Brexit is really focusing minds on how real assurances of sustainability are to consumers when trying to justify a premium on foodstuffs.
Some years ago, Britain went out on a limb and made it obligatory for British pig farmers to switch from sow stalls to loose straw-bedded housing.
The new system had a much higher cost and the net result was that as British pig farmers’ costs rose, and their prices were set by the cost of competing imported products, the number of sows in the UK declined by 40% and UK self-sufficiency in pigmeat dropped from 84% to less than 50% – in a country fully self-sufficient in feed grain.
The lessons from this example should not be lost on us. During the Brexit debates in the UK parliament, the government made helpful noises about British standards not being undermined by imports, but they resolutely refused to put such assurances into law. The Brexit deal was barely done when an extra 260,000t of cane sugar, presumably mainly Brazilian, was granted free entry into Britain.
Are British consumers going to insist on British beet sugar from East Anglia? Unlikely. The probable parallels with Irish beef are real. The marketing claims will, of course, be made that we have a sustainable premium beef offering. If this claim is to mean anything, it would be most apparent on the supermarket shelves, which is where the credibility and pricing power of Kerrygold butter is clearly seen. We have not seen a similar development on the beef side. If anything, last week’s figures on the declining value of beef exports, despite an increase in volume, would back up suggestions that we have, in fact, been losing supermarket shelf space in Britain and it is clear that we have been unable to maintain our bull beef markets on the continent, despite Continental Europe being primarily a bull beef market. So what is going on?
Clearly an increasing proportion of our beef is going down the mince route, a classic commodity which by definition will give no quality premium. Second, the main imperative for the meat factories is that margins are maintained. The absolute price only matters to farmers, but there is no mechanism to enforce a set price. The end point has to be that sustainability which adds costs should also add to incomes. So far, we have seen little evidence of increased incomes.