The effect of the war in Ukraine on UK farming and food production

The effect of the war in Ukraine on UK farming and food production will be debated on Wednesday 20 July 2022 at 9.30am. The debate will be opened by Christian Matheson MP.

Global supply chains were under significant pressure before the war in Ukraine. The UK’s supply chain issues stemmed from global shortages of materials, staff shortages and transport delays occurring at the same time as sharp spikes in demand, particularly for consumer goods and construction materials. The conflict in Ukraine has added to food supply chain pressures, particularly in relation to rising costs for fertilisers, animal feed and energy.

Conflict in Ukraine

On 24 February 2022, Russia launched military action in Ukraine, with forces crossing into the country from Belarus in the north, Russia in the east and Crimea in the south.

Russia and Ukraine supply key produce to parts of the world where food supply is already under pressure. North Africa and the Middle East import significant amounts of cereal, wheat and barley from Ukraine and Russia, and Ukraine is an important supplier of maize to the EU and China.

The conflict has prevented farmers in some areas of Ukraine from attending to their fields and has disrupted transport networks. Farm machinery and buildings have been damaged and fire is destroying crops. The UN Food and Agriculture Organization (FAO) has projected that the conflict in Ukraine will lead to a rise in global food prices in 2022 of between 8% and 22%. It could lead to an increase of 13 million more chronically undernourished people this year, and 17 million more in 2023.

Impact on the UK: price increases predicted

The UK Government does not expect any significant impact on UK food supply but has acknowledged the likelihood of further food price increases due to trade disruption and fertiliser supply issues. This echoes the European Parliament’s assessment that the main impact in EU countries will be on food prices rather than food availability.

Farmers in the UK have concerns about input costs, particularly fertilisers and animal feed, as well as energy costs.

Energy prices were increasing before the war in Ukraine. As a net importer, the UK is exposed to volatility in gas prices. Energy input costs for farms increased by 34% between January and April 2022. Farm motor fuel costs increased by 30% over the same period.

England’s farming sector

The farming sector in England is also undergoing a transition from Common Agricultural Policy (CAP) payments to a new system of Environmental Land Management (ELM) and other schemes.

Representatives of the agricultural sector have been concerned about the availability of labour for years. Between April 2020 and the end of March  2022, Ukrainians made up 67% of temporary workers issued with a Seasonal Worker visa. The adoption of martial law in Ukraine in response to the Russian invasion has prevented Ukrainian men of fighting age, defined as age 18 to 60, from leaving the country.

UK Government figures show that Ukrainians and Russians made up 43% and 5% respectively of the 6,618 people that came to the UK under the Seasonal Worker scheme between 1 January 2022 and 31 March 2022. More recent government figures for 2022 are not yet available.

Food strategy for England

The Government published a Government food strategy for England on 13 June 2022. In response to Russia’s invasion of Ukraine, the Government outlined actions taken and further steps planned, including:

• Putting in place a package on fertilisers to help farmers manage increased input costs;
• future work with industry on barriers to farmers taking up risk management and other farming insurance products;
• helping businesses to manage vegetable oil substitution and access more diverse supply chains where there are shortages of ingredients;
• future work with industry to develop plans to bolster resilience of critical inputs such as carbon dioxide (CO2) and fertiliser. This will include a specific long-term plan on CO2 in 2022 and a focus on pioneering more organic-based fertilisers; and
• strengthening the resilience of domestic supply chains, alongside continued work with international partners to support worldwide action to mitigate the impacts of food crises on the most vulnerable countries and people.

Farmers’ and food producers’ views

Farmers and food producers are concerned about the pressures of rising input costs on their businesses. The National Farmers’ Union (NFU) said that growers were “doing everything they can” to reduce overheads but “double or even triple digit inflation” for fertiliser and energy meant that, if the pressure continued, it would be” simply unsustainable for some businesses to continue as they are”. The NFU called on the Government to support farmers in the “continued production of food for consumers at affordable prices. […] the Government must act now, with a clear signal that food security is a priority for the nation”.

The Food and Drink Federation said that, with the Ukraine crisis likely to impact negatively on their businesses’ trading ambitions, the Government needed to work closely with industry to “develop new markets and seize new opportunities in a difficult economic environment, to underpin their resilience”.