Brexit could push up fruit and vegetable prices

Some of the claims made in relation to Brexit do seem to be exaggerated, particularly when one considers that we do not know what the final settlement will be (my best guess is that the EU and the UK will reach a deal and it will get through the House of Commons with the support of Labour dissidents).

However, this article suggests that higher fruit and vegetable prices could lead to a large number of early deaths: 5,600 deaths a year

Indeed, the article admits: 'Analysing the potential implications of Brexit is a tricky business. The concrete details of Brexit remain unclear. Proposals range from various forms of “soft Brexit” that include a new trade agreement with the EU, to a “hard Brexit” in which the UK falls back on the (higher) tariffs set out by the World Trade Organization.'

What is needed is for domestic policy to have a greater focus on growing fruit and vegetables, both for health reasons and to respond to the greater number of consumers who are vegetarians and vegans. That is lacking in current proposals.

Stakeholders prioritise outcomes over process

The Government has issued a response to the EFRA Committee report on its consultation document on domestic agricultural policy after Brexit: Response

The Government praises itself for the extent of its engagement with stakeholders on the trajectory of policy and certainly there is a lot of interest and concern from many different quarters on its future direction and content. Stakeholders are interested in outcomes not process and what those will be remains to be seen.

Defra states that, 'It is incorrect to say that there have been minimal discussions between Defra and the Treasury over the future funding of the new agricultural policy. We have been in regular contact with HMT at both ministerial and official level.'

Again it is not the regularity and level of contacts that matters, but the content of those contacts. We are now in a period where the end of austerity has been proclaimed alongside continued fiscal responsibility. The reality is that it is politically difficult for the Government to increases taxes, but it has pledged substantial new funding to the NHS before one even starts to think about, for example, the needs of the police and the prison service.

Spending on agriculture is likely to be squeezed over the coming years. Normally reliable sources suggest that the Treasury is happy with the direction of travel of policy towards payments justified by public goods arguments. However, they are not impressed by food security arguments, although they are interested in the possibilities of a new technological revolution.

What is still largely missing is any link between agricultural policy and health policy in relation to issues such as obesity. Healthy eating is an interest of large sections of the population, not least younger voters.

The Government's view is that 'eating healthily is ultimately a consumer choice'. This is true, but that choice can be guided and that is what Public Health England is trying to do, possibly sometimes in too hectoring a tone.

The Government argues, 'We take the view that the market remains the best way to reward the production of good-quality food. Paying farmers to produce healthy food would not necessarily result in the desired outcome of a wider contribution to public health. Farmers may be the wrong target to incentivise consumers to eat healthy food, especially where primary produce travels through the supply chain via food processors and manufacturers before it is turned into the final product that consumers purchase.'

Whilst there is something in these arguments, policy needs to go beyond a reliance on the market mechanism. For example, there is a climate change argument for eating less meat. We need to ensure that there is a good fruit and vegetable supply at an affordable price. Of course, that raises much wider questions about the roles of the state and the market.

Is there still life in fat taxes?

Bruce Traill, the president of the Agricultural Economics Society, writes in their latest newsletter: 'Denmark is abandoning its short-lived experiment with the world’s first fat tax just as the use of fiscal measures to improve diets and offset the social costs of unhealthy eating appeared to be gathering momentum; the UN Special Rapporteur on the Right to Food, the National Heart Forum and the European Heart Network, have called for the use of various forms of food taxes and subsidies in the past year. Even David Cameron floated the idea in 2011.'

'The Danes taxed products with more than 2.3% saturated fat content at 16 KR (c£1.75) per kg of saturated fat (13% of current retail full-fat butter prices). This was deemed sufficient to have driven hordes of Danes into the welcoming arms of German and Swedish retailers, "exporting" 1300 jobs (according to the Danish Food Workers Union). It’s a pity there wasn’t time to evaluate the impact of the measures on consumption (Copenhagen University’s finding of a 20% fall in purchases of fats and cooking oil in the 3 months from introducing the tax were skewed by hoarding in the run up to the tax and cross-border shopping).'

'Small taxes (and subsidies) on foods or nutrients are never likely to have a big impact on consumption and health, but they do raise a lot of money and are cost effective according to OECD; the Danish tax raised about £150m in a year, the French soda tax a similar amount. Fiscal measures also give incentives to producers to reformulate their products. The EU EATWELL research project recommends ring-fencing revenue generated by a tax for use in other cost-effective healthy eating programmes.' [Although one might add that politicians are never keen on hypothecating revenues because it restricts their freedom of manoeuvre.]

'The US Supplemental Nutrition Assistance Programme and Women, Infants, Children schemes, targeted at subsidising healthy foods for poor consumers, would be good candidates. They have been shown to be highly cost-effective and would be good models for wider adoption in Europe. As they specifically target disadvantaged groups, they partially address a criticism that fiscal food measures are regressive. And if the taxes were applied Europe-wide, the Danes would have to travel a long way to find cheap butter.'