Over the past six months the price of a dozen free range eggs has risen by 60p and a 2.5kg bag of humble potatoes by around 50p, while a basic loaf will now set you back in the region of 80p.

Food prices are being driven up by low global stocks of commodities such as wheat, rising fuel prices and steadily growing consumer demand from India, China and Russia.

Wheat is an important crop for the region's farmers. Traded on the world market, recent imbalances between supply and demand have seen the price soar. Back in 2006 Grantham farmers typically received up to £75/tonne for bread making wheat – making little profit. Over a year later and the same farmers are receiving around £145/tonne.

Most food is influenced in one or more ways by oil prices. For many processed products, such as ice cream, the fuel required to make, pack, transport and chill the product can eclipse the cost of the raw ingredients.

After many challenging years, with this recent food price inflation some farmers are seeing a welcomed improvement in prices paid for their produce. However, escalating fuel, chemical and labour costs are in many cases eroding a large proportion of the gains.

'Food price inflation and its effects on farming businesses' is the topical subject of an informal drop-in event for Lincolnshire farmers on February 20 at Kenwick Park Hotel, in Louth.

No doubt the new Rural Development Programme for England grants will be high on the agenda. Last month the East Midlands Development Agency (emda) announced a new £60 million package of grant funding for farming and other land based businesses in this region. Great news for the local economy, grants are available towards diversification projects, as well as for collaborative approaches to develop new products.

Funding streams are in place to help farmers and growers take advantage of new market opportunities to add value to agricultural and horticultural products.

Returning to the cost of the weekly shop – consumers must brace themselves as the outlook is that prices are set to stay high. In the future more food producing land in the East Midlands will be lost due to house building and the production of energy crops.

However, the price of food in Grantham shopping baskets is largely being affected by forces at work across the globe - rising production and distribution costing, coupled with growing demand for essential ingredients from an expanding world population.

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