{"id":601123,"date":"2026-05-24T08:29:08","date_gmt":"2026-05-24T08:29:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/601123\/"},"modified":"2026-05-24T08:29:08","modified_gmt":"2026-05-24T08:29:08","slug":"squeals-of-horror-over-price-caps-but-how-are-we-going-to-fix-our-broken-food-system-food-drink-industry","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/601123\/","title":{"rendered":"Squeals of horror over price caps \u2013 but how are we going to fix our broken food system? | Food & drink industry"},"content":{"rendered":"

The news that the Treasury was asking UK supermarkets to cap price rises on essential foods was greeted with predictable squeals of horror this week. Supermarkets<\/a> were reportedly \u201cfurious\u201d, while luminaries from the former head of the Institute for Fiscal Studies to the former chair of M&S could be found harrumphing about the evils of price controls.<\/p>\n

But this caterwauling is a distraction from two unpleasant facts. Firstly, the food price surge over the summer and beyond is likely to be significant \u2013 and will come on top of a near-40% rise in the price of food since 2020<\/a> \u2013 due to a devastating combination of the Iran war and a forecast record-breaking El Ni\u00f1o, which will hammer global food production. And secondly, Britain\u2019s food system is painfully exposed to such shocks. The long-held assumption that a global food system can be relied on to meet the nation\u2019s needs, at a reasonable price, no longer applies.<\/p>\n

With about one-third of the<\/a> fertiliser trade travelling through the strait of Hormuz, and about half of the world population\u2019s food supply dependent on artificial fertiliser<\/a>, the shock to global food systems will play out over the next year \u2013 regardless of how quickly the strait may or may not reopen.<\/p>\n

The strait of Hormuz isn\u2019t the only chokepoint in the global food system. In a prescient study from 2017, the foreign policy thinktank Chatham House said the world food system had become painfully exposed to 14 \u201ccritical junctures<\/a>\u201d, from the strait of Hormuz to the strait of Malacca, between the Malay peninsula and Sumatra, to the Black Sea ports that connect Ukrainian and Russian farmers to the world. The Panama canal is another; a multi-year drought across Central America has restricted transits through the freshwater-fed canal, which carries 16% of the world\u2019s grain trade, forcing up global prices<\/a>.<\/p>\n

A cargo ship sails under Las Americas bridge through the Panama Canal. Photograph: Matias Delacroix\/AP<\/p>\n

The theory that informs the UK\u2019s approach is that this shouldn\u2019t matter. Disruptions to harvests and transport in one part of the world will be compensated for with access to produce from another. As long as global markets remain open all will be well. For the last few decades, this has been broadly true globally, as malnutrition fell. The range and quality of food available in the UK has strikingly improved.<\/p>\n

But world hunger has been rising since 2014, with Covid-19 markedly accelerating the trend<\/a>. And a belief that open markets can always compensate for disruption flies in the face of the growing dependency of the whole system on a few \u201cbreadbasket\u201d locations, with 60% of global food production occurring in just five countries<\/a>. It also ignores the possibility of simultaneous shocks \u2013 precisely what the climate crisis, as it leaves weather systems more unstable, starts to make more likely<\/a>.<\/p>\n

This is now the danger. Potentially compounding the closure of the strait of Hormuz is the return of El Ni\u00f1o to the southern Pacific. Recurring every three to five years, El Ni\u00f1o is a vast movement of warm ocean water northwards that changes weather patterns across the globe. These effects vary, but will typically include much hotter, drier weather across east Asia and southern Africa, but much wetter, colder weather in South and Central America, spreading into the southern US. Worse droughts on one side of the world, and worse storms on another, naturally affect food production. Historically, stronger El Ni\u00f1o events are associated with about a 9% increase in global food prices<\/a>, with significant variation: a major El Ni\u00f1o event in 2015-16 pushed 50 million people into food insecurity across southern and central Africa<\/a>.<\/p>\n

A dried up fishery in the Philippines during the 2015 El Ni\u00f1o event. Photograph: Romeo Ranoco\/Reuters<\/p>\n

Forecasters in Europe and North America are increasingly sounding the alarm about a significant, record-breaking El Ni\u00f1o event over this year and into next. Meteorologists have talked of a \u201cGodzilla<\/a>\u201d event, tearing up weather patterns \u2013 and harvests \u2013 from the Pacific coast to east Asia. If it occurs, the full effects of this, like the fertiliser shock, will be felt over the longer term \u2013 coming into autumn and next year\u2019s harvests.<\/p>\n

Britain\u2019s domestic food system is not immune. Britain imports about 60% of its fertiliser<\/a>, and 50% of its fossil gas. As a result, rising global fertiliser prices and energy costs are already provoking a \u201ccost of farming crisis<\/a>\u201d, while the climate crisis is beginning to make its presence felt. Britain has had three of its five worst harvests on record in the last decade.<\/a> Losses for farmers are beginning to mount. Last year saw the harvest value of wheat, barley, oats and oilseed rape fall by more than one-fifth below its long-run average, costing farmers \u00a3828m in lost revenues<\/a>. Over the whole decade, lost revenues from those weaker harvests now come to \u00a32.3bn<\/a>.<\/p>\n

Extreme weather is now affecting the great majority of British farms, with 86% of farmers reporting that they have been hit by extreme rainfall, and 78% by drought, in the last five years<\/a>. Climate change is the quickening drumbeat behind the crisis in British farming.<\/p>\n

Facing these risks, a market-led system is unlikely to function as expected. Supplies run short, forcing up prices, or provoking shortages. Profiteering emerges, as large companies in positions of market power in the supply system generate record earnings. The economists Isabella Weber and Evan Wasner have described how the combination of external shocks and market power can produce widespread inflation<\/a>, meaning a sharp turn in the cost-of-living crisis. As prices of essentials rise, households cut spending elsewhere in the economy, squeezing demand, squashing growth and pushing economies into stagnation.<\/p>\n

A coffee picker carries sacks of coffee cherries at a plantation in El Crucero in Nicaragua. Photograph: Oswaldo Rivas\/REUTERS<\/p>\n

Our entire food system needs an overhaul. In private, the government recognises this. The grudgingly released summary of a still-secret Defra document<\/a> on the national security risks from \u201cecosystem collapse\u201d reported that \u201cwithout significant increases in UK food system and supply chain resilience, it is unlikely the UK would be able to maintain food security if ecosystem collapse drives geopolitical competition for food \u2026 Countries best placed to adapt are those that invest in ecosystem protection and restoration, and resilient and efficient food systems.\u201d<\/p>\n

Global price shocks alone won\u2019t force the change, as an Oxford University study of previous shocks found. Government action is needed. Tariff reductions on nuts, and pleading with the supermarkets are unlikely to deliver results. Like other countries<\/a>, the UK needs to rebuild its strategic food reserves, abandoned in the mid-1990s. It needs tighter government control and regulation of essential foods, including well designed price regulations like those being introduced<\/a> across the world<\/a>. And it needs a focus on longer-term investments in its own farming, supporting farmers in a more volatile environment with proposals like a basic income for farmers<\/a>, and incentives to build in more resilient, sustainable food production. The grave danger is that we remain bitterly exposed to events over which we have no control in an increasingly unforgiving world.<\/p>\n","protected":false},"excerpt":{"rendered":"The news that the Treasury was asking UK supermarkets to cap price rises on essential foods was greeted…\n","protected":false},"author":2,"featured_media":601124,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-601123","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/601123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=601123"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/601123\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/601124"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=601123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=601123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=601123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}