Putting food price rises in perspective

NFU Cymru has hit back over recent stories about food price rises and put into perspective the reasons behind any increases.

Writing in the latest edition of NFU Cymru's magazine Farming Wales, NFU chief economist Carmen Suarez said setting the record straight and correcting some of the most common misconceptions was vital for a farming community suffering from years of cheap food culture.

"Farmers know all too well that, despite being part of the same supply chain, increases in retail prices and in wholesale prices do not necessarily result in a jump in the prices paid to farmers. In the last 20 years, food retail prices have increased by over 50 per cent, while farmgate prices have stagnated. Similarly, the impact of increases in commodity or wholesale prices on farmgate prices is far from immediate or proportional."

Ms Suarez said food was now cheaper and more affordable than ever while farmgate prices had continued to decline in real terms and pointed out that:

• In the last 20 years food has become 20 per cent cheaper in real terms.

• Sixty years ago the average British family spent more than one-third of its income on food. This has now dropped to less than one-tenth.

• Farmgate prices have continued to decline in real terms – if they had grown during the past 100 years at the same rate as the general cost of living they would be, on average, four times higher than their current levels. For example, the price of wheat per tonne would now be over £600 as opposed to the current price in the region of £150.

She added, "Recent increases in commodity prices are a reflection of global demand and supply conditions and represent an opportunity for British farmers to benefit from a long-awaited and overdue recovery in farmgate prices.

"Commodity price increases do not represent the threat to consumers, to the economy or to developing countries that some have been all too keen to depict. And, to the extent that they translate to higher farmgate prices, they will be good news not only for British farmers but also for the rural economy, as it could mean more resources becoming available for countryside management, more investment in farm infrastructure, and fewer farming families being forced to leave the land."