Paying the price of a food shortage

Restaurants and cafes - where we consume much of our food - are also facing constraints. The chef Andrew Fairlie has seen the price of most imported ingredients shoot up in the past few months. "Everything's gone up," he says. "Chocolate, coffee, cheese but especially flour, which has increased by 60%." He says that his suppliers wrote to him earlier this year to warn him that prices would increase, although so far he has been able to absorb the price hike rather than pass it on to customers at his two-Michelin-starred restaurant at Gleneagles.

But Domenico Crolla, owner of the award-winning Italian restaurant Bella Napoli in Glasgow, is being forced to rewrite his menu to reflect the "drastic" price hikes he has had to face in recent months. "Flour has gone up from £11 to £18 for 25kg, but I've been told by my Italian supplier that it could soon be even more, and cheese is already up by 25%," he says. "Ready-made pasta from Italy that used to be £13 a case is now £18 a case." But the biggest increase is in vegetable oil, which has leaped from £9 a drum to around £22, because crops are being used for biofuel, making it scarcer as a food commodity.

The price of olive oil, which has little potential as a biofuel, has changed little.

It's painfully apparent that British consumers are feeling the price pinch most in grain-based products, and in beef, lamb and pork, which require grain for animal feed. The UK, a fiercely free-trading country, has relied heavily on these imported commodities for hundreds of years. Yet the global price of grain - the general term for wheat, maize and rice - has trebled in the last year.

This is due to a variety of reasons. Unprecedented demand from China and India, which are adopting an increasingly meat and dairy-based Western diet and need more cereals for animal feed, means that resources are being spread more thinly. Poor harvest in parts of the world, notably in Australia, which last year suffered droughts that crippled crops destined for China, have exacerbated the situation.

World stocks of grain are currently at less than half the recommended levels. There are about 50 days' worth compared to 120 days in the 1980s, and levels could slip further if climate change continues to affect world harvests. Biofuels are also having an impact. In an attempt to offset the steep increase in the price of oil, 2.5% of all petrol and diesel sold in the UK must now be made from plants that would otherwise be used in food. In the US, a whopping 25% of maize crop went into biofuels last year, compared with 5% two years ago. "That's the percentage that was traded on the world market," explains Professor Peter Gregory, CEO of the Scottish Crop Research Institute (SCRI) in Invergowrie. "You don't need much perturbation on that for it to have significant knock-on effects, and that's what we're seeing in the prices."

The rocketing price of oil, used in the production and transport of food, is having a huge effect on the prices we pay.

It's hardly surprising, then, that grain-producing countries are putting a ban on exports to protect their own food security - that is, to ensure their ability to feed their own people first. In retaliation, France, soon to take over the European Presidency, is seeking more agricultural subsidies for Europe because it, too, sees the need for a parallel protectionist strategy in order to be able to face the food crisis. But Peter Mandelson, Europe's trade commissioner, warned yesterday that the effects of this "spiral of protectionism" in the grain trade could leave Britain out of the loop. "We really are on a knife-edge," he said.

Mandelson's sense of urgency is no doubt rooted in the fact that Britain is only 70% self-sufficient in cereal grains, down from 90% in the 1980s. Scotland is even worse, at only 40%. Most of that goes into the whisky industry and to animal feed. It imports the rest from England and Canada.

Scotland is thus almost totally dependent on others for this most basic of commodities for human consumption, which raises the question of whether Scotland could, if need be, feed itself.

The answer is yes, but only after significant change in land use and a rather drastic adjustment of the national diet.

Professor Gregory says: "Technically, this is not a crisis for Scotland. There is enough arable land to provide for every person in Scotland. Our cereal yields are around twice the global average."

But what we would actually be eating is a moot point. It would be possible to start making bread for five million people living in Scotland if we switched rape fields for wheat fields. The change in world grain prices means many farmers are already growing more wheat, oats and barley - Scotland's indigenous healthy grains. The potential of barley as a component in commercial breadmaking is currently being developed by the SCRI, as are ways of growing it internationally. And if we had to reduce our consumption of rice and pasta we could always have potatoes instead - the world's number-four food staple after rice, maize and wheat, which grows abundantly here.

In fact, Scotland is regarded as the world expert on potato growing and, in August, the SCRI will host an international conference to look at how it can help feed the world. The SCRI holds the Commonwealth Collection of some 2300 varieties and produces the highest-quality seed potatoes.

A delegation from China will attend the SCRI conference. It is keen to establish a proper regulatory body for producing seed potato and has been working with the SCRI for the past two years on establishing varieties that would grow well there. "We're hoping they will buy some of our Scottish varieties," says Professor Gregory.

But will finding a way for Scotland to feed itself take priority over feeding the world? One of the aims of the Scottish Government's nascent national food policy is to make sure there's a steady supply of safe food, and that Scotland doesn't run out of the essentials. Phase one of the policy, the so-called national food conversation, which invites comment from all interested parties, comes to an end on Friday. Food minister Richard Lochhead will announce key findings at the Royal Highland Show in June before the final policy is launched later this year.

At apparent odds with this noble intention, however, is the fact that food and drink is Scotland's top exporting industry. Sales to Europe are worth £3.6bn, and those to the rest of the UK worth another £2.8bn - leaving a relatively low £0.9bn of sales in Scotland. Fish and shellfish exports make up the largest proportion of total food exports. The biggest markets for Scottish produce - especially premium fresh fish - are France, Spain and Italy, followed by Germany, Ireland and the US.

This is something many commentators, including Andrew Fairlie, who was a keynote speaker at last week's conference on the government's national food policy, say needs to be addressed if Scotland is to contemplate self-sufficiency with a varied and interesting national diet. Asked if this matter had been raised in the national conversation, Richard Lochhead replied: "There are a wide variety of views, and I welcome the opportunity to discuss these ideas with a range of experts.

"I have been overwhelmed by the response so far, with over 20,000 unique visitors to our website. The wide array of responses show food is clearly a subject close to many of our hearts."

Price comparison

Apr '07 Apr '08
Baguette 45p 65p
Cornflakes (500g) 83p 86p
Cucumber 42p 34p
Fusilli pasta (500g) 37p 67p
Butter (250g) 58p 94p
Baked beans (420g) 28p 31p
Iceberg lettuce 77p 75p
Minced beef (500g) £1 £1.64p
Cheddar (250g) £1.21p £1.52p
Salad tomatoes (6) 69p 69p