Dire strait

An already precarious agriculture and food sector could be tipped over the edge by the impact of the war in the Middle East, Unite has warned. Farmers and food producers could see already squeezed profit margins wiped out by rapidly rising costs and risk a crisis within the sector.

Paul Travers, Unite national officer for food, drink and agriculture (FDA) said the sector faced a ‘perfect storm’ of a squeeze on household spending, wafer thin profit margins and rapidly rising costs. “It’s not just soaring oil and gas prices, closure or disruption in the Strait of Hormuz hits across the sector, we’re already seeing the doubling of the cost of fertiliser and animal feed.

“Global supply chains rely on just in time deliveries and the seasons don’t change, they don’t wait for human created delays. There are key components for food production and packaging that are already disrupted and seeing rising costs.

“In the food chain from the fields to the plate, everyone is seeing profit margins at wafer thin levels. The exception are the large supermarket chains which are making huge profits, often by squeezing farmers and food manufacturers.

“This is not sustainable for very long. We risk, at some stage, that an already shaky house of cards comes crashing down, increasing job insecurity and putting jobs at risk.

“Government needs to urgently address what the big supermarkets are doing. There needs to be a more equitable approach, fairer rewards along the food supply chain, not just the supermarkets.

“What is currently happening is simply not sustainable for farming or food manufacturers. The global shock of the Middle East war could well be the tipping point for us in the UK.”

The alarms bells are already ringing. CEDARE, the Centre for Environment and Development for the Arab Region and Europe says the Strait of Hormuz is a ‘food-security chokepoint’…20 – 45 per cent of key agrifood inputs depend on passage through Hormuz and a prolonged disruption could trigger a global agrifood catastrophe, especially by constraining fertiliser access, raising energy costs, and pushing up food prices later in 2026 and into 2027.”

The World Bank is also raising wider concerns. Indermit Gill the World Bank Group’s chief economist gave this warning: “The war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally, higher inflation, which will push up interest rates and make debt even more expensive.

“The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest, as will developing economies already struggling under heavy debt burdens.” Economic growth will also be hit, he said.

The agricultural chain reaction is both complex and simple – shipping is disrupted, energy costs for farms and production spiral, up to 45 per cent of the world’s fertiliser components become disrupted or are in short supply and increase in cost, less fertiliser means lower crop yields in 2026 into 2027, leading to higher food price inflation and greater food insecurity.

In some parts of the world that means hunger, even famine. In the UK it means greater food insecurity, less availability of some products, higher prices and a further squeeze on households.

Current projections for UK inflation point to 6 per cent overall by the end of the year. But food and energy inflation are likely to be higher.

Steve Leniec, Unite agricultural sub-sector chair has seen the impact first hand. He has many years of experience working on mixed arable and pastoral farms.

“In terms of food security, the UK has now gone beyond critical. Global shocks like this latest one underlines the need to become more self-reliant and be less so on imports.

“Successive governments have let us drift into a ‘we can just rely on global supplies’ mindset. That is no longer a viable, reliable strategy.

“Instead we need to move to ensuring basic food security. That starts with taking on the supermarkets and paying realistic farm gate prices and buying British whenever possible.”

The thoughts are echoed by Monique Mosley, Unite FDA sector vice chair.

She says, “No one is saying don’t buy food that’s out of season in the UK. But we can make it easier to harvest and thus manufacture what we have in season.

“That means making life easier for those seasonal migrant workers employed when we can’t recruit locally. We could make existing seasonal visas transferrable between employers, for example and not being tied to only one.”

“No one is panicking but we need government to have a greater sense of urgency,” says Paul Travers. “No one really knows all of the impacts of the war or when it will end.”

The conflict’s impact and the closure of Hormuz will be felt well into 2027. Analysts warn a prolonged war could have the same economic shock as the Covid pandemic.

Much relies on how peace talks proceed and if they reach a conclusion. If a peace agreement isn’t reached, an uneasy ceasefire or sporadic military action would create uncertainty for years.

A worst case scenario is that more countries are drawn into the conflict. China’s leaders have, for example, made clear it won’t tolerate the US blocking trade to China, be it oil or other strategic supplies.

Uncertainty isn’t helped help by President Trump’s chaotic and disruptive approach. A war he said would last no more than four weeks is now well into its fifth month.

The peace process, when it exists, is chaotic, very much the Trump style. It creates deep uncertainties and a hopes rise/hopes fall news cycle, up and down with energy prices.

The International Energy Agency says the closure of the Strait and war damage to the regional, oil, gas and other infrastructure is the biggest disruption to energy markets in that agency’s history. One oil and gas market export set out a brief and ominous picture to Landworker.

“Details of the level of war damage to the oil and gas infrastructure is very sensitive” he said. “What we know is that key installations have been heavily damaged.

“Some of the damage to oil installations are possible to repair, if hostilities cease, in between six to nine months.

Capacity might be partially recovered by the end of the year.

“There is a lot of damage to ports in the region which could also be repaired relatively quickly. That isn’t the case with the Liquefied Natural Gas infrastructure.

“Fewer than 10 companies in the world can even build the equipment that has been destroyed. I’ve seen estimates that it will take 18 months to three years to fully repair the damage.”

Even if hostilities were ended entirely and very soon, the impact lingers.

In late March the International Monetary Fund (IMF) looked at what might be a less certain, more nervy peace. A grey zone between peace and full-on war.

“If the world may settle somewhere in between’, the IMF suggested then “tensions linger, energy stays costly, and inflation proves hard to tame – with ongoing uncertainty and geopolitical risk. Much depends on how long the conflict lasts, how far it spreads, and how much damage it inflicts on infrastructure and supply chains.”

It warned of lingering damage outside the region. “The interruption of crop-nutrient supplies from the Gulf comes just as planting season begins in the northern hemisphere, threatening yields and harvests through the year and pushing food prices higher.”

Back in the UK, in early April in her Mansion House speech in the City of London, then-Foreign Secretary Yvette Cooper calmly set out her own thoughts. A politician not known for over-statement said this, “It might be tempting, even comforting, to think that the Iran crisis is a once-in-a-generation shock.

But this is the third time in six years that international events have sent economic tidal waves around the globe, hitting Britain’s shores – the Covid pandemic, the invasion of Ukraine and now the Iran conflict.

“Instability and volatility are becoming increasingly chronic and turbulence is the new normal. The new reality we face did not begin with the war in Iran, nor will it end with a reopened Strait.”

By Duncan Milligan

This article first appeared in the latest edition of Landworker, Summer 2026, which you can read here.