Food affordability to be further constricted: EFFP

Posted by Daniel Palmer on 5th November 2009

Speaking at the English Farming and Food Partnership’s (EFFP) sixth annual conference, Siôn Roberts EFFP’s Chief Executive warned that, despite signs that the economy will improve next year, the “new normal” for consumers of food is one that will be more constrained than over the last two decades.

“The evolution of food prices is a complicated picture but one that will shape the food chain’s future dynamics. We’ve moved out of a period of over 20 years where food prices fell in real terms. Since 2006 there has been a rapid increase in food price inflation; over the next two years we predict that prices will remain generally subdued. But don’t be fooled,” he warned, “the need to increase global food production by 50% by 2030 means that food prices are likely to rise not fall over the long-term.”

“The recession has moved … consumers from relative prosperity in a period of low food price inflation to a period of enforced frugality,” Roberts noted. “EFFP’s prediction is this new era of cost/value focus is one that will remain for some years to come as the affordability of food continues to be constrained.”

He suggested that farming and food have a crucial contributory role in helping the UK economy move out of recession and because of this, the interest in the food chain has been heightened from both a political and commercial perspective.

“Growth is more likely to come from food manufacturers and agriculture rather than government or consumer spend,” Roberts said.

Mr Roberts noted that improvements in the supply chain were being made, but wondered why it had taken so long for such progress to be made.

“The innovators in the chain are already responding with strategies for the future,” he said. “We have been working with a number of businesses who are making great progress in this area.”

“Price volatility has made food security more of a threat to food companies. It’s great for farmers when cereal prices are high but not for food companies; the opposite is true when cereal prices are low. The innovators have fostered lasting relationships where both ends of the chain work together to iron out the highs and the lows for mutual gain.”

He added that “the … food chain desperately needs these brokers for change and their resulting innovation. EFFP has been working with businesses across all sectors and, in our experience, the unifying principle that the visionaries all share, is the drive to strengthen food chain relationships to deliver long-term value to all partners.”

“In the work that we’ve done with food manufacturers, retailers, processors, food service and farming businesses, the drive for partnership has fallen in to three key areas: provenance, security of supply and supply chain efficiencies.”

“Irrespective of the goals the essence of all the partnerships is the same; it is no longer them and us, farming or food; the businesses are part of the same chain and the closer the ties between farming and food, the better the rewards will be. Farming and food are stronger together,” Mr Roberts concluded.