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Food industry faces ‘unprecedented crisis’

By Rod Addy , 15-Jun-2009

The UK food supply chain must contend with the challenges of rising oil prices, dwindling resources, climate change and poverty if it is to remain sustainable in the 21st Century.

That was the verdict of James Walton, chief economist at grocery think tank IGD, speaking at its Sustainable Distribution 2009 conference in London on June 11.
With UK gross domestic production set to fall by 4% this year, Walton said: “We are facing a crisis as great as the Great Depression of the 1920s, but there is no precedent for this because of the situation with limited resources.”
He said that nations had been able to expend resources to propel themselves out of previous recessions, but this could no longer be the case.
Climate change remained a major threat because, despite the efforts of all those in the food and drink supply chain to increase efficiency, greenhouse gas emissions were still rising.
Another big challenge was maintaining adequate food supplies in the face of continuing population growth. “The population will always run ahead of our ability to feed it and the golden age for the food shopper enabled the population boom.”
He continued: “Energy output is peaking and, unless something drastic happens, there will be an energy crisis in the next 10 years.”
This would affect food supply leading to, among other things, increased food prices, which will push those who had moved to the right side of the poverty line back on the wrong side, said Walton.
Significant efforts were being made to devise alternative sources of power, such as biofuels, with Ensus among the players leading the way by opening a large biofuels plant in Teesside in June.
But juggling land for biofuel and food crop production remained a core challenge, he added. “The best approach lies in ensuring that progress in one area does not undermine progress in another.”