So strange, yet true

The British government’s plans really are as mad as they sound. Try this example for size:

Fresh produce importer PML Seafrigo runs a private BCP at Lympne, near Dover. Company director Mike Parr picks up the story:

“PML Seafrigo has its own 24/7 border control post at Lympne, which is the closest point of entry to the Port of Dover (closer than Sevington), we have a dedicated transport and logistics hub for imported goods and yet our customers will still be charged the CUC even though they will not be using the Sevington facility. 

“The government is effectively asking businesses such as ours to collect taxes on their behalf. And the fact that this fee will be reviewed and updated annually by Defra is itself worrying, it could easily be increased in 12 months’ time. 

Parr is outraged by the casual way the government is abusing the trust of the country’s traders.

“The common user charge (CUC) is effectively another business tax that will be applied to each commodity line in a Common Health Entry Document (CHED). Although fees are capped – £145 for every consignment arriving via the Port of Dover or Eurotunnel –this is another expense for importers and retailers to bear, which will of course be reflected in further delays at the ports and another price hike for essential food items.

“What is particularly frustrating is that the fee is being levied for all fresh produce / plants goods passing through Dover or Folkestone – even if they don’t pass through the government controlled inspection post at Sevington.”

The question that most people would want an answer to is “WHY is the British government waging war on the very people that it claims to support? Any ideas, please add as a comment.

Canned goods coming a cropper?

We have been used to seeing cheap canned foods on supermarket shelves all the year round for decades. With southern Europe just one of the many regions suffering record temperatures and drought around the world, it is timely to look at the possible impact on food products that we have relied on for centuries. It is necessary to distinguish canned foods that have an underlying seasonality, in other words, a point in the season at which the given food is plentiful.

Foods such as canned peeled plum tomatoes, canned salmon, or canned green beans, are packed during the peak cropping weeks of the season. Dedicated canning and cooking lines operate 24/7, with a scaled up version of a process that Nicolas Appert would recognise instantly. In the case of wild salmon, the canneries are located next to the rivers and are stocked up with empty cans ahead of the season. When the salmon return to spawn, fishing crews join the serried ranks of predators that are attracted by thousands of fish in breeding condition.

The standard cooking unit on such lines are a large tank of water, similar to a swimming pool, but kept at a rolling boil for the duration of the pack, which can last weeks. As the fish are caught and brought to a salmon cannery, they are prepared and the cans are filled before cooking. The duration of the cooking time is regulated by a crawler belt that covers the floor of the cooker. Small 100 gram cans are shifted through the cooker during the day at relatively rapid speeds, since they need less cooking than larger cans.

In the case of peeled plum tomato canneries, can sizes go up to 3kg. Lorryloads of raw tomatoes are delivered during the day, some of which will be kept for the night shift. When they clock in, they start filling 3kg cans while the crawler belt is slowed down to its slowest setting. By the time the day shift returns, there will be large stacks of packed and cooked 3kg cans. There will also be a steady stream of lorries laden with tomatoes for the day shift as the belt at the bottom of the cooking tank returns to its daytime setting.

This kind of production line depends on high volume intakes during a clearly-delimited number of weeks (salmon canneries generally pack more than one kind of salmon). It is vulnerable to seasonal variations and crop failures. A bit like us, really. There is an important distinction to make for peeled plum tomatoes, which is that these are mainly grown and packed in Italy. Unlike chopped tomatoes or tomato paste or passata, the cannery can only pack intact tomatoes. These are an industrial variety that are not useful for any other product.

What “by numbers” is about

Across this website, readers will have seen posts such as butter by numbers or cheese by numbers. The purpose is not spelt out in these posts, so here is the thinking behind the “by numbers” coverage.

First, most of the figures cited go back to the end of the 20th century and are volume measurements. The choice of tonnages over the more usual measurement of currency is intended to give an idea of the additional capacity that imports generate for their economies.

In its simplest terms, importing food occupies production capacity the exporting country cannot use for the local economy. For countries like New Zealand, rural populations are so sparse and urban populations are so far apart that this is  not a problem.

Market gardeners close to urban centres in countries such as Kenya, on the other hand, can find themselves left with crops of green beans for which they have no local outlet. Having promised to grow premium vegetables for affluent industrial economies, there is no wriggle room for producers if  retail customers change their minds.

By looking at tonnages, it becomes possible to calculate the agricultural resources that are occupied by export production.

The use of data going back to the late 1990s is a reflection of the fact that multiple retailers invested heavily in electronic point of sale and data management for food sales during the early 1990s. The later years of the 1990s mark the moment that the results started to become visible.

A broken system

The Environment, Farming and Rural Affairs select committee (EFRA) has recently published its findings on staff shortages in the UK food industry. It frames the problem as half a million unfilled jobs in a sector with just over four million workers.

The pig industry and field crops are judged to have been hardest hit: government measures to counter a crisis situation were branded as “too little, too late” by those in the sectors concerned and there is little reason to suppose that the government has learnt a great deal from a crisis that is taking agricultural businesses off the map.

The covid pandemic is trotted out as a major contributing cause of the crisis, but as early as 2017, EFRA was hearing evidence from UK veterinary experts that Brexit would cause consequential and structural damage to UK agriculture. This damage is being done, but Brexit is not being blamed for it.

For all the positive noises coming out of EFRA over the government’s welcome measures to make it easier for UK businesses to recruit specialist food industry workers, the stage is set for a chorus to emerge from the wings and narrate the closing scenes of this very public Greek tragedy as it unfolds.

The UK food industry generates GBP 127 billion a year – more than 6% of the Gross Value Added to the national economy. It should be added at this stage that this figure for the sector includes multiple food retailers and their staff.

The National Farmers’ Union reported that a 33% gap in the work force meant that 24% of the UK daffodil harvest went unpicked, while one in ten growers in the Lea Valley Growers’ Association did not sow a third cucumber crop in July 2021, for the lack of people to pick the crop.

Fresh produce producer Riviera Produce Ltd left produce valued at half a million pounds to rot in the fields, while Boxford Suffolk Farms ltd reported that it lost 44 tonnes of fruit due to labour shortages.

The British Meat Processors’ Association warned that its members faced a shortage of more than 15% in staff numbers, while the National Pig Association reported a “…desperate lack of skilled butchers…”, while pig farms were facing serious gaps in their work force. The British Poultry Council went into the summer of 2021 facing a gap of 6,000 staff among its members, in a sector that employs the equivalent of 22,000 in full timers.

There is no reason to suppose that any of these important industry figures is making up or overstating the problems they face. But they all need rather more than a figurative pat on the back and meaningless platitudes.

The report HC713 Labour shortages in the food and farming sector can be consulted online or downloaded at https://committees.parliament.uk/publications/9580/documents/162177/default/

Asparagus and strawberries

Money is a totally meaningless measure of value for many things. Take food production for instance.

From an accountant’s point of view, there is no monetary distinction to be made between a farm growing a thousand pound’s worth of wheat during a crop year and a market gardener’s business growing a thousand pound’s worth of asparagus and strawberries over the same period of time. It is only when you come to live on these harvests that the difference becomes apparent.

Luxury crops such as asparagus and strawberries, or Yorkshire rhubarb, became potentially more profitable when the Victorian railway network suddenly cut the cost of market access, moving delicate products quickly and efficiently. Market gardeners were by definition close to urban centres, but the railways extended the range over which they could sell.

The reason asparagus-and-strawberries is such a common combination is that both crops need a lot of skilled labour to harvest. Having assembled a gang of labourers to pick asparagus, it makes sense to have another crop to follow through and move the workforce from one to the next as the season progressed.

In the case of Yorkshire rhubarb, production is concentrated into an area surrounded by railway lines. Like the asparagus-and-strawberries growers, market access was the key to their profitability.

However, especially given the short seasons for these luxury crops, no-one is going to live on a diet of asparagus and strawberries. We use a different set of values to establish what a sustainable food system might look like and what it would need to produce.

Amber light for greens

UK fresh produce wholesalers were among the first adopters of end-to-end database-driven stock management. In the early 90s, when multiple retailers were rolling out electronic Point Of Sale systems, overnight there was enough reliable data to drive ordering and procurement systems.

To maintain year-round availability of core inventory, wholesalers needed to be very granular in what constitutes an SKU. By the standards of the day, the databases they developed were ahead of their time. By around 1994, one wholesaler was tracking product grades by (16-bit) colour, calibration range, farmgate and dockside Brix, crop/season dates, with regional adjustments for weather bringing seasons forward or holding them back.

The SKUs were effectively large matrices, with a very long tail of incremental detail that went far beyond grower details and crop varieties. The database effectively became the business and was stored in triplicate on hard drives that were lodged in rotation with the bank: one active, two off-site, rotated daily.

With a global reach, shiploads of third country fresh produce were being sold while the goods were still on the water. Title remained with the consignee until after the ship had docked and unloaded.

For third country fresh produce, the transition from the Common European Tariff to the UK Global Tariff is a detail for which the variables are knowable in advance. For third country produce, the UK already has the PEACH system (Procedure for Electronic Application for Certificates) which is run by DEFRA. Visit https://www.gov.uk/guidance/automatic-licence-verification-between-defra-rpa-and-hmrc where you can download a spreadsheet that maps CN numbers on to plant varieties and gives handling details for importers. The back end of PEACH is currently plumbed into TARIC-3, so a UK-based replacement  is doubtless in hand.

Import duty on imported fresh produce can be agreed on the  basis of a Method 4 valuation, agreed by HMRC (https://www.gov.uk/government/publications/fresh-fruit-and-vegetables-under-method-4-valuation). EU-grown fresh produce should be transferable to this method when the time comes, as the need arises.