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6 April 2022

The UK is sleepwalking into a food crisis

Fertiliser, fuel, feed: prices of agriculture’s three key ingredients are shooting upwards and farmers are warning of disaster.

By Emma Haslett

Last month Bob Atkinson, a livestock farmer from Padiham in Lancashire, won £30,000 in the People’s Postcode Lottery. As Atkinson, 77, and his wife, Margaret, held up a novelty cheque and grinned for the cameras, someone asked how they would spend the money. “Should I say?” Bob asked, bashfully. “Fertiliser!” laughed Margaret. “We need some fertiliser for spring and that’s gone up to nearly £1,000 a tonne,” Bob said.

The win couldn’t have come at a better time for Atkinson. The price of the fertiliser he uses to grow grass to feed the 60 cows and 150 sheep he rears has rocketed since the invasion of Ukraine by Russia, the world’s largest fertiliser exporter, in late February. On 7 March, two weeks before Atkinson won the lottery, the price of Nola urea, one of the most closely-watched fertiliser commodities, had hit $880 a ton, a 34-year high, and up 60 per cent since the invasion began on 24 February. It’s no surprise Atkinson needed that windfall.  

In fact, the Ukraine crisis has pushed up the price of all three of farming’s three most important Fs — feed, fuel and fertiliser — at the worst possible time for British food producers. They were already wrestling with the fallout from the pandemic and Brexit, which have led to vast labour shortages, and industry-specific crises, namely the avian flu epidemic that is pushing up the cost to produce eggs because free-range chickens are locked inside barns. Food has been left to rot in fields and a huge backlog of livestock, particularly pigs, have had to be slaughtered, according to a report published by the Environment, Food and Rural Affairs Committee this week. Farmers are having to think twice about what they produce.

A food crisis is coming, and the government is sleep-walking into it.

Atkinson has ducked into his barn, out of the snow of early April, to talk to me. In the background pregnant ewes are bleating; lambing season is around the corner. Two weeks after his lottery win, he says he hasn’t bought the fertiliser yet. “I was just hoping that when everybody had got what they need, that the price would come down,” he confides. “When you want ten ton of fertiliser, which doesn’t go very far, and you’re spending £10,000 on it, it’s got to give back.”

Atkinson grew up on his farm, which his father borrowed £100 to buy in 1943. When he was younger it had a dairy with two milk rounds. “My mother took a milk round and my father took a milk round. I went with the milk, and went to school from there.” But as supermarkets began to dominate and prices fell, business waned, and he closed the dairy in 2006 to focus on rearing livestock.

These days, with costs so high, horse liveries — private stables where he looks after people’s horses — are what’s keeping the business afloat. “A sheep with two lambs average £90 a head. One sheep with two little lambs, that’s £270. You’ve to rear that lamb, hope it lives happy, and then finish up getting £110, £115 for it,” he says. “If we didn’t have those liveries, I honestly don’t know how we’d survive. I don’t know how farmers are surviving without something extra than just farming. It’s difficult.”

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Minette Batters, the president of the National Farmers’ Union (NFU), doesn’t know either. She says the fertiliser bill for her 300 acres would have jumped from £8,750 to £30,000 this year if she hadn’t bought in advance. Part of the problem is that the cost of production is growing faster than the price retailers will pay for goods. “Most people haven’t got that money, and can’t justify spending it because you’re never going to get it returned from the market,” she says. That means many farmers will simply cut the amount of food they’re producing. “If you are facing those costs that are already now between 40 and 50 per cent higher, the only way you manage your risk is to downsize your production.”

That is the solution Matt Culley, chairman of the NFU’s crops board, has opted for. This year he will ration his fertiliser, planting more crops such as peas and beans, which need less nitrogen, and fewer cereals such as wheat. “I’ve reduced [fertiliser] application on all my cereal crops by 20 per cent,” he says. “I’m expecting a 15 to 20 per cent reduction on my yield.”

Farmers everywhere are having to make this kind of call, says Batters. “We will see double-digit contraction across all sectors. Dairy farmers will just decide to buy less nitrogen fertiliser; arable farmers will decide, ‘Actually, I won’t grow milling wheat in the winter, I will go to spring planting and grow feed wheat because then I can halve my fertiliser costs’.” The result of this will be even higher food price inflation in 2023. “All food production is really 12 months’ worth of planning ahead,” she says. “Something like this a perfect storm.”

The government appears to be doing little. A recent crisis meeting at the Department for Environment, Food and Rural Affairs led to, among other things, new rules on urea fertiliser being delayed by a year, and clearer rules on slurry storage. But it isn’t enough. Part of the frustration for farmers is that in a time when Britain’s food security appears to be at risk the government seems more concerned with policies such as rewarding producers for rewilding than it is with supporting food production. “If you take the sustainable farming incentive… 70 per cent of that budget is based on land recovery and local nature recovery; only 30 per cent of the budget is based on productive agriculture,” says Culley.

“Legislating on the standards of species, of nature, of trees [is] all laudable, but where is the ambition on food and keeping these guys in business?” asks Batters. “Where is the legislation framework to say we are not going to let our self-sufficiency dip and we are going to maintain it at 60 per cent and we are going to grow it in these areas?”

“I just don’t think government do get it at the moment,” says Culley. “I just don’t think they want to listen.”

“Food is taken for granted,” agrees Batters. “You know, probably the greatest challenge this government faces right now is food supply for 2023, and they just don’t yet realise it.”

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