Written evidence submitted by the Norfolk and Suffolk Agri-Food industry (FS0024)



Briefing PaperSeptember 2022



Norfolk & Suffolk Agri-Food Industry Council Response to EFRA Committee Inquiry into Food Security





In 2019 New Anglia LEP convened three Industry Councils to drive forward the aspirations of the draft Local Industrial Strategy in the three strategic areas of energy, agri-food and digital.

The Agri-Food Industry Council (AFIC) was established as a strategic public/private sector partnership group to provide a focus for decision making and leadership for the agri-food sector. The AFIC acts as the LEP’s sector group and provides the strategic direction in delivering the aspiration to be recognised as a leading agri-food region.


Members of the AFIC are drawn from across the agri-food sector in Norfolk and Suffolk and include representatives of food and drink businesses, farmers, farmer & landowner organisations including the NFU and CLA, research institutions, utility companies, academia, agricultural associations, land-based provision, and other representatives from the private sector. REAF CIC engages with the AFIC to represent the regional fisheries, shellfish and seafood sector. The AFIC is chaired by Corrienne Peasgood OBE, former Principal of City College Norwich. The LEP works closely with the regional partnership organisation Agri-TechE in delivering activities related to the AFIC.


Agricultural businesses make up 9% of the Norfolk and Suffolk economy, higher than the 4% national average. Collectively, Norfolk and Suffolk produce 12% of the UK’s cereals, 16.6% of the UK’s fruit and vegetables, 22.7% of the UK’s pigs, 17.6% of the UK’s poultry production and 60% of the UK’s sugar. There are other significant strengths right across the food chain, combined with our expertise in climate change and agri-tech.


Eastern England is the UK’s food gateway to the world - the single most important area for export and import of food in the UK. We are working with partners in Lincolnshire, Cambridgeshire, and Peterborough to enhance existing and develop new regional initiatives in shared areas of interest − automation, agri-tech, plant science and nutritious diets − which will present significant opportunity and will unlock our collective potential.


Terms of Reference for the Inquiry:


  1. What are the key factors affecting the resilience of food supply chains and causing disruption and rising food prices – including input costs, labour shortages and global events? What are the consequences for UK businesses and consumers?
  2. What is the outlook for UK food price inflation in the short and medium term? What policy interventions should the Government consider to manage these pressures?
  3. How are the rising cost of living and increasing food prices affecting access to healthy and nutritious food?
  4. How will the proposals in the Government’s food strategy policy paper affect:
  5. the resilience of food supply chains?;
  6. the agri-food and seafood sectors?; and
  7. access to healthy, nutritious food?
  8. Is the current level and target of food self-sufficiency in England still appropriate?
  9. How could the Government’s proposed land use strategy for England improve food security? What balance should be struck between land use for food production and other goals – such as environmental benefit?


AFIC Response to EFRA Committee inquiry into Food Security


Factors affecting the resilience of food supply chains and causing disruption and rising food prices


Farmers and growers are seeing enormous costs to their food production operations, but they are not seeing an increase in margins.


It is important that we look at factors which can be influenced and controlled, and those which cannot. We must look at efficiencies that can be made (such as technological advancements) and the impact of global prices. Agri-food businesses can help themselves by looking at future technology solutions and where innovation can streamline their business. This approach would better enable them to understand what investment / grant funding might be required to support them. Essentially, we must put aside factors which we cannot influence and must focus on what we can do to support businesses and consumers.


The UK and the East of England are globally competitive when it comes to climate change research and activity to drive the transition to Net Zero. Due to the impacts of climate change we are seeing droughts across the UK, but this is not unique. It is a global issue and is impacting countries all around the world. We have dealt well with this issue as a region. The UK must capture and store water at a much greater scale, rather than pumping it out to sea, so we can be one of the most sustainable parts of the world.


We must be careful simply focusing on the term ‘food security’ and should focus more upon a ‘competitive food chain’ where we also look at the global competitiveness of the agri-food sector through increased exports as well as growing for our own market.


An example here would be Norfolk-based Solana Seeds who breed modern potato varieties and produce and distribute high-quality seed potatoes. The company has faced a major headache with significant hurdles introduced to continue access to EU markets with little help given to overcome those. Both Russia and Ukraine were key customers for their products, so they have been further hit by the effects of the Russian invasion of Ukraine. The company feels that a laissez faire approach has been adopted in allowing the import of potatoes with questionable credentials. There has also been a failure to assist them with the red tape associated with other overseas markets.


In terms of the value chain, it is important to address how we can add more value to produce locally to make us more secure and sustainable at both the regional and national level. The food system as it currently stands is broken at one level. Diets consumers are eating are over processed and not aligned to key ambitions around nutrition, health and sustainability.


Local interventions such as the Food Enterprise Park and the Broadland Food Innovation Centre are playing a key role in supporting the region’s food and drink innovation cluster to add value by significantly increasing the amount of local produce processed locally.


Across the UK, we have been poor at collaborating and joining up supply chains to become more practical from a sourcing perspective. There are some good examples of this, such as when Colman’s pulled out of Norwich but could not pull out the mint and mustard growers. Those growers pulled together to form Condimentum which is going from strength-to-strength and has secured a long-term supply agreement with Unilever and is exporting mustard directly to South America.


The agri-food sector must keep pace and use new ingredients that we currently source from all around the world, as we are not producing enough of them here in the UK. An example of this would be the great work Pasta Foods is doing at processing durum wheat into pasta here in this region, but we currently produce very small amounts of durum wheat in the UK. A reset is required around rethinking what crops we need to grow for future diets and what supply chains should look like.


Access to critical infrastructure, such as water and energy, is vital for our agri-food sector. In Norfolk and Suffolk, lack of access to water and energy infrastructure is holding back business expansion plans and inward investment opportunities. It is vital that we as a country generate local electricity to support exciting opportunities and deliver a strategy that provides the required water infrastructure to keep our agri-food sector resilient and globally competitive.


All abstraction licences are being reviewed by the Environment Agency. Until the precautionary principle is reviewed within the Habitats Regulation, there is no help for farmers or growers to get their licences extended. Environmental assessments are undertaken prior to planning which makes things more challenging. Environmental impact reports make the introduction of more reservoirs more challenging, without an adequate system in place to look at them. We must be more flexible with smart regulation that can control short-term water shortages and distribution given its importance.

Further affecting the resilience of food supply chains is the evidence coming out of the National Innovation Centre for Rural Enterprise which indicates that 60% of farms have no formal business plan. The fisheries and seafood sector is in a similar place with few micro and small businesses operating formal business plans. Reports of businesses dipping into their reserves is a real cause for concern. There is an increase in borrowing from banks due to the challenging state they find themselves in at this moment in time.

Input costs


Agricultural businesses have raised the inflationary pressures on input costs as one of their key areas of concern. The incredible rise in price of inputs such as fertilizer, nitrogen, and ammonia, and thus limited use, are all impacting production through lower yields as a knock-on effect. The rising cost of livestock feed must also be taken into account too as this is all linked in our food system, and it is having a major impact on businesses up and down the country and their associated supply chains.


Earlier this year, a rapeseed oil producer informed us that the cost of their bottles, transport and rapeseed have gone from £400 per tonne to £700 per tonne. Soft fruit growers in the region outlined the impact of input costs on their business as despite decent yields and quality of soft fruit, they needed a 15% price increase to cover input costs, but they might only receive a 3%.


The Euston Estate normally budgets £80k to pump water around 1,200 acres of irrigated root crops, but this figure was raised to £250k due to a three-fold increase in electricity prices. With 25% more water being pumped around due to the lack of rainfall, they hope to cap it at £350k.


Farm machinery has been affected by global supply issues. Availability issues are still very apparent. If large agricultural products are ordered now, the reality is that they will not be delivered until late 2023 / early 2024. Combine availability is capped for 2023 - companies were buying combine harvesters of every manufacturer from auction and wherever they could to keep customers supplied this year, thus not supplying their own make. We are still in a situation where every tractor leaving the UK must be vet checked, but every tractor coming into the UK is not checked. We need to ensure that we are creating a level playing field, and not unnecessarily hampering British businesses.


The cost of fuel is not just rising because of global events such as the war in Ukraine, but also because of the Government’s changes to the eligibility of duty, which has caused the unintended consequence of increasing costs because less suppliers are producing red diesel.


The owner of 2 Sisters Food Group and Bernard Matthews has recently highlighted the challenges arising from an eye-watering CO2 price increase of up to 20 times current levels. They simply have no choice other than to pay to keep their supply of CO2, despite suppliers saying the increases will happen immediately. When poultry cannot be processed, it means birds must be kept on farms where there is a potential implication for animal welfare. The overall effect is welfare is compromised, and there is a reduced supply. CO2 is used in the despatch of poultry and in packaging to extend shelf life, as well as in cooling systems for refrigeration purposes.


According to 2 Sisters analysis, the UK uses approximately 2,000 tonnes of CO2 a day. The group said that with plants in Billingham and Wilton due for imminent closure, accounting for 1,300 tonnes, and the current import capacity from Europe at around 600 tonnes, this could result in a huge supply squeeze and a cost increase of £1m a week.


Labour shortages


The Agri-Food Industry Council has produced recent submissions for the EFRA Committee inquiry into labour shortages in the food and farming sector, as well as the Independent Chief Inspector of Borders and Immigration’s inspection of the immigration system as it relates to the agricultural sector.


As we set out in those responses, we are seeing labour shortages across all areas of the food chain in Norfolk and Suffolk – in primary agriculture especially seasonal picking roles; food processing, especially meat and poultry processing; and across the logistics sector.


One of the biggest challenges facing horticultural and livestock businesses across Norfolk and Suffolk is this shortage of labour, for both permanent and seasonal staff. Despite the Government’s recent Food Strategy focusing on maintaining the current levels of domestic food production, fruit and vegetables are going to waste because businesses do not have the right staff available at the right time to harvest them. Businesses are scaling back on production as they cannot recruit enough.


Russian and Ukrainian workers have been part of the solution to the significant impact caused by the loss of EU workers, however this resource ended when the conflict in Ukraine began.


There is still a pipeline of seasonal labour, but some farmers and growers would like direct contact rather than having to go through the Government-appointed intermediaries. This has led to a real layer of bureaucracy and significant expense when it comes to sourcing seasonal labour, particularly for those that have significant experience in this area and are now having to pay large fees for the privilege of using intermediaries rather than use their own in-house expertise.


We welcome the expansion of the seasonal workers scheme and the Government’s commitment to support businesses investing in new technologies and automation, but this will take time and short-term actions are clearly required urgently to avoid failing on a key commitment of the new strategy.


Global events


Rising costs for fuel, fertiliser and animal feed were sent soaring after the war in Ukraine hit world commodity markets.


Climate change is significantly impacting the way in which we produce food. From the impact on our water infrastructure to selecting which crops should be part of the mix in warmer temperatures, we need to ensure that our food system is as resilient as it can be to this challenge.


The ongoing drought has delayed the harvest of East Anglia's sugar beet crop - prompting British Sugar to push back the opening dates for its factories. The firm announced that its factories at Bury St Edmunds in Suffolk and Cantley in Norfolk will open later than usual this year, on October 5 and 20 respectively. It said this was due to "exceptional climatic conditions over the summer", with these factory areas receiving less rainfall than Wissington in west Norfolk and Newark in Nottinghamshire, which will open on September 26 and 19 respectively. The 10,500-acre Euston Estate said that the crops in their beet fields have been re-booted by recent rainfall, but they had already lost 25% of their beet plants which died during the drought. They estimate their overall sugar beet yields will be down about 30% on average, costing a potential £100,000 in lost revenue for a business already grappling with huge rises in energy fuel and fertiliser costs.


Outlook for food price inflation and impact of rising cost of living and increased food prices on access to healthy and nutritious food


There are many issues that have driven food price inflation, including the war in Ukraine and climate change. There is a real possibility that these prices will continue to increase.


ONS figures show us that food and non-alcoholic beverage prices have continued to rise. There was an overall increase of 2.3% between June and July 2022, taking the division's annual inflation rate to 12.7% in July 2022, up from 9.8% in June. July’s rise in prices follows three months of increases (of between 1.2% and 1.5%) and is the highest monthly increase since May 2001, when the constructed historical estimates recorded food and non-alcoholic beverage annual inflation to be 2.8%. 


The poorest families in society will be more adversely affected by the cost-of-living crisis and the rising cost of their food shop, hindering their access to healthy and nutritious food. The third sector has worked closely with industry and Government to support access to food. The generous nature of the public and Government to support initiatives such as food banks is incredible, but too often we see products that are tinned and over-processed and there is a real need, as many charities up and down the country are leading on, to deliver hot and quality food to people in need – ranging from homeless individuals to those with a roof over their head but no means to pay for hot and nutritious food due to the cost-of-living crisis. It is troubling to see the price of biscuits and crisps cheaper than the price of apples for example, this is affecting consumers’ choices as they have a limited budget and want to see their money go further in feeding their families.


Consumers eat for nutrition and health purposes. There is a real need to drive a cultural conversation around food with an educational programme for children based on the nutritional benefits of food, how we cook and consume healthy food, and more sustainable approaches to food production, such as future ingredients/crops. Furthermore, it is vital that we strike a conversation with the public around why food has become so expensive and the factors behind this such as input costs, access to labour, long supply chains, logistics, etc. We must trigger a reset so that our food system truly delivers affordable, sustainable, and healthy diets. The health of our nation depends on the health of its people and the environment.


How will the proposals in the Government’s food strategy policy paper affect:


The Government’s Food Strategy has noticeable objectives around the following:




Despite the strong commitments around building the UK’s resilience to future crises and shocks, more work is required to truly address resilience in food supply chains given the impact of inflation, cost of inputs across the board and challenges coming out of the sector such as the concerns over 2023 production cost increases and intelligence suggesting many are dipping into their reserves and seeking loans from the bank.


The sector has welcomed actions from Government to date which support farmers and food producers manage increased input costs, but this has not reached the sector far and wide. The data produced by the National Innovation Centre for Rural Enterprise which indicates that 60% of farms have no formal business plan is a concerning, but realistic, statistic and will require more support from Government to address this situation – as the strategy notes effective business planning is a key enabler of resilience at the individual farm level.


The appropriate level and target of food self-sufficiency in England


In order to address the level of self-sufficiency required in the country and also address the global competitiveness of our agri-food sector, the UK’s role should be to increase the provision of food production over the next 20-30 years.


In the context of climate change, we must look at the future of crop growing. There is world-leading research undertaken here in the UK that is setting the direction around new crops that may be produced using less water. If we miss this opportunity, climate change will significantly affect yields in the years to come due to soaring temperatures.


With a shift towards a plant-based diet, we must build on the Department for International Trade’s High Potential Opportunity based on Norwich Research Park’s expertise in ‘Plant Science for Nutrition’. Consumers are also demanding more local food and greater transparency and traceability of our food.


To deliver the transition to Net Zero by 2050, it is vital that we support farmers and growers to maintain and increase their productivity, whilst supporting the delivery of this target. Moving forwards, we really need to understand how we achieve productivity for the sector – in the past, this has been to the detriment of natural capital and the health of soil with big machinery. As showcased in the Agri-Tech Strategy and the more recent automation in horticulture review, we have world-leading scientific and agri-tech expertise in our region and across the UK. We must support technological trends such as robotics, gene editing and Controlled Environment Agriculture with public investment to de-risk or unlock some of these game-changing opportunities.


Controlled Environment Agriculture is one part of the solution to increase our level of food production. We have seen tomato production increase by 20% following the construction of glasshouses. In this region alone, Anglian Water have provided ground source heat pumps to support greenhouse developments which are producing 10% of the country’s tomatoes. The region is also home to new projects, including Fischer Farms at the Food Enterprise Park and OneFarm at Newmarket. These initiatives will change the dial – Fischer Farms will be the largest vertical farm in the world when it is up and running, producing 70,000 bags of lettuce leaves every day of the year using just 5% of the water used in traditional farming and no chemicals at all. The energy for this project will be supplied at low prices through a solar farm.


The pig sector is in decline with sows down 13%. This will have an impact on this region, where we produce 22.7% of the UK’s pigs. 70% of our land is currently used for wheat to feed pigs and poultry.


We must equally address the colossal problem around food waste we are currently witnessing in this region and all around the UK. Farmers and growers have reported ploughing their produce back into fields and throwing away tonnes of produce due to challenges around access to labour and logistics, as well as the demanding requirements imposed by retailers as part of their supply agreements. Much of this produce is high in nutrition such as fruit and vegetables.


Lessons can be learnt from Singapore for example, with their 30% by 2030 strategy focused on building their agri-food sector’s capability and capacity to produce 30% of their nutritional needs locally and sustainably by 2030. To overcome their land and resource restraints, farmers have turned to technology and innovative ways to increase production such as Controlled Environment Agriculture. This has all been backed by a $60 million Agri-Food Cluster Transformation Fund to provide funding support to farms to build and expand their production capabilities and capacity and over $23 million in funding for R&D in sustainable urban food production.


What balance should be struck between land use for food production and other goals


There is no real clear policy at the moment that strikes the right balance between food production and the environment. We are not currently growing the right produce to fit with climate change and future diets. Therefore, a move towards a national land use framework will be positive and provide clearer strategic direction.


It is vital that our countryside remains a multi-functional and dynamic space where we produce food and energy for the country and the rest of the world. Expectations of farmers and environmental ambitions must be met together as we deliver sustainable domestic food production. It is vital that Government continues to make the Environmental Land Management Scheme practical, whilst offering sufficient economic incentives to deliver the transition to Net Zero.


September 2022