Photo: PA
According to British retailers, major supply chain hiccups are threatening to ruin the Christmas business season in a rather shocking development for an otherwise highly industrialized country. In fact, this will be the seventh consecutive month that stock adequacy in the UK has hit an all-time low. The supply shortages, caused by a ruinous cocktail of labour shortages, Brexit and surging commodity prices, could mean that many Christmas gift wishes remain unfulfilled this year. However, the shortages could affect a much more serious, existential aspect too: the UK’s post-Brexit food security, both now and in the long-term.
That the current situation is not just a blip was clarified by the National Farmers’ Union, which warned that British farms are in an “even more precarious position” than in the early days of the Covid-19 pandemic when nearly a third of the food industry was forced to close its doors in an instant. It’s easy to see why: tomato and cucumber growers have had to shut down production amid soaring electricity costs, used to heat greenhouses, while potato farmers are facing a major cost increases of cold storage. In the Lea Valley, where 75 percent of Britain’s cucumbers, sweet peppers and aubergines are grown, one in ten growers didn’t plant a third cucumber crop in July due to worker shortages and higher energy prices.
Food security under scrutiny
Such decisions have already made its impact felt for consumers. In a recent survey, more than half of respondents reported being either worried, slightly worried, or very worried about the availability of food and drinks this coming festive season. Empty supermarket shelves, caused by the Brexit-induced shortage of lorry drivers, have even prompted London authorities to launch an investigation into Britain’s supply chain vulnerabilities – a sign that the situation is exceptional and rightfully looked at with concern in Whitehall.
These issues come at a highly inopportune time for Britain: in the wake of Brexit, the UK – notably a net food importer – was already well aware that new food import partners needed to be found and quick. The escalating dispute with France about fishing rights since Brexit is only adding additional urgency to the situation. Thus, when London made a deal with Ukraine, Europe’s traditional “breadbasket”, the government as well as pundits were optimistic that Britain’s food security was ensured. The attitude stemmed from the fact that as an EU member, the UK had to restrict food imports from Ukraine via high tariffs designed to protect French and German farmers.
However, having left the bloc, British lawmakers were free to take advantage of Ukraine’s exports of high-quality poultry, but especially grains such as wheat, corn, barley, as well as other foodstuffs to meet domestic demand at significantly lower prices than those offered by the EU. Ukraine’s advantageous geographical position also meant food could be transported to Britain overland by rail or truck in a short time.
Increased imports of Ukrainian grains under a strategic partnership agreement, signed in 2020, were expected to be a boon for British farmers: reduced grain feed costs for domestic meat and dairy production, which constitute approximately two-thirds of UK agriculture, should theoretically have increased profitability. Indeed, the opportunity to import high quality, low-cost foodstuffs and feed grains epitomised the advantages Brexit was expected to present to UK consumers.
However, this plan is hitting a serious snag, one that is affecting the EU just as much: China’s encroachment on Ukraine. The country is desperate to feed its massive population that is getting wealthier and increasingly developing an appetite for meat, which in turn increases demand for cattle feed. With domestic corn demand outstripping domestic supply, Beijing has been looking for external suppliers to plug the gap, and Ukraine – disappointed by what it saw as the West’s dovish stance in the face of Russian aggression – has been happy to provide much-needed grains.
The Ukraine grain drain
According to USDA data for 2020 to 2021, 70 percent of Ukraine’s total barley exports went to China, while corn exports to China grew by 67 percent in defiance of a 21 percent slump of total grain exports between October 2020 to June 2021. These numbers are the direct result of Kiev’s decision to prioritise China over Europe which has led to a 33 percent decline in grain exports to the EU over the same period. Furthermore, a Chinese state-owned company reportedly leased nine percent of Ukraine’s farmland, amounting to an area the size of Belgium, as far back as 2013 in a deal that monopolised grain for Chinese consumption and that made Ukraine China’s largest overseas farmer.
It’s evident that China’s gain is ultimately Brussels and London’s loss. But while the EU has the land capacity to increase its share of domestically grown cereals, including corn – which it has been doing since 2015 albeit at snail’s pace – the UK doesn’t have that option. This means that Britons are even more strongly affected by global trade decisions and corn price fluctuations than the EU-27 for example, which are still able to at least partially set the corn price for the UK through its own supplies.
All of this is deeply bad news for the UK, already critically vulnerable barely two years out of the EU, which on top of things has been scrambling to appease Kiev after the sensitive bilateral trading pact had to be reopened despite being finalized. Sensing that food security is an issue that will not go away anytime soon, London is now set to ease restrictions on gene-edited food in a last-ditch effort to boost domestic food production.
Between major supply chain concerns, diplomatic fumbling, and the ever-present threat of China’s long game, Britain certainly has a lot on her plate. Whether or not the current playbook will help avert a food security crisis, though, remains to be seen.
