MPs to examine Iran war's growing impact on UK food prices and farming

The growing impact of the Iran war on food prices, fertiliser supplies and UK farming costs will come under scrutiny by MPs next week amid warnings of a potential “cost of farming crisis”.

The Environment, Food and Rural Affairs Committee will examine how escalating geopolitical tensions could affect both farm businesses and household food bills during an evidence session at Westminster on 19 May.

The hearing is part of a wider inquiry into fairness and resilience within Britain’s food supply chains as concerns mount over the vulnerability of global food systems to international conflict and disruption in major trade routes.

Pressure has intensified following disruption to fertiliser shipments through the Strait of Hormuz, with delays and stoppages affecting supplies of ammonia and urea used across global agriculture.

Oil prices also surged earlier this year, increasing energy costs across multiple sectors and adding further strain to food production, transport and manufacturing.

Agricultural input inflation has climbed to 8.4%, intensifying pressure on UK farmers as new analysis from Andersons warns a potential “cost of farming crisis” is beginning to emerge across the sector.

The consultancy said “agflation” is now running well ahead of both consumer and food inflation, while farmgate prices have fallen 5.8% year-on-year, leaving producers squeezed between soaring costs and weakening returns.

Andersons warned the widening gap between rising production costs and falling farmgate prices was creating one of the toughest financial environments UK farmers have faced in years.

Higher fertiliser, fuel and energy costs are also expected to affect planting decisions, machinery use and food production costs across the farming sector.

Agriculture has also been flagged by the Bank of England as a sector facing “elevated financial stress” as rising fuel, fertiliser and energy costs amid escalating tensions in the Middle East continue to squeeze farm businesses.

The Bank’s latest business conditions summary identified agriculture alongside hospitality, retail and construction as sectors facing growing financial strain amid rising costs and falling business confidence across the economy.

The mounting pressures are expected to dominate next week’s parliamentary evidence session.

Witnesses will include food policy expert Professor Tim Lang, Food and Drink Federation chief executive Karen Betts and Food Foundation head of policy and advocacy Hannah Brinsden.

Professor Lang is expected to face questions on the implications the Iran conflict could have for food security and whether the UK food system has wider “structural fragilities” that need to be addressed.

Ms Betts will outline concerns from food manufacturers and the wider supply chain as businesses continue grappling with higher operating costs and mounting inflationary pressure.

The Food and Drink Federation has already revised its food inflation forecast upwards, predicting inflation could reach around 9% by the end of 2026.

MPs are also expected to question whether government environmental policies are adding further financial pressure to domestic food production.

Meanwhile, Ms Brinsden is expected to highlight the impact rising food costs could have on low-income households, particularly around affordability and food availability.

The committee will also reflect on lessons learned from previous supply chain shocks including the Covid-19 pandemic and Russia’s invasion of Ukraine.

The hearing comes amid growing concern that international conflict, volatile energy markets and rising input prices are exposing deep vulnerabilities across Britain’s food and farming system.