Urban Food Chains

the links between diet and power

retail
Retail watchdog
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The Groceries Code Adjudicator is tasked with ensuring fair play between market forces and retailers trying to manipulate things. There were many dubious practices in play at the end of the twentieth century and with retailers holding the whip hand over suppliers, an external agency was long overdue. The position of Groceries Code Adjudicator was first discussed in 2009 and it was long in the making. Its terms of reference are here. The Groceries Code Adjudicator Act of 2013 set up the retail watchdog, which operates out of one of London’s dockland office blocks.

Answerable to what was then the Department for Business, Energy and Industrial Strategy, the adjudicator had a handful of seconded secretarial staff. Just over a dozen retailers with annual sales of more than one billion pounds and now including Amazon, have compliance officers. These are members of the retailers’ management staff, charged with enforcing the provisions of the Act.

There is one major shortcoming with the framing of the act, though. While there are many links in a supply chain, only the retailer and the supplier who is paid by the retailer are covered by the legislation. As yet, there is no attempt to legislate for the more complex structures and working relationships that exist in the food industry.

retail
Blunt instrument
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Tesco has tried to revive shelf money for its online retail operation. At the end of the 2022-3 financial year the multiple announced its plan to impose two flat rate “fulfillment fees” : 12p/unit for branded goods, 5p/unit for own label lines. Short for Stock Keeping Unit (SKU), a unit is an item offered for sale. This incredibly blunt instrument was to be applied and charged to suppliers with threats of punitive retribution in the event of non-co-operation.

In practice it is not even remotely level-handed: suppliers of a £12 bottle of wine would face a one percent margin haircut, while companies supplying goods with a £1 price point face a 12 percent total margin wipeout. Not surprisingly, no-one is playing ball. The Grocery Code Adjudicator faces a major challenge, even though Tesco is out of order in this case. Watch this space.

NFU president Minette Batters told Urban Food Chains: “This move from Tesco is a stark demonstration of the lack of fairness within the supply chain. At a time when crippling production costs mean many farmers and growers can’t afford to continue producing food at scale, resulting in supermarket shortages of fruit, salads and eggs, the food industry desperately needs fairness and collaboration, not further erosion of trust.

customs clearance key concept
Line for line
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The product descriptions that appear alongside customs codes in a schedule are set in stone. The whole point of the Harmonised System (HS) is that at any given time, specifications are the same from one trading bloc to the next. When classifying carcases, for example, there is no adjustment to be made for organic product over intensively-raised. The existence of additional input costs is of no concern when filling in customs declarations. Every market has its own mechanisms for assigning values and prices, which are separate from fiscal liability.

Asia cultivation haulage plantation ship
Squeezing money from geography
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Travel often brings with it a taste for foods that consumers encounter while they are away from home. This broader view of food and drink gained momentum in the latter half of the 20th century, as shoppers started asking for avocado pears, a wider range of pizza and pasta products, not to mention a tidal wave of Asian foods that have been greeted with open arms and either adopted or adapted to British tastes. Many Indian foods have found their way to Britain over the centuries and some, like tea, became national institutions.

It is time to look at the historical context of moving food around the world and look at the topics of food security and self sufficiency. During the latter years of the twentieth century, Britain was about 50% self sufficient: the official headline figure was closer to 65%, but since UK food manufacturers import a variable proportion of their ingredients, these shipments should be taken into account. The impact of two world wars on the domestic economy of Britain leaves a residual malaise and feeling that the UK “…ought to do better…” at producing its own food, notably among older generations.

There is an array of variables that define the economic environment in which food is produced, some of which can be covered now. The first is the colonial plantation paradigm in which overseas territories are ruled and exploited solely to produce commodity crops for colonial powers. Britain, Holland, Spain and Portugal come to mind as historic colonisers, shipping plant material and slave labour in to strategic locations, usually between the tropics. Feeding the work force was a low priority, but was usually a part of the operational model.

Down the intervening centuries this practice continued, developing into what is now referred to as landgrabbing. The topic is extensively documented by Fred Pearce, author of The Land Grabber. The 2012 book can be bought as a paperback or a download here. As the name suggests, land is bought or leased and fenced off. This has been practiced by countries such as China and a number of Arab states. The enclosed land is brought into cultivation usually by nationals from the states concerned and the crops are shipped to these countries as they are harvested. Local populations are excluded from these holdings, which are often of the highest quality available locally.

While this is a modern, pernicious practice, it is not without historical precedent. Irish Quaker and philanthropist Joseph Fisher was a poor law commissioner during the Irish potato famines of the 1840s. From his family home, overlooking the approach to Cork harbour, Fisher recalled seeing ships setting sail bound for English ports. These vessels were laden with grain grown and harvested by starving labourers in the surrounding counties. Fisher went on to write the 1865 book Where Shall We Get Meat? As it happened, shiploads of cheap grain started crossing the Atlantic, as the American railroad system reached the eastern seaboard and started a sea change in European livestock sectors. The entire history of North America to that point is itself dominated by a high profile land grab in which indigenous American peoples were marginalised by settlers and farmers.

The buying power of remote markets can have an immediate impact on the food security of rural populations. This is a measure not of aggregate harvests, but their availability for local communities.

key concept
Third country
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Despite the inference that there could be multiple options, being a third country is a binary opposite of a member state in European parlance. The possible source of ambiguity in this distinction is that there are two implied alternatives to being a third country. Between themselves, EU member states use the term third country to refer to countries which are not EU members, in much the same way a verb might be conjugated. To complete the analogy, the first person is the member state speaking, the second person refers to the other member states on an equal footing, while the third person is identified as a separate, external non-member.

Unlike other areas of European policymaking, in which a wide spectrum of buying-in is accepted without argument, the distinction between being a member state and a third country is fundamentally indivisible. The UK negotiators failed to gain any traction in their attempts to carve out a halfway quasi-membership status that might have opened the way to feathering a cuckoo’s nest of a la carte patronage for British interests. The choice of Michel Barnier to lead Brexit talks for the European Union reflected his commitment to the indivisible membership of a European community that was used to accommodating consensus policymaking in specific areas and contexts.

Brexit's legacy customs clearance haulage lorry raw
Westminster faces customs stalemate
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The Scottish parliament is accusing Westminster of intransigence over the halted building work at the Scottish car ferryport of Cairnryan. Work to build a Border Controls Post (BCP) started after getting a government green light last year. Since then, construction has ground to a halt, as Westminster has refused to give a binding commitment to fund the BCP in full.

Sailings from Stranraer were transferred to the nearby Dumfries and Galloway port of Craigryan back in 2012, for operational reasons. Wholly-owned by Larne Harbour Ltd, Craigryan is a part of the P&O landside portfolio. It can operate up to 16 sailings a day, serving destinations in Northern Ireland.

While Brexit negotiations were in progress, Westminster was committed to funding border infrastructure in full. The Scottish parliament is concerned that it may end up footing part of the bill for port infrastructure on a privately-owned facility. There are also political sensitivities about a requirement for customs facilities on what is currently an internal border.

The implementation of Sanitary and PhytoSanitary (SPS) checks that are the reason for building a BCP in the first place has not happened. Successive start dates in 2021 and 2022 were announced and cancelled: Westminster is currently planning to start SPS checks on livestock and animal products in July, although the BCP site at Cairnryan might not be operational by then.

From a commercial point of view, ferry traffic patterns have changed since Brexit, making the business case and the requirement for a BCP a moot point. The introduction of inbound SPS checks for the UK cannot be evaded forever.

dairy livestock
Between a rock and a hard place
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Hampshire tenant farmer Oliver Neagle was forced to cull 18 of his cows after water supplies to his farm were cut. The dairy farmer pays for water as part of his rent, however he endured breaks in his supply in December and February. Southern Water laid on bottled water for consumers, but had no solution to offer Neagle’s livestock. The number of lactating cows on his farm has gone down from 110 head to 82. With fewer milking cows, the business is compromised and faces harder times. You can read the BBC’s account of what happened here.

This story is an example of the sort of public interest reporting carried out by local BBC journalists that would not have had any traction for commercial broadcasters. Neagle’s story must not be allowed to go down the back of the sofa, no more than the importance of fearless public sector journalism should be undervalued or misunderstood. 

City life cultivation food production
City life 2.1
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Is the writing on the wall for hydroponics? Vertical Farming Daily reports on trials for aeroponics in an adapted hydroponics line. The new technology has to fit in with existing installations to stand a cat in hell’s chance of being considered, but rises to the challenge of producing crops faster using less water. The plug and play modification showed increased yields of just over 20% in trials organised by aeroponics developer Lettus Grow, using the firm’s Aeroponics Rolling Beds (ARB).

These replacement growing trays keep seedlings suspended in the air, receiving nutrients in a carefully controlled fine mist at fixed intervals. To eliminate any risk of blocked nozzles, the Lettus system uses ultrasonic technology to shake droplets of growing solution into the roots of the crop, generating a fine mist.

The application of the nutrient mist can be very closely controlled, keeping the growing medium dry and making the crop easier to manage. The technology is being trialled in widely varying situations. Farming family business GH Dean & Co Ltd in Kent is partnering with grower Ro-Gro in a bid to speed up the development of a new revenue stream, redefining the rate at which a return can be earned on a new agricultural activity.

HM Prison Hewell is using aeroponics to train inmates in the new techniques. As well as growing fresh food for inmates there is enough to sell outside the establishment, too. Local action group Cultivate is creating a local food network to feed communities around Newtown, Powys, while Grow It York is looking to develop food strategy with aeroponics.

Vertical farming has much to commend it. By focussing on one stage of plant development it is easy to miss one important detail, though. Since it does not complete the plants’ life cycle, it does not generate seed stock for further crops. This remains as an input in the sector’s otherwise admirable environmental credentials.

datacrumb
Poultry producers face challenging market
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Since February 2021, liveweight prices for finished chickens have risen by 11% in the UK, while chicken feed costs have risen by up to 30%. Over the same period, UK exports of poultrymeat to the EU have fallen by 25% to 208,000 tonnes, while EU shipments of poultrymeat rose by 2.3% year on year to 275,000 tonnes in calendar year 2022. UK consumers buy white chicken meat and not the dark meat on the carcase, which UK poultry producers used to export to balance demand for their output. Without an export market for the dark poultrymeat and facing competition from increased volumes of imported product, the UK poultry sector is between a rock and a hard place.

Brexit's legacy customs clearance Europe
Unfinished business
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Years after leaving the European Union, the United Kingdom is finally preparing to standardise sanitary and phytosanitary border controls for imports of animal products and plant material at the UK border. This long-running shortfall in customs procedures has been a recurring bone of contention.

Those of us with long memories will recall Boris Johnson assuring EU leaders that he had a workable solution for the Irish border. This ground-breaking declaration rapidly degenerated into despair and disillusion as it became increasingly clear that Boris had no intention of delivering any such thing.

Just in case this sounds overstated, listen to Boris Johnson’s biographer Anthony Seldon talking to Sky News about Johnson’s real Brexit agenda. https://www.facebook.com/watch/?v=1009898093714184

This failure has been the elephant in the room haunting European relations ever since. When the UK first announced its intention of becoming a third country, France moved swiftly and decisively to implement a range of Border Inspection Post (BIP) facilities at Calais to complement those available at Dunquerque and Boulogne sur Mer. The substantial investment and recruitment drive was a prerequisite for handling third country imports of animal products and plant material from the world’s newest third country, the UK. The French government was in a position to act in a timely manner, since the state owns all the country’s port facilities, the daily management of which is delegated to local chambers of commerce.

The English situation, on the other hand, is an arbitrary mix of publicly and privately owned ports, in which the larger ones are public assets while many smaller ports are privately-owned and/or run by trusts. These routinely require government legislation to authorise investment capital, often secured against the assets and fabric of the ports concerned. This less-than-satisfactory muddle means that the government could not require some ports to release land for goods inspection facilities without first checking the local management structure(s). The UK government intends to expand its existing provision of inspection facilities along the lines of EU system, seemingly more cheaply than what the EU would charge for inspecting goods travelling in the opposite direction.

The EU has round 400 Border Inspection Posts (BIPs), later renamed Border Control Posts (BCPs). These are equipped and authorised to inspect consignments of specific livestock species and/or products derived from them. Importers need to book an appointment and plan their journey accordingly. Likewise, shipments of fish and plant material will be directed to BCPs that are equipped to inspect them. EU checks on paperwork are capped at around 45 Euros per consignment. Randomised physical inspections cost around 450 Euros for a container and are charged to the owner of the goods concerned. Regardless of any duty payable on the goods, VAT is payable on the inspection fee, as a component of import VAT. The UK government is quite clear in presenting its plans for border checks that it will retain the principle of charging for inspecting paperwork, but charge a single one-size-fits-all fee for all traffic, regardless of whether or not goods are physically checked. (link)

“It is the UK Government’s intention that there will be charging at Inland Sites to recover operating costs which are necessary to undertake physical inspections at BCPs. The UK Government will consult on its proposed methodology and rates in the coming weeks to inform charging levels. The proposal is to administer a Common User Charge on each consignment which enters through Port of Dover and Eurotunnel that is eligible for SPS checks. The charge would apply to all eligible consignments, whether or not they are selected for a BCP inspection. The indicative Common User Charge rate is estimated to be in the region of £20-£43, however final rates will be determined following consultation.”

The document does not specify a price range for physical inspections and it is not clear whether there are enough qualified vets to cover such a requirement. This light touch, combined with the government’s enthusiasm for trusted trader schemes suggests that physical inspections will be the exception rather than the rule.

The extra cost of shipping animal products into Europe as a third country has hit UK exporters, who were not warned in advance. There’s a footnote about import VAT here, by the way.