Britain’s era of cheap food is gone forever with food prices forecast to remain high over the long term even as commodity prices moderate, according to a report from Chatham House, the London-based think-tank.

Recent declines in wheat and oil prices will not sharply reduce the cost of food because the underlying fundamentals driving food prices higher have not changed, it warns.

Kate Bailey, a senior researcher at Cardiff Business School and one of the co-authors of the report, Food Futures: Rethinking UK Strategy, says: “We will see a return to higher [food] prices.”

Long-term trends that will keep food prices high include: a rising global population that is eating more protein as it becomes more affluent; the food industry’s dependence on expensive energy sources such as oil and natural gas to produce and transport foodstuffs; and global shortages of agricultural land, water and rural labour.

The UK’s rejection of genetically modified crops means it is also dependent on expensive imports of non-GM animal feed when leading agricultural producers such as South America have switched to GM crops.

The report highlighted the UK’s reliance on imports – nearly half the country’s food is imported. This made it vulnerable to global food or commodity shortages caused by poor harvests or disease outbreaks. “The UK can no longer afford to take its food supply for granted . . . a food crisis in the UK is not unthinkable,” the think-tank said.

It called on the government to invest more money in agricultural research, including agricultural technology; to reopen the debate over GM technology; and to restructure supply chains to address environmental issues and develop longer-term relationships with suppliers.

Financial Times 2/2/09