15 November 1996

Project could be model for plugging food trade gap

By Philip Clarke

BRITAINs £6bn food trade deficit could be halved, if more businesses adopt the principles of the Strathclyde Food Project.

That was the claim of project chairman, Sir Alastair Grant, speaking to fw at last weeks final Strathclyde seminar in London.

Set up in 1991 with the objective of reducing the food trade gap, these principles included:

&#8226 Improving scale and efficiency in the domestic market to boost exports.

&#8226 More effective connections along the whole food chain.

&#8226 Reductions in the number of unnecessary middlemen.

Working parties were set up in seven sectors where the trade gap was deemed "substantial but reversible", and action plans developed to improve competitiveness.

"We set out with the aim of identifying and delivering an arbitrary £500m improvement in the food gap," said Sir Alastair. "Measuring that improvement has not been straightforward, but as far as we can judge, we have been the midwife to an improvement of at least £300m."

That is equivalent to a 5% cut in the food trade gap over five years. Some economists have suggested it would have happened anyway, given the boost to exports after sterlings 1992 exit from the exchange rate mechanism (ERM) and the subsequent devaluations.

But Susan Shaw of Strathclyde University, who directed the project, says that, while devaluation would have made imports less competitive, this was offset by falls in world commodity prices during the period.

A number of case studies were presented to the seminar, demonstrating the projects achievements. Malton Bacon, for example, had lifted exports from £21m to over £100m in three years. And Van Heyningham Bros in West Sussex had boosted tomato production, leading to a 30% fall in Dutch imports.

Sir Alastair believed that, while these companies would probably have succeeded anyway, the Strathclyde project had speeded things up. &#42

Safeway and Strathclyde chairman, Sir Alastair Grant, says the project has helped companies expand their exports

quicker.

Prof Susan Shaw, deputy principal of Strathclyde University,

says measuring the benefits of the project is not straight-forward.