Could 2018 be the year we start paying the true cost of our food?

Ministers are signalling they may be open to calls to make companies pick up the environmental and health costs of their products. By Nick Hughes.

A recent report from the Sustainable Food Trust found that for every £1 UK citizens spend on food, another £1 is incurred in additional costs to society. These can take the form of greenhouse gas emissions, environmental degradation, or the cost of treating diet-related ill health – costs that are not paid by food businesses nor passed on to the end consumer at the till.

Ultimately, the public does foot the bill for these external costs through taxes which fund state services such as healthcare or the flood defences built to compensate for the lack of water-holding capacity of over-farmed land. And experts warn that all of us face paying the real price of today’s food for many years to come if the impact of climate change and loss of biodiversity threatens food security.

To prevent the gap between the price we pay for food and its cost to society widening any further, the Sustainable Food Trust is calling on the government to take Brexit as an opportunity to use financial levers such as taxes and subsidies to make foods that create the greatest external costs more expensive than sustainable alternatives.

It’s a big challenge and one that flies in the face of decades of food policy which has aspired to keep prices as low as possible. Yet of late there have been signs that those in power are beginning to recognise that the state can’t keep on picking up the tab for the damage caused by a food system that doesn’t account for the full costs of production. This April, a new levy will add up to 24p per litre to the cost of almost 3 billion litres of the sugariest soft drinks, thereby ensuring manufacturers that produce these drinks and people who buy them will face an (admittedly small) penalty for exacerbating the cost of treating health problems relating to excess sugar consumption.

We’ve also seen a willingness to rethink the UK’s agricultural subsidy regime, which currently makes payments to farmers based largely on the land they own rather than how they use it. Speaking at the recent Oxford Farming Conference, the environment secretary, Michael Gove, set out his intention to redirect government money towards the provision of public goods such as soil fertility, new wildlife habitats, biodiversity and water quality. Payments have been guaranteed until 2024 but Gove’s announcement suggests a recognition within government that the current incentives do not deliver genuine environmental and public health benefits.

Such policies, however, represent baby steps compared with the huge leaps that advocates of true cost accounting principles believe to be necessary if sustainable foods are to compete on a level playing field with those that cause the greatest costs to society.

For its part, the Sustainable Food Trust would like to see more taxes levied on polluting inputs such as nitrogen fertiliser, as well as changes in farm support which would make it more profitable to produce healthy foods and more expensive to produce commodity crops and grain-fed meat.

But it also says that food businesses will need to become more socially responsible. Current market mechanisms mean that food produced to higher standards incurs additional costs right through the supply chain, meaning a premium has to be charged. Businesses whose customers are not prepared to pay such a premium will inevitably pass on the cost of harmful practices to society in hidden ways, no matter how good their intentions are.

Over the long term, decisive policy action should remove the price premiums currently attached to sustainably produced food, according to the Sustainable Food Trust. But this isn’t going to happen overnight. In the meantime, it urges businesses to make themselves fully aware of the true cost of the food they sell and to support the transition towards a better, more resilient and less costly food system.

Surely that’s something worth paying for?

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