Meanwhile, there has been a seismic shift in the economics of world food. Expanding middle classes in China, Brazil, Indonesia, India and elsewhere have made producers realise they no longer need to deal with British supermarkets and their thuggish approach to doing a deal. Citrus growers in South Africa are refusing to have anything to do with UK plc. Many New Zealand apple growers would rather sell to China, which will pay as much for ungraded, unpacked fruit as the British will pay for graded and packed. It’s the same story across meat, dairy and grains.
OK, fine. Other people getting rich puts up the price we must pay for the things we desire. I’ve not got a problem with that.
The price pressures on the supermarkets, desperate not to lose market share, are huge. Morrisons and Asda have started to get rid of the middle men in their supply chain and go direct to the farm gate to reduce costs, but that will only be a stopgap. They have to start paying British farmers more so they can invest in homegrown agriculture, so, in turn, our self-sufficiency will improve markedly. The supermarkets will have to take smaller profits, a fact of life investors will have to get used to. And yes, consumers will have to accept a further increase in the price of food, perhaps from the current 10% of income to 13% or 14%. Otherwise, we will be left at the mercy of the international producers who have no incentive to trade with us and who can charge what they like.
Food might indeed rise as a percentage of income. But it’s that last sentence that confuses.
Otherwise, we will be left at the mercy of the international producers who have no incentive to trade with us and who can charge what they like.
They can’t charge what they like, can they? They can only charge what someone is willing to pay. Which, presumably, is why you’re recommending that we should be willing to pay a little more ourselves.