This article was originally published by Food Manifesto on 8th January.

When Britain leaves the EU, farmers will no longer receive direct payments from Brussels, and the UK governments will have to make their own policy on subsidies. Some people will see this as an opportunity to reduce costs, but the Sustainable Food Trust’s new report The Hidden Cost of UK Food suggests that cutting subsidies might be a false economy.

The report shows that agricultural subsidies make up a comparatively small proportion of the total costs of UK food – just 2.5p for every pound spent on what we eat. That’s because there are huge hidden costs in the food system, such as the health care bill caused by poor diets, and the environmental impacts of intensive farming. Farm subsidies, meanwhile, will be pivotal in shifting our food system towards more sustainable practices, saving us money in the long run.

The report highlights the damage that our current food system causes, and the huge economic cost of this to society. Food appears to be cheaper than ever in the UK, yet the price we pay at the checkout is masking a hidden cost. In reality we are paying for our food twice – for every £1 we spend on food in the shops, we pay another £1 in other ways.

One example is healthcare. With a whole range of negative impacts, from pesticide poisoning to antimicrobial resistance, food-related healthcare costs account for an extra 50p of every £1 spent on food. Broken down, we can see the severe impact of poor diet, as cardiovascular disease, diabetes and cancer rates continue to rise. Cardiovascular disease is particularly significant, forming 9.2% of NHS costs, at £2.5 billion per annum. Obesity costs around £3.95 billion, while treatment of malnutrition in the UK costs £7.3 billion annually.

How is our food system helping to create this problem? The rise of supermarkets and promotion of processed food is one aspect that has led to decreasing nutrition in our diets. As retailers compete to cut costs and lower prices, we’ve seen food increasingly packed full of cheap, processed ingredients that are also addictive, such as sugar. Another aspect with serious and far-reaching repercussions is the loss of diversity in the foods produced, particularly the narrowing of the range of crops grown, and the loss of crop varieties.

Many diets now rely on a small number of staple crops, such as wheat, maize and soya beans, while the diversity of food produced in general has seen significant decline. In Wales, for example, the amount of land producing vegetables has declined by half in the last 40 years. This not only impacts our health, but threatens future food security and reduces habitats for wildlife.

Aside from diet, our food system directly impacts our health through production practices, and the costs of these can be huge. Antimicrobial resistance, for example, is a problem created in part by the overuse of antibiotics in livestock production, which is now having a catastrophic impact on our ability to treat even some minor infections. It is estimated that the economic cost of antimicrobial resistance in the UK is £10 billion per year, and around £2.34 billion of this is likely attributable to livestock production.

There are also, of course, health costs associated with exposure to pesticides, particularly to endocrine disrupting chemicals (EDCs), and these can amount to £12 billion per year. Many of us unwittingly come into contact with pesticides via residues in food and water, or we may be exposed to them directly in our environment. In fact, one study found that almost 5% of all fruit and vegetable samples tested contained one or more pesticide residues above the legal limit, while a quarter of all surface water reservoirs used for drinking water in the UK are at risk of exceeding EU pesticide limits, according to the report.

Environmental pollution and degradation associated with food production also generates major economic costs that many of us may be unaware of. In fact, environmental impacts account for an extra 36p for every £1 we spend on food. Agriculture-related greenhouse gas emissions cost society £10.35 billion per year in the UK, while costs from nitrogen pollution are estimated to be £11.88 billion, or about £185 per person per year.

Soil degradation is another major issue. Over 99% of human food calories come directly or indirectly from plants grown in soil. Food security for the global population depends on maintaining soil health to ensure its long-term productivity. Soil contains 25% of global biodiversity, and over 98% of the genetic diversity in terrestrial ecosystems, and provides habitats for insects, invertebrates, microorganisms and small mammals. Soil also stores approximately 2,500 billion metric tonnes of carbon, essential for soil fertility, water retention and plant health. However, most croplands have already lost 40–60% of their organic carbon to the atmosphere. Globally, more than half of all soils are now classified as degraded or severely degraded. In the UK, the economic cost of the loss of soil carbon is estimated to be £3.21 billion per year.

These are just a few examples of the most significant costs generated by the negative impacts of food production in the UK. There are numerous others, including water pollution, food importation and biodiversity loss. The food system is not serving its people or the environment. There is currently little financial incentive for food producers or businesses to do the right thing. They do not have to pay for the damage they inflict and they are not rewarded financially for the care and conscience they give to the countryside.

This urgently needs to change, and with Brexit on the horizon we must ensure that future food and farming policy internalises the hidden costs back into the food system, creating the right incentives for sustainable progress. The continuation of subsidies is essential to  reward farmers for positive practices which protect the environment and support human health.

There is clearly a lot of uncertainty around the future of food policy in Wales, as indeed there is across the rest of the UK, but Brexit provides an opportunity for Wales to lead the way, and outline a genuinely sustainable future for food and farming.

Photograph: Andrew Gustar

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