Wasted food isn't to blame for high food prices, so why is Gordon Brown intervening in the kitchen?
Ordinary people do waste food. The efforts of environmentalists have made things worse by discouraging the use of packaging that prevents spoilage. A large part of the problem is simply that people are more likely to buy their food in a large weekly shop (due to long-term societal changes such as the increase in the number of women working) and have to estimate how much they'll need. They'll err on the side of having enough when food isn't that expensive, and another trip to the shops is an inconvenience, and food will be wasted.
However, with prices rising people will be more cautious and wastage should decrease. It isn't a significant problem that needs a political solution. Neither is it the cause of the current rapid rises in global food prices. The reason why Gordon Brown has suddenly decided this is an issue he should address isn't that he seriously thinks a sudden outbreak of wastefulness is making a major contribution to rising food prices. He's trying to send a message to hard-pressed families grappling with high food prices that he isn't to blame; it's their fault. If this doesn't work he'll probably move on to attack the supermarkets.
Brown is hoping that he can create enough of a distraction for voters to miss that it is the politicians who are the real problem. Here are five ways, among others, politicians contribute to high food prices:
- Biofuels. A leaked World Bank report suggests that biofuels have increased food prices by up to 75%. The United States is the biggest offender with its huge corn ethanol subsidies but our Government has just introduced the Renewable Transport Fuel Obligation which will mean Britons are forced to burn large amounts of what could otherwise be food in their cars, driving up prices.
- The Common Agricultural Policy. High import tariffs keep out foreign competition and push up prices.
- Motoring taxes. Transporting food for production or to market is more costly when petrol prices are high. Taxes constitute two thirds of the price of petrol and, therefore, have a significant impact on the cost of bringing food from the field to the plate.
- Excessive food safety regulations. Christopher Booker and Richard North, in their recent book, describe how many companies involved in producing food have been crippled by excessive or unjustified regulation. This reduces competition and will push up prices.
- Energy taxes and regulations. At various stages in the process producing many foodstuffs uses substantial amounts of energy. Government regulations, such as the Renewables Obligation, increase the price of energy and therefore further drive up the cost of food. Ofgem estimate that green regulations make up 8% of the average household electricity bill and they will make a substantial contribution to industrial energy costs as well.
Cross-posted from the TaxPayers' Alliance blog.