Resilience of the UK food system to Global Shocks (RUGS)

The ability of the global food systems to rebound from shocks and in particular the resilience of the UK food system is the focus of this project. Growing populations, changing diets (in response to income changes) and bioenergy are increasing pressures on the agricultural system globally to produce the commodities demanded. The location and intensity of food production is also changing, due to the globalisation of food supply and increasing international trade in agricultural commodities. Environmental considerations are also having an influence, both through climate change impacting crops and driving adaptation strategies, and through sustainability thresholds (e.g. water or deforestation). A progressively interconnected global food system, coupled with increasing demands and constraints, increases risks (i.e. reduces resilience) to global shocks. Events that shock supply or demand in one or more regions can affect the global market, and impact producers and consumers around the world. A notable example is the 2007/08 food price spike, as well as the continued price volatility.

To understand UK food resilience the global system needs to be considered, due to this interconnectedness. Even for commodities where domestic consumption is largely produced within the UK, global markets have a significant role in determining the UK market prices, e.g. recent milk price movements. Using stakeholder consultation the project will define a set of shock scenarios. These will then be simulated in a novel model of the global food system to assess the impact on food price for the average UK consumer, and the results then analysed to identify key messages for policy maker, the food supply chain, and the public.

A diverse set of shocks scenarios with the potential to impact UK food security will be developed. These will range from relatively business-as-usual scenarios, to more extreme events. A range of future climate and socio-economic scenarios (i.e. populations and incomes) will be used, both as scenarios in their own right and as context for some of the other shocks. For example, the shocks will include; variations in trade barriers, adjustments in dietary patterns, bioenergy demand, alternative rates of technological development, and geopolitical insecurities (e.g. war). They will be described qualitatively and quantitatively, including an assessment of uncertainty and likelihood.

The effect of the shocks will be evaluated by extending and using existing coupled models, development under a EU FP7 project (LUC4C). The model departs from the usual global economic optimisation approaches previously applied to agricultural systems, and offers a more detailed spatial representation of crop and pasture yields for a range of intensities, i.e. fertiliser and irrigation rates. The model also relaxes some of the more restrictive market assumptions. The model does not require market equilibrium and is able to represent non-economic governmental response behaviour, e.g. the imposition of trade barrier due to supply shortages. A further complexity is the two-way interaction between climate and the global food system. Climate change effects crop growing condition, the probabilities of extreme weather events, and will influences producer adaptation to changing conditions. But climate is also affected by land use, a substantial proportion of total anthropocentric carbon dioxide emissions are associated with land use change. To represent the feedbacks between land use and climate the project's model framework includes a coupled climate system model, vegetative model, and land use model.

Policymaker, industry and supply chain stakeholder interventions to potentially increase the resilience of the UK food system will be examined, based on the simulation results. The project will also consider the effect of market power, and the policy and regulatory environment in mitigating or increasing the UK food system's resilience.

The ability of the global food systems to rebound from shocks and in particular the resilience of the UK food system is the focus of this project. The global food system is changing driven by increasing demand for agricultural commodities due to rising population and dietary changes, e.g. greater meat consumption, and demand for bioenergy feedstock. A progressively interconnected global food system, coupled with increasingly binding environmental constraints and growing demands, creates systemic risks to global shocks, i.e. reduces resilience. Events that shock supply or demand in one or more regions can affect the global market, and impact consumers and producers around the world.

The project will, in collaboration with stakeholders, define a diverse set of shocks scenarios, and then simulate the impact of these using a novel model of the global food system. Compared to previous studies of the agricultural system this project will loosen the equilibrium market assumptions to better capture observed behaviours (e.g. non-equilibrium markets and governmental response behaviour), and will include a more accurate representation of spatial factors based on biophysical properties of yield, including the response to production intensification (i.e. fertilisation and irrigation). The impact of uncertainty will be assessed using a probabilistic approach (i.e. Monte Carlo). These advances will provide new insights into the dynamics of agricultural land use change, and the resilience of the UK food system.

The potential responses and actions applicable to industry, supply chain stakeholder, and policymakers, to increase the resilience of the UK food system will be considered, based on the model results. The project will also examine the effect of market power (i.e. the lack of supply chain competition), and the policy and regulatory environment in mitigating or increasing the UK food system's resilience.

The project deliverables will provide impact and societal benefits by understanding UK food system vulnerability to global shocks, and identifying actions and polices that can be implemented to increase resilience. Lack of resilience in the food system is likely to increase food costs and compromise the activities of food producers in the UK supply chain, and ultimately lead to increasing food insecurity. Volatility in food prices or supply caused by global shocks can have negative outcomes for the UK food supply chain, e.g. changes in global market prices can impact the viability of sectors and force rapid changes in food production and processing. This is currently occurring in the UK dairy sector, triggered by lower commodity prices. The changes have knock-on effects from producers and processors, through to the economies of local communities. High food prices can also damage society, as seen in the 2007/08 price spike, by increasing the share of incomes required to purchase food, or influencing consumption patterns towards less healthy diets, i.e. away from fresh produce, particularly in lower income households. The project therefore aims to deliver societal impact by facilitating the increase in the UK food systems resilience, and by collaborating with stakeholders to identify interventions that can achieve this outcome. Policies and private sector actions will be identified to increase resilience either by reducing the volatility experienced by the UK food system to global shocks (i.e. mitigation actions), or alternatively by limiting the negative consequences from the implied volatility (i.e. adaptation). Work package deliverables will initially define shock storylines that have the potential to impact the UK food system, and will then use a model simulation to quantify the outcomes, and therefore the severity of the impacts from these shocks, to better understand the vulnerabilities.

To achieve the desired outcomes stakeholder engagement is embedded into the design of the overall project. A stakeholder group will take an integral role of in co-evolving knowledge over the life of the project, as well as helping to define and adjust the research. The stakeholders will be selected to guarantee a balanced composition of members between different groups with an interest and relevance for UK food system. This ensures that stakeholders across public sector, private supply chain, and non-governmental organisations will be involved. The stakeholders will therefore be ideally placed to benefit from and apply the lessons from the research, and provide a strong and clear pathway to impact, in policy and commercial spheres, as well as the third sector. Stakeholders that would be relevant to the aims and outcomes of the project include policymakers (e.g. DEFRA, FSA, Scottish Government, DECC, DTI, BIS), agricultural producers (e.g. NFU, NFUS), environmental organisations (e.g. CCC, WWF), consumer groups (e.g. UK Food Group), food banks (e.g. Trussell Trust), retailers (e.g. Tesco, M&S), food processors (e.g. Arla, Müller Wiseman), energy companies (e.g. E.ON), insurers (e.g. Lloyds), banking and finance (e.g. Black Rock, RBS), and international bodies (e.g. FAO, IPCC).