Questions and answers about coronavirus and the UK economy
Questions and answers about coronavirus and the UK economy

How secure is your dinner?

As the pandemic began, there were serious concerns about food shortages; with Brexit looming, these fears are again prominent. Beyond the UK, food insecurity is already very real, particularly in sub-Saharan Africa, and innovative policies will be needed to tackle it.

Newsletter from 20 November 2020

This week, Bristol hosted its ninth Festival of Economics. In normal times, the annual event is a chance to meet and talk informally with great economists from all over the UK and beyond. This year it was a Zoom-fest, but the line-up was just as strong. Today’s letter focuses on the topic of the first festival panel – farming and food – along with a particularly concerning Observatory piece about the food supply shock in sub-Saharan Africa. What was striking to me is the depth of the uncertainty across the world – and the radical nature of the economic proposals that are being made.

In the early days of the pandemic, we all saw worrying images that are unfamiliar in the UK: panicked shoppers scrabbling for pasta, baked beans and toilet rolls, and supermarket shelves left bare. For a few days, news reports looked like those from an emerging economy in the grip of hyperinflation, rather than a G7 country. This was already concerning and now the country’s exit from the European Union looms. So, just how secure is our food supply?

When it comes to journalists, the experts on this existential question are the team at Farming Today, so it was great to listen in on a fascinating festival session on farming and food supply with Dieter Helm of Oxford University, and the BBC’s Charlotte Smith. A write-up of the session, including a link to the video recording is here.

Two pieces of economics, both radical shifts, jumped out.

First, new taxes. Dieter Helm set out his proposal for new border taxes to eradicate ‘unfair’ trade. The starting point for his argument is that free trade has led to a race to the bottom: this applies to regulation, labour standards and, vitally, carbon. Countries subsidise energy – including the inputs to pesticides – giving certain nations, including the United States, an advantage. Shoppers opt for low-priced options, which means that trade ends up slanted in favour of foods that degrade the environment. As you munch an American apple, you are taking a bite out of nature.

The answer, Dieter argued, is to offset all this at the border. In particular, he would implement a ‘carbon border adjustment’ – a new tax that offsets the advantages that polluting countries provide their farmers (it would also raise the price of Chinese steel). Readers interested in these kinds of ‘sin’ or ‘Pigouvian’ taxes (which aim to tamp down ‘externalities’) can check out this Observatory piece by Flavio Toxvaerd. The striking thing is that if we really forced importers to pay the right carbon price for the food they bring in, there might be close to zero agricultural trade under this model.

But if trade is troublesome, can technology help? The second shift I took from this discussion was in the way food is grown. Dieter and Charlotte discussed the rise of vertical farming – growing plants on shelves that are stacked high in warehouses rather than in fields.

This would be the biggest change since ‘Turnip’ Townshend’s crop rotation, and there are clear economic benefits. One is resources – less land is used, allowing agricultural land to be kept fallow or to replant woodlands. Vertical farming also lowers transport costs – both monetary and environmental – since these vegetable factories, which feature automated lighting, watering and feeding, can be located close to cities.

This part of the discussion was optimistic: we are told that the robots are coming for our jobs, but they may also be underpinning an environmentally friendly food supply for us too.

Outside the UK, the perspective on food security is very different, as a new piece by Lotanna Emediegwu of the University of Manchester sets out. In 2019, around 239 million people in sub-Saharan Africa were undernourished. Much of this is down to shocks: economic, climate and political. This makes the impact of Covid-19 particularly concerning, and there are worrying signs already.

Figure showing price changes in staple food

Lotanna’s article is unsettling. Lockdowns came during planting season and were enforced harshly, limiting farmers’ ability to plant. Schools closed and teenage pregnancies rose, limiting the ability of young women to help on family farms. With imports – from India, for example – now harder to get hold of, countries have banned the exports of some foodstuffs. These factors – lower capacity, a smaller workforce and restricted imports – add up to a dent in supply. The result is soaring prices for essential staples, particularly in Uganda.

It is a striking piece, which I thoroughly recommend: you can read it here. You can also see Lotanna taking part in a ‘Generation Covid’ event hosted by the Institute for Fiscal Studies featuring the Telegraph’s Lizzy Burden and Rahat Siddique from the Confederation of British Industry here.

Next up – and some exciting news!

The Festival of Economics gave the Observatory team the opportunity to collect questions from the public – and we received loads of great ones that we will put to our experts and answer in future pieces. Write-ups of panel sessions, many featuring Observatory experts, will also appear soon.

Finally, some news: we are hiring. We have a spot for a data editor to join the team. A good chart really makes an ECO piece, and we need someone to help us streamline and beautify them. Please pass this on to anyone you think might fit the bill.

Richard Davies
Photo by Kevin McCutcheon on Unsplash
Recent Questions
View all articles
Do you have a question surrounding any of these topics? Or are you an economist and have an answer?
Ask a Question
OR
Submit Evidence