Matthew Lynn Matthew Lynn

Is climate change really to blame for rising food costs?

Credit: Getty images

Everything in the shops is getting more expensive and restaurant bills have become prohibitive. We are all aware that food price inflation is a major factor in the overall cost-of-living crisis. It might seem plausible, as claimed today, that climate change is a major factor driving this. After all, weird weather, wildfires and droughts make it far harder to grow crops, right?

Well, perhaps. The trouble is there is just one slight flaw: global food prices are falling in many cases this year, not rising. According to a widely-publicised report by the Energy and Climate Intelligence Unit, food bills have risen by £605 per year for the average British household at least in part because of climate change. It argues that floods and droughts have worsened crop shortages, while the rising cost of energy has hurt the agricultural industry, putting even more pressure on supplies. The result? Everything on the shelves at Tesco and Sainsbury’s is a lot pricier. As the weather changes even more that could only get worse.

There is a superficial plausibility to the argument. After all, no part of the sector is more exposed to the weather than farming. Here is an odd fact, though. As it happens, most global food prices have been falling this year. Wheat is down by 28 per cent. Milk is down by 18 per cent, and soybeans are down by 8 per cent. That isn’t to say there haven’t been some dramatic rises. Olive oil, for example, has almost doubled in price, which is a big issue for anyone who shops at Waitrose. But overall, it is very hard to claim that basic foodstuffs are rising in price. 

There is a problem with food inflation in the UK, but that has much to do with EU quotas and tariffs (that we still haven’t dismantled) and with planning restrictions that make it harder lower-cost grocery chains from competing with what is increasingly a cosy monopoly between the big four.

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Matthew Lynn
Written by
Matthew Lynn
Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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