Written Evidence submitted by McCain Foods (GB) Ltd (FS0056)

McCain welcomes the opportunity to respond to the EFRA Committee’s inquiry into food security. Please find below our response to the issues raised in the call to action.

Executive summary

●        The UK food and farming sector faces a number of challenges, including the Ukraine conflict, international trade disruption, labour shortages, an ageing workforce, and climate change. These challenges combined, at a time of rapidly rising inflation, are a major threat to the UK’s domestic food security.

●        McCain is the largest purchaser of the British potato crop, buying around 15% of the total market from 250 growers. We have a long-term commitment to British farming and support farms, growers and consumers through schemes such as FareShare and our £25m commitment to British potato growers. However, we cannot keep British farming afloat alone. We propose that the Government launches long-term solutions to today’s issues through initiatives such as a Food Production Emergency Relief Fund, a national strategic farming reserve of essential farming supplies, and a new Food Security Council.

●        We largely welcome the measures set out in the National Food Strategy, despite it containing fewer commitments than we had expected, and in the short-term see the expansion of the Seasonal Workers Scheme as a necessary measure to relieve pressure on the food and farming sector.

●        The upcoming Land Use Strategy provides an opportunity for landmark legislation to set out UK land use in an environmentally-friendly and technologically innovative way. It is an opportunity to implement regenerative agriculture practices into legislation, and, as pioneers in this field, McCain looks forward to supporting policymakers in developing guidelines for farmers and land managers.

About McCain

McCain is the UK’s largest branded manufacturer of frozen potato products, employing around 1,200 people across five processing facilities in Scarborough, Hull, Grantham, Whittlesey and Wombourne, with a dedicated seed potato business in Montrose. We recently invested over £100m to rebuild our production facility in Scarborough, and commit regular support to other sites. This includes a recent investment into our Hull plant as well as wind turbine developments around our Whittlesey site, which generates 70% of the plant’s electricity needs.

We are committed to British agriculture. McCain is the largest purchaser of the British potato crop, buying around 15% of the total market from 250 growers, some of whom have worked with us for three generations. In order to ensure the continued development of British potato farming, we have pledged to invest £25m into the industry to support sustainable farming practices. Meanwhile, we have set up a collaboration with our partner McDonald’s to invest £1m into farmer grants and research to boost soil quality and optimise water management.

We also support the communities in which we live and work through partnerships with charities and initiatives such as the Family Fund, to which we have donated over £1m, which provides grants for families with disabled or seriously ill children. During the Covid-19 crisis, we also accelerated our partnership with FareShare to donate over 1m meals to those most in need in the UK. We also support local and startup businesses to succeed, including through our latest programme Streets Ahead, through which we’re investing £100,000 in food service startups and sponsoring 115 people from less-advantaged backgrounds for entrepreneurship training.

Key factors affecting food supply chains [Question 1]

The pandemic stalled the production and transport of foods, and heightened fears around food safety and levels of hygiene. Hopes that the food system would have a stable recovery following the pandemic’s peak have been dashed by a range of issues that are outlined below:

Ukraine conflict

We have seen supply issues become acute in 2022 as a result of the Russian invasion of Ukraine, which has resulted in shortages of fertiliser, sunflower oil, and grain. Businesses such as McCain have carried out the costly process of reformulating and rebranding product ingredients due to sunflower oil shortages. Meanwhile, for consumers, supply shortages exacerbated by the war are impacting the supply of food in supermarkets across the board, culminating in the Bank of England’s CEO Andrew Bailey stating that people face an ‘apocalyptic’ risk from increasing food prices[1].

International trade

Difficulties on our European borders also continue post-Brexit, as a ban on both exporting and importing potato seed to and from the EU implemented in 2021 is continuing to affect the availability of certain varieties of potato seed and disrupt new variety development plans[2].

The complexity of international food supply chains is hard to overstate. In 2020, nearly half of all food consumed in the UK was imported. International supply chains are quite undiversified in the food sector; certain products are highly reliant on single or low numbers of sources - Ukraine and Russia, for example, account for 75-80% of the world’s production of sunflower oil.

The ongoing fertiliser crisis is another example of this. Ammonium nitrate fertiliser prices have soared by 152% over the past year for UK producers[3], and global fertiliser prices have risen by 30% since the start of 2022, following last year’s 80% surge.[4] We recommend proposals - a Food Security Relief Fund, a UK Food Security Council, a build-up of strategic reserves, and the monitoring of trade standards to ensure that British farmers are not undercut - to bolster the UK’s food system against international shocks and provide better stability of supply at home.

Labour shortages / ageing workforce

As already noted by the EFRA Committee, farms are experiencing serious labour shortages[5]. The total number of people working on UK agricultural holdings fell between 2020 and 2021 by 1.4%[6]. At McCain, we are working to provide a high-skill farming industry to resolve this in the long-term. We have taken our role as a leader and major employer in the communities in which we live and operate seriously for decades, providing funding and mentoring support for thousands of people to help them grow in their roles and succeed in life.

We are job creators, and have made more than £100m of investment across our five plants in the last five years. We also place great importance in our role as community leaders, regularly working with charitable and community initiatives to support our staff and local places.

A related issue in this area is farming’s rapidly ageing workforce, with a median age of 60 among our farm holders and only 2% being under the age of 35 as of 2016[7]. The trend of an ageing workforce is particularly marked in field crop farms / mixed cropping farms, where 40% of holders were aged over 65.

In 2015, as few as 3% of young people were considering a career in farming[8]. Yet 80% of farmworkers would recommend it as a career[9], and that career is increasingly reliant on more new entrants being better trained and educated. It is paramount for the long-term survival of our industry, and the resilience of the UK’s food security, that a new generation of farmers is encouraged to enter the industry.

Climate change

In recent years, climate events ranging from drought to flooding have impacted farming and the potato crop. Supply chains, and therefore food prices, must now contend with the cost of living crisis while dealing with unprecedented environmental conditions. With some crop yields down 40% in parts of the UK - more than the European crop yield which is reportedly around 20%[10] - potato farmers are warning that record temperatures will drive prices of items such as chips even higher[11]. The increasing risk of such yield variance is a core reason why farms should be incentivised to adopt the regenerative agriculture practices that we have detailed below.

What policy interventions should the Government consider to manage inflationary pressures and other challenges? [Question 2]

Amidst the above challenges, the Bank of England predicts that inflation will continue to rise to around 13% in the last quarter of 2022 - with several independent analysts predicting it could go far higher - and we expect food price inflation to form a major part of this.

At McCain, we take our role in supporting the food security of those on the lowest incomes extremely seriously. Most recently, we have donated the equivalent of 1m meals through the FareShare food charity. Since 2013, our potato products, including oven chips and jacket potatoes, have been distributed through over 3,000 charities and community groups within the FareShare network.

The Government has options to further tackle this challenge, including:

Food Production Emergency Relief Fund. To help mitigate food security risks the Government should introduce a Food Production Emergency Relief Fund to provide immediate grants to food producers impacted by supply chain disruption to ensure continued food production and long-term domestic crop viability. Such a scheme would support farmers and producers to meet unexpected cost spikes and help secure the supply of food by reducing the risk attached to the production of certain crops.

Moving from ad hoc support to a more flexible, agile and targeted grant scheme would mean producers and specific sectors could receive support quickly, ensuring continuity and stability of our food supply. Not only would this support UK farmers and build resilience in the food system, it would go some way to protecting consumers from escalating prices for essential food, which is hitting those on the lowest incomes the hardest.

Reserve of farming supplies. To ensure long-term UK food security, the Government should also create a new national strategic farming reserve of essential farming production supplies. This would ensure continued domestic food production during periods of restricted international supply, and therefore bolster the stability of the UK’s food system.

Food Security Council. To respond to international shocks in food supply, in a supportive and industry-focused manner, the Government should set up a UK Food Security Council. As a permanent addition to the Food Resilience Industry Forum - established during the pandemic - and the Food and Drink Sector Council, the new council should contain representatives from industry to advise Government on immediate action in response to short-term disruptions and support longer-term resilience planning.

If the Government takes action now, it will achieve a number of strategic goals identified in its recent Food Strategy, including:

●        Maintaining the current level of domestic food production during future periods of supply chain disruption.

●        Supporting the UK to be a reliable global food exporter with an expanding market footprint.

●        Helping the UK to meet its commitment to sustainable farming.

The National Food Strategy and supply chain resilience [Question 4. 1]

While we propose the above policies to support food security, we largely agree with the measures set out in the National Food Strategy. In particular, within the ‘food security and sustainable production’ section, we support the commitment to maintain current levels of food production but would go further to push for increased domestic food production, especially at a time of increasing geopolitical and supply chain instability.

In the short-term, the expansion of the Seasonal Workers Scheme to 40,000 visas this year provides some much-needed support to the industry. In the longer-term we applaud the £270m commitment to the Farming Innovation Programme and £120m allocated to research across the food system.

In the longer term, we welcome the Government’s proposals that align with regenerative agriculture practices by striking the balance between short-term food security and long-term sustainability. The Sustainable Farming Incentive will play a key role in this and we support the incentive. However, Defra should work closely with industry to develop the scheme over the coming years, including expanding it from soil protection and fertiliser usage to other practices such as cover crops and reduced tillage.

While the Land Recovery Scheme can play a role in the UK’s wider biodiversity, we agree with the Food Strategy’s announcement that this would be reduced to devote more land to food production. Beyond this, a focus on innovation both in terms of agricultural practices and funding for R&D can future-proof the UK’s farming industry against similar crises to those that we are currently experiencing.

How the Land Use Strategy can support food resilience [Question 6]

The Government’s proposed 2023 Land Use Strategy provides an opportunity for landmark legislation to set out UK land use in an environmentally-friendly and technologically innovative way. We suggest that this lays out a set of principles that are embedded across land management and farming organisations.

Such a strategy can provide both short- and long-term solutions to improve food security. It provides a chance to review the initial takeup of environmental land management schemes (ELMs) and assess where changes and new schemes can be introduced. Additionally, it comes at a time when food security is a far higher priority than when the ELMs were first introduced and therefore can offer some steps towards recalibration.

Increasingly, key parts of industry see regenerative agriculture as the future of land use. It includes a set of practices that strike the right balance between food production and other goals like environmental benefits.

At McCain, we are proud to be pioneering the development of these practices through six pillars:

1.       Ensuring farm resilience. Through long-term farm competitiveness and climate change adaptation.

2.       Enhancing crop and ecosystem diversity. By encouraging biodiversity and 28 species of cash crops and cover crops.

3.       Armouring soil. Preferably with living plants, we push for soils to be covered all year round.

4.       Minimising soil disturbance. By reducing tillage to maintain structure and keep carbon in the soil.

5.       Reducing agro-chemical impacts and optimising water use. By precisely managing crop protection products, fertiliser and water applications.

6.       Integrating organic and livestock elements. This incorporates green manure, compost or livestock elements to increase organic matter and soil fertility.

We have developed these practices over many years and across different countries. This has included partnerships to support the technical transition of farmers to regenerative agriculture. For example, we have collaborated with the Earthworm Foundation in Europe, developed a new soil health education programme in the Soil Health Institute of the US and Canada, and worked closely with local experts in the UK.

The adoption of these practices will provide both short- and long-term support to the UK’s food security and environmental priorities. Specifically, it will play a key role in:

●        Supply chain and food security. Regenerative agriculture practices are vital in ensuring the long-term sustainability of the UK’s food production by ensuring high levels of soil health, and a circular ecosystem.

●        Sustainable food production. Regenerative agriculture will play a key role in delivering the

Government Food Strategy’s ambition. Through these practices, regenerative agriculture will

help restore wildlife to their natural habitats, maximise the value of natural resources and

increase farm productivity, and enhance the beauty of the natural environment.

●        Adapting to climate change. The Government has made positive steps towards achieving its goals of net zero carbon emissions by 2050. However, as argued by groups such as the World Wide Fund for Nature, more must be done given agriculture’s critical role in emissions. By restoring soil health, increasing biodiversity and reducing pollution, regenerative agriculture has a central role to play in achieving this ambition.

McCain has committed to implementing regenerative agriculture practices across 100% of our crop by 2030. Below are ways in which we suggest how the land use strategy could be used to accelerate adoption of these practices:

●        Expand the Sustainable Farming Incentive to include all regenerative agriculture principles - We propose that all regenerative agriculture principles are incentivised from 2023 onwards to take advantage of its benefits as soon as possible.

●        Incentivise industry commitments to regenerative agriculture - All farms should be incentivised to join us in transitioning to 100% regenerative agriculture practices by 2030.

●        Fund new innovation research into regenerative agriculture - Regenerative

Agriculture should be a key focus of the Government’s Farming Innovation Programme and other food innovation funding packages.

●        Promote regenerative agriculture in the upcoming land use framework - Regenerative agriculture is a key tool in realising the Government’s long-term objectives. We hope the framework promotes and incentivises farmers to embrace them and it must acknowledge that landowners need to be incentivised to encourage tenants to adopt regenerative agriculture, as well as the farmers themselves. This is crucial because it is a major challenge for implementing regenerative agriculture across rotations.

We welcome the Government’s increasing focus on food security, an issue which has rarely been viewed as a priority but, as recent events have shown, forms a key pillar of our society. We look forward to seeing how the EFRA Committee responds to its consultation and working closely with the Committee to support its members in developing effective long-term solutions to today’s issues. While we have described a range of challenges affecting the food and farming sector, the raised visibility of our industry provides a major opportunity to drive forward a modern, resilient and sustainable food system through effective policy interventions.

September 2022