK farming, and to the prospects for the transformation of the wider food system to a more secure and sustainable model.

12. A UK food and farming sector that, by virtue of the productivity it achieves and value it generates, is competitive in local, European and global markets will succeed in servicing both domestic and overseas demand. In some sectors, further restructuring is likely to be required before economic viability is the norm[1]. And there is a long way to go before the system exhibits environmental sustainability.

How well placed is the UK to make the most of its opportunities in responding to the challenge of increasing global food production by 50% by 2030 and doubling it by 2050, while ensuring that such production is sustainable?

13. In many areas of the debate about food supply and food security, it is necessary to move from the generic ('food') down into food groups or particular markets (e.g. cereals, red meat, poultry) to have a coherent discussion because the opportunities, constraints, production patterns and conditions for trade differ widely among them.

14. It is common to focus first on cereal production. Embedded within projections such as those in the question above are choices about how much grain production is diverted to non-food uses (such as biofuels), and dietary trends and choices (such as propensity to consume meat).

15. There is a need to raise the productivity of food production, here in the UK and overseas, but in a more sustainable way than we have managed in the past - producing the foods that consumers want to buy at the price they are prepared to pay, but doing so using inputs more efficiently and reducing waste and pollution.

16. Raising aggregate output on the scale indicated will require changes that include:

an increase in the baseline yield potential of the major traded grains but also of the crops grown in sub-Saharan Africa and elsewhere that are not widely traded;

a reduction in the yield losses due to pests and diseases;

interventions that reduce post-harvest losses; and

adaptation to climate change effects.

17. In contrast to the previous Green Revolution, these yield improvements need to be made at the same time as the climate is shifting, greenhouse emissions are being reduced, and key inputs such as water are becoming more scarce in many areas. More sustainable farming systems and farm technologies are needed.

18. This is at heart an innovation challenge. As a wealthy nation with a strong scientific tradition and a sophisticated arable farming sector, and as a country where there is an appreciation of the challenges ahead, the UK ought to be as well placed as any to engage with them and seize the opportunities therein. The issue is whether we will chose to do so.

What trends are likely to emerge on the demand side of the food system in the UK, in terms of consumer taste and habits, and what will be their main effect? What use could be made of local food networks?

19. The UK food market is highly diverse, but key themes include healthier eating, convenience and a growing interest in provenance. The last ten years have seen a growth in consumer interest in food, how it is produced and where it comes from. This is not universal but it is widespread and is a hugely positive development. The current economic conditions may suppress people's ability to pay for 'better' food. However, this trend seems likely to re-establish itself when recovery comes, though it will be repressed if food prices remain at a higher level than we have become used to over the last two decades (as is possible).

20. If that interest can be sustained and widened, the prospects for the UK food system and UK farming are far brighter than if it withers. It seems likely that the long term future of a large part of the UK farming base (especially that beyond the cereals sector) depends on consumers being willing to pay more than the minimum in order to access UK-produced food - directly or by shopping at supermarkets that 'edit' that choice for them.

21. The future ought to be about a food system built around sustainable, healthy diets. But there is a long way to go on all counts. And the transition has its own embedded challenges, for instance:

significant progress towards the '5 a day' target for fruit and vegetable consumption is a very high priority from a health perspective, yet the UK imports 90% of the fruit consumed here (by value) and a significant share of its vegetables, despite efforts to extend seasonal availability of UK production; and

decline in red meat consumption (for health or environmental reasons) erodes domestic markets for UK livestock producers, many of whom are already unprofitable.

22. Local food networks help harness interest in food. They can help in reconnecting people with how food is produced. They can also help building social capital in communities. But provenance is not the whole story - changes in the types of food people buy matters too.

What role should Defra play both in ensuring that the strengths of the UK food system are maintained and in addressing the weaknesses that have been identified? What leadership and assistance should Defra provide to the food industry?

23. The Government's response to the food price crisis has included significant support for international crop research effort, focused on raising yields in developing countries. It is time for Defra to launch a process to look at whether public investment in research, development and deployment of solutions to the challenges facing the food chain is adequate and appropriately allocated in the UK and in the European Union.

24. Defra should also lead the development of a 'vision' for the reshaping of a food system into a form that is productive, competitive, and resilient but also sustainable. Research for the Chatham House Food Futures report uncovered conflicting and wide ranging views over how the future food supply system should develop. While there is not necessarily one right pathway to meeting future challenges, it is important that there is an overall coherent framework / roadmap that helps to guide and shape behaviours. Defra are in the position to convene this debate. The vision needs to articulate in some detail; the desired outcomes from the system its principles and attributes as well as the debate around the choices that need to be made in reconciling the goals of sustainability with competitiveness and resilience. It also needs to be developed in conjunction with a wide range of food supply stakeholders - the private sector along with non-governmental organisations have to play their part in shaping the new system.

25. Defra could also, with the industry, develop a clearer vision for how the productivity of UK farming is to be enhanced in order to seize the market opportunities and deal with the environmental challenges it faces. This does not imply maintaining the status quo in the industry structure; there are areas where further change is inevitable. In areas like the uplands, there will be choices about how land is to be used and the environmental and economic services we want it to support.

26. Through its work on UK food security it should provide a coherent risk management framework through which the short, medium and long term risks to food security can be monitored and managed.

27. It should, working together with other departments, look for opportunities to strengthen public interest in food and in sustainable, healthy diets, by building on initiatives such as, the Year of Food and Farming.

How well does Defra engage with other relevant departments across Government, and with European and international bodies, on food policy and the regulatory framework for the food supply chain? Is there a coherent cross-Government food strategy?

28. The governance of the food chain is highly complex. Government input ranges from the global (e.g. Codex Alimentarius), through the regional (e.g. the EU), to the national (UK), the devolved (e.g. Scottish Government) and the local (e.g. local authority trading standards). Many of the rules and standards in the system are set within the food chain by private sector agents, rather than by legislators and regulators.

29. The recent Cabinet Office report Food Matters set four strategic policy objectives for UK food policy. These commit the Government to engaging with the environmental, safety, economic and environmental challenges facing the food system, in concert. The report defined the policy architecture - from vision through strategy to decision-making machinery - that would help government make progress towards these objectives.

30. The onus is now on Defra to develop policy within that framework and accelerate the process of change. This will require it to work with other parts of Whitehall, with the devolved administrations and engage with the European Commission. And for government as a whole to engage with industry in a joined-up way.

What criteria should Defra use to monitor how well the UK is doing in responding to the challenge of doubling global food production by 2050 while ensuring that such production is sustainable?

31. Although the UK can make a direct contribution through its own food output, the share of incremental global food demand that can be met from domestic production is very modest. Even today, with its high relative efficiency, the UK's cereals sector accounts for less than 1% of world grain production. It is generally acknowledged that the greatest latent potential and the greatest need for global food production increases is in the developing world. Long term global food security requires that this potential is realised.

32. There is no economic or environmental rationale for government to set targets to raise UK output of particular food products (whether expressed in calories, kilos or dollars) in step with changes in global food demand.

33. The UK's indirect contribution to the global challenge is potentially far more significant. This indirect contribution can be made through applying the UK's capacity:

for scientific and technological innovation; and

to lead and influence relevant EU and international agendas on issues ranging from climate change to trade.

34. The UK's responsibilities are therefore to:

support the development of a productive, competitive UK food sector that is founded on sustainable technologies and business practice. A more successful UK food industry will win market share and make a greater contribution to overall world demand;

use its influence to encourage policy changes in Europe and worldwide that foster conditions which support the competitiveness of economically, environmental and socially sustainable practices - such as responsible governance of water resources, carbon pricing, labour rights and openness to trade; and

invest in the supply of the basic knowledge that will underpin the techniques and technologies of the future food system - both here in the UK and for the developing world.

35. From this flow the following types of indicators:

change in total factor productivity within the UK food chain, looking at key farm and manufacturing sectors;

positive changes in EU/international policy and qualitative assessment of UK influence on those processes; and

citations of scientific papers that have UK based authors in areas of science relevant to the long term challenge, such as crop science.

36. This monitoring framework is not the same as that required to monitor UK food security - it is tracking performance against a different problem.




This document was prepared jointly by Andrew Jarvis, a Senior Research Fellow in the Energy, Environment and Development Programme at Chatham House and Kate Bailey, a Senior Research Associate within the Food Process Innovation Unit at Cardiff Business School. Andrew recently joined Chatham House to direct its work on food policy and food security. Kate led the research team for the food supply project convened by Chatham House which culminated in the recent report Food Futures: Rethinking UK strategy.

January 2009


[1] See, for example, the report of the Northern Ireland Red Meat Task Force.