March 4, 2001

We'll all pay for food safety

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In pre-Christian Ireland, a woman was often given the runt of a pig-litter to raise by hand. If she managed to save the pig from dying, she was entitled to two-thirds of its meat in the event of a divorce. The custom of keeping a pig “out the backyard” remained a feature of Irish country life long after divorce became illegal.

The pig acted as both a pet and a general rubbish collector, living off the scraps of the family. The sow was also a safe financial investment for Irish housewives as, unlike cattle, the sow could be fed for almost nothing and, no matter what the market conditions, could always be sold for something.

The economics of small-time pig keeping were simple and profitable. As long as there were scraps of potatoes, carrots, turnips and the like, the pig could be fattened and eventually sold for profit. Where there were people, there were pigs and where there were pigs, there was profit.

Ironically, urban rather than rural Ireland became the key breeding ground. Every urban centre had its piggery and Dublin city centre was the biggest pig breeding ground of all. The pig man and his cart were regular sights in Dublin’s streets until the 1960s, gathering slops for their pigs. The pig, man and his rubbish lived in relative harmony in Dublin for hundreds of years, ensuring that at one level at least, both urban and rural Ireland had some feeling for agriculture.

This all changed when someone (probably an economist) spotted the nice turn that could be made by feeding slops or swill to pigs, and considered farming pigs intensively. Why not export the bacon and avail of the EEC’s guaranteed prices?

Almost overnight, intensive pig farming mushroomed and the urban pig, a permanent feature in settled Irish communities since the first farmers, was subsidised into extinction by the late 1970s. The link between urban Ireland and the farm animals was broken for good.

The historical relationship with farm animals and food was always very different in England. Following the great migration from land to cities during the industrial revolution, the cornerstone of English agricultural policy was to ensure the continuous supply of cheap food for the industrial workers. Policy was consumer-driven but arguably not quality driven, leading to an almost open-door import policy.

Ireland, with its large livestock rancher class, together with other parts of the empire (Australia and New Zealand) and the world (Argentina), fed the English manufacturing masses. Even up to the EEC accession in 1973, England was importing vast quantities of cheap food from afar and indeed one of the crucial factors in the British negotiations concerned special quotas for agricultural produce from the former colonies.

Britain’s open-door policy, governed by its quest for cheap food, has naturally made it more susceptible to imported diseases prevalent in Africa, the Caribbean and Asia.

This, together with the intensification of farming techniques evident in all developed countries and the rationalising of culling techniques (leading to bigger but more disperse abattoirs), has increased the risk of contagion in livestock.

In recent years, the quest for cheap food has become paramount, not just in Britain but all over Europe. The World Trade Organisation (WTO) has deemed that by 2007 global agriculture will be subject to the same rules as global manufacturing.

There will be no barriers, no protection, and no subsidies. In many ways, the historical English policy of cheap food at any cost will become the global standard.

However, the cheaper the output (food), the cheaper the input (food for the animals) has to be. When a farmer is faced with rising prices for grain (the traditional foodstuff for pigs) and falling pork prices due to international competition, he naturally turns to alternative foodstuffs. Cheap swill can often be that alternative.

It seems that the foot-and-mouth outbreak in England has been traced to cheap, unseparated (ie meat mixed with vegetables and roots) swill. According to the latest evidence, meat contaminated with foot-and-mouth disease from South African cattle made its way into the English food-chain via Britain’s open door food import policy. The meat was served in restaurants with no adverse effect on humans but the contaminated leftovers were sold to local farmers as pigswill. The pigs contracted the disease and it spread like wildfire to all cloven-hoofed beasts in the immediate areas. However, it didn’t stop there.

In recent years, the industry has come to be dominated by bigger and bigger operators with bigger and bigger abattoirs. Local abattoirs have closed down with the result that animals are being transported huge distances for slaughter. Infected sheep from the middle of England are being transported to Carlisle on the Scottish borders, spreading the contagion yet further.

Given the ability of this disease to spread and the fact that so many animals and people are on the move at any one time, it seems that only an act of divine providence can prevent it taking hold here.

Has the obsession with cheap food, brought about by free, unfettered competition, reached its limits? According to the WTO, it hasn’t. If its plan is carried out (and our government has signed up), by 2007 we will be importing warm-blooded animals from Asia, Africa and Eastern Europe as if they were cars: no checks, no barriers, no protection.

However, this crisis has shown that trading livestock is not like trading widgets. The more animals we pack together, feed together and move together, the more likely we are to import disease. It appears that the WTO prescription of free trade for all in agriculture may result in local diseases being global — a truly terrifying prospect.

The only logical way to prevent this is to turn the economics of agriculture on its head. Instead of thinking of food in global, anonymous terms, we should think of food in local, branded terms. If you want healthy food, you are going to want to know who makes it, to what standard and where.

This implies two obvious and huge changes in the years ahead: good food is going to become more expensive and more branded. Instead of going to the supermarket for a pound of steak and being offered the cheapest, which happens to come from Poland and has no distinctive characteristics, we are going to ask for Murphy’s steak please, knowing it is from Kilkenny and is a bit more expensive.

Over the coming years, Europeans are going to see a structural shift upwards in the price of food. It is not increased oil prices that we should be worried about.

After 20 years of deflation, we will see food price inflation as rich consumers refuse to take risks with their food and their health. After all, you wouldn’t fill your body with drugs for ailments without being reassured that the manufacturing process is well regulated, hygienic and professionally supervised.

Why take risks with food? As food constitutes a significant proportion of the CPI, expect inflation across Europe to rise. And, perhaps shares in Irish agribusiness stocks, which have fallen this week, are the buying opportunity of the decade.