UK tomato and cucumber growers halt production due to energy crisis and labor shortages
Soaring energy and labor costs threaten UK food security, industry executives have warned, as pressure increases on ministers to find an urgent solution to a series worsening crises facing UK businesses and households.
The National Farmers’ Union said British farms were in an “even more precarious position” than they were at the start of the pandemic when nearly a third of the food industry was forced to shut down. overnight.
“We now run a very real risk of exporting part of our agricultural industry overseas and reducing the ability of UK agriculture to feed the country,” NFU Vice President Tom Bradshaw said.
The British Meat Processors’ Association said supermarkets facing rising agricultural prices could start sourcing more from overseas, but “UK food security will suffer.”
The warnings came as Kwasi Kwarteng, the business secretary, struck a deal with US fertilizer company CF Industries to set the price of CO2, a gas crucial to UK food production. Industry insiders have criticized the deal to price CO2 as “opaque.”
Mr Kwarteng submitted an offer to the Treasury on Monday calling for emergency support for energy-intensive industries hit hard by soaring gas and electricity prices.
Agriculture is not included in the package, despite the fact that it is subject to strong pressure on costs. The cost of producing a pint of milk has climbed 20% this year as farmers battle soaring energy prices and rising wages due to a shortage of labor.
Some tomato and cucumber growers have already halted production because they cannot afford to heat greenhouses while potato growers struggle to absorb the massive increases in the cost of cold storage, the company said. NFU.
Wholesale gas prices hit record highs last week and remain significantly above pre-pandemic levels, with analysts predicting they will not start to return to normal for several months. Fertilizers, another big expense for farmers, have also skyrocketed due to rising gas and electricity costs.
The energy crisis adds to a host of problems facing UK food suppliers and comes after shoppers experienced weeks of empty supermarket shelves caused in part by a shortage of truck drivers. Retailers have advised households to stock up early to avoid disappointments at Christmas.
Tom Bradshaw of the NFU said supermarkets would soon have to raise prices and pay their suppliers more, or UK farmers would start closing their doors.
“We have to accept that these costs have to move up the supply chain if we want an agricultural industry for the future.
“With climate change and political instability around the world, there has never been a more important time to focus on self-sufficiency, but there is a risk that farmers will not be taken seriously. “
Farmers are currently locked into “very intense” negotiations with major retailers over the need to raise prices, Bradshaw said.
“Supermarkets try to deliver what they think is in the best interests of the consumer in terms of low prices, but there comes a time when you have to realize that these inflationary pressures are so real and so dire that the costs must go up. The supply chain.
“The supermarkets will do whatever they can to try to keep prices under control, but at the end of the day I think we are now at a point where we have the perfect storm. Prices must go up.
Tim Lang, professor emeritus of food policy at City University, said the problems showed how British agriculture had become “disastrously” dependent on high energy consumption.
“The whole farming system depends on nitrogen fertilizers, which are very energy intensive,” he said.
He added: “We have to worry. There is a seizure and it is not being treated. Farmers are right to be angry with the government.
Tomato grower Phil Pearson said conditions were worse than at any time since his grandfather founded the family business in 1948.
“We have already decided that we will not plant 10 percent of our land next year,” he said. “We can’t afford to heat our greenhouses and we don’t know if we will have the manpower.”
His company, APS, has already been forced to throw away products because there were no truck drivers to transport them.
He added: “There will be shortages of tomatoes at Christmas. British consumers will have an inferior product imported from overseas that has less flavor.
Tomatoes produced in the UK can be left to ripen on the vine rather than picked while still orange and then develop their red color in transit, Mr Pearson said.
While indoor vegetable growers have been hit hardest by soaring energy prices, all sectors of the agriculture industry have been hit by rising costs. Pig farmers have warned they will have to slaughter up to 120,000 animals because there are not enough butchers.
Mr Bradshaw said pig farmers faced an “absolutely tragic” situation. “It’s inexcusable. We desperately need government solutions to avoid an absolute crisis. “
Meat processors said they too were in a hurry.
“We cannot continue to absorb these costs with already tight margins,” said Anna Proffit, of the British Meat Processors’ Association. “Up to a point the dam can hold, but at some point it will burst.”
“If supermarkets source more meat from overseas, they could reduce some labor costs, but UK food security will suffer. This would empty the industry and have repercussions on British agriculture. “
The warnings came as ministers struck a deal with CO2 producers to raise the price of gas which is crucial for packaging meat and other fresh produce.
Business secretary Kwasi Kwarteng praised the deal with US company CF Industries, which supplies 60 percent of the UK’s CO2.
The company had shut down production at its plant last month because high gas prices meant it was no longer profitable.
“Today’s deal means that critical industries can have confidence in their CO2 supplies over the coming months without additional support from taxpayers,” Kwarteng said.
However, food industry sources called the deal “opaque”, saying it was made between CF Industries and the government without the input or control of the companies that would be forced to pay the new price plus. raised.
A source said: “They were able to quote their price but we weren’t told anything. We don’t know what the price is yet, we haven’t been told how it was calculated, we don’t know CF Industries’ margins, what model was used or how the price will fluctuate.
“We assume that some sort of equation was used and we would like to know what it is.”
The British Poultry Council welcomed the announcement, adding: “We are awaiting more information from the government on the deal and look forward to working with them after hearing more details.”
A government spokesperson said: “The UK’s high level of food security relies on access to a wide range of sources, including strong supply chains in various countries, in addition to strong domestic production.
“We will continue to help our farmers produce high quality food that meets the highest standards in the world. “