Two thirds of UK food imports originate from nations with lower environmental scores than UK
That’s according to Savills latest rural report Spotlight on Agri-Food Sustainability, as the government considers cutting food export duties to ease the cost of living crisis.
The latest shop price index reveals that food inflation increased to 4.3 per cent in May, up from 3.5 per cent in April, reaching its highest point since April 2012, as inflation rises at its fastest rate in 40 years.
While, according to Deloitte, almost a third of consumers (30 per cent) claim to have stopped purchasing certain products because of concerns about their sustainability, the rising cost of living has the potential to delay this shift in consumer behaviour.
The government has tasked the Department for International Trade with assessing the impact of cutting base-rate duties of goods coming from nations that don’t have trade deals with the UK, as it looks for ways to ease the UK’s cost of living crisis.
However, Savills warns that this would pit consumer opportunities and cheap food directly against long term environmental impact.
By value the UK is already a significant net importer of food (importing £39.5 billion of food between March 2021 and February 2022 and exporting £13.9 billion – Defra, 2021).
However, losing domestic production to third countries as a result of increased costs of production in the UK risks offshoring more food production to countries where traceability and environmental standards may not be guaranteed.
While the World Trade Organisation (WTO) does allow for food safety standards within trade deals based upon quality, they don’t address the way the product is created, including its environmental impact.
HMRC data for the first post-Brexit calendar year shows that the UK import value of four key food commodities (fruit and vegetables, meat, cereals, and dairy and eggs) accounts for £24.5 billion worth of imports, or 62 per cent of all food and drink imported into the UK between March 2021 and February 2022.
Savills Rural Research analysed the provenance of this imported food and scored the relative environmental impact of each exporting country.
The research revealed that over two thirds (69 per cent, or £16.8 billion) of the UK’s food imports originate from nations with worse environmental impact scores than the UK. For fruit and vegetables and cereals, this proportion increased to 77 per cent.
Emily Norton, head of rural research at Savills, commented: “While the UK can improve standards of its own food producers, the scope to impose them on imports through trade deals is much more limited.
“Unilateral tariff cuts on food imports in the name of the cost of living crisis is a short-sighted fix to a long term problem.
“It’s important the government acknowledges that preserving and improving domestic food production is vital in meeting domestic targets for biodiversity and nature, as well as consumers’ needs to access safe and nutritious food.”
The government’s Green Trade report stressed that the UK is well placed to take a leading role in setting a precedent for the way in which trade deals can target environmental impact, however, environmental equivalence won’t stop UK producers being undercut by overseas producers who benefit from climatic differences as well as lower labour costs.
Andrew Wraith, Savills head of food and farming, added: “UK producers are seeing higher environmental standards being implemented through legislation but also through evolving supply chain requirements which are impacting on costs of production.
“Confidence in investment in domestic production is undermined by the prospect of cheaper imported supply produced against different standards,” he concluded.