Demand for oat milk oustrips supply

Global sales of liquid milk from cows fell by 3.5 per cent in the five years to 2017 and one factor has been the growing popularity of plant based alternatives. However, these have not been without their challenges.

Almond-based milk has the largest share of the plant-based market in the US with 64 per cent, but some consumers are concerned about the amount of water used in almond cultivation. Soya milk sales have fallen after a debate about its health benefit and risks.

In contrast oat milk sales surged almost 50 per cent in the US in the twelve months to August. That compares with 9 per cent growth in overall plant-based milk. One reason is that it is really good with coffee and consumers like its texture.

Demand has expanded rapidly that leading Swedish producer Oatly has been forced to pause international expansion so that it can supply existing markets in the US and UK. PepsiCo, owner of Quaker Oats, is hoping to cash in by launching oat milk lines to US consumers.

Biotech starts ups are developing dairy free proteins using biological fermentation techniques.

A crucial turning point for agricultural policy

Dieter Helm from Oxford University in a video presentation of policy options for agricultural policy after Brexit: Dieter Helm

He argues that we are at a critical historical turning point for agricultural policy, as important as the post-war settlement embodied in the 1947 Act and joining the then common market in 1973. We need to be clear about what the problem is you are trying to answer in agricultural policy. Why do we have to intervene at all? Post-war policy across Europe was influenced by a 'dig for victory' narrative which is no longer relevant.

He argues that we no longer need policies to deal with volatile prices given the availability of futures markets and financial instruments. I am not convinced that these address all the challenges, particularly for smaller farmers.

What earlier policies failed to address were negative externalities and public goods. Economists have a tight definition of public goods, but public perception equates public goods with the public interest. The Treasury may be tempted to transfer non-agricultural policies to the agricultural budget, e.g., rural broadband access.

There is an asymmetric information problem between farmers and those implementing public policies. Helm suggests the use of auctions and discusses this in the context of river catchment areas.

Pesticides policy after Brexit

The Food Research Collaboration has produced a briefing paper on pesticides policy after Brexit: Pesticides at a crossroads

It is noted, 'With Brexit looming, there is an opportunity for the UK to reshape its relationship with pesticides. It could choose to mirror or even surpass the standards of EU pesticide rules. On the other hand, it could bow to the pro-pesticide lobby and use Brexit as an opportunity to deregulate. This would allow a greater variety and larger quantity of harmful pesticides to be used, thereby putting the environment and the public’s health at risk.'

Among the recommendations are that the UK should maintain the EU’s hazard-based approach (rather than revert to a risk-based approach) to pesticide regulation and introduce a clear, quantitative target for reducing the overall use of pesticides in agriculture. A new government body should be created to support Integrated Pest Management (IPM) techniques. A pesticide tax should be introduced to drive reductions in pesticide use and fund research, development and innovation.

Farmers are, of course, concerned about the removal of active substances they see as essential to plant protection.