Economic analysis of the costs imposed by the UK food system

For an economic analysis of the costs imposed by the UK food system see Pretty J.N, Ball A.S, Lang T and, Morison J.I.L. (2005) Farm costs and food miles: An assessment of the full cost of the UK weekly food basket, Food Policy 30.

This study analyses the full (including external) costs of foods in the average weekly UK food basket by calculating the costs arising at different stages from farms to consumers' plates.

Of the 12 commodities assessed, livestock produce contributes the greatest costs per kg. The external cost of UK agriculture up to the farm gate is estimated to be £1.51 bn/yr; it is calculated that a switch to organic production could lead to avoided costs of £1.13 bn/yr.

It finds that agricultural and food produce accounts for 28% of goods transported on UK roads, currently imposing estimated external costs of £2.35 bn/yr. Road transport to carry food from the shop to home is estimated to impose a further £1.28 bn/yr to total external costs. Subsidies not targeted at environmental improvements cost consumers £2.88 bn/yr. Thus the real cost of the per capita UK food basket (£24.79) is calculated to be £2.91 more per person/wk (11.8%) if externalities and subsidies are included, with farm externalities, domestic road transport, government subsidies and shopping transport contributing the most.

The paper assesses a variety of scenarios for adoption of organic farming, localised food systems and sustainable transport to indicate the substantial potential to reduce environmental costs in the UK food system.