Rose Prince: Yes, you'll save money at the checkout. But, you'll pay, dear shopper, you'll pay

How easy it is to be a complacent shopper. Sainsbury, Asda and Morrisons are circling the sick supermarket giant, Safeway, and we consumers look on, confident that the impact of any "market consolidation" or merger will be benign, making the price of food much cheaper. Bargain hunters, rejoice!

Such a takeover may well appear to make food more of a bargain. But there is a price to be paid for the inevitable increase in supermarket buying-power, both by consumers and our fragile home food industry. It will be grief for British farmers when the supergiant's new-found clout squeezes their margins.

We might as consumers enjoy supermarkets' low prices, but there is no country in the world where food is more expensive to produce. The regulatory regime in this country, be it health and safety, hygiene, rules governing animal welfare or waste disposal, is the toughest in Europe. The cost of that regime falls on those that grow or process food and it is disproportionately high for the smaller producer.

Of course, there is an upside: we produce the safest food in Europe. Our fresh foods, meat, poultry and dairy, are enjoying a renaissance. Decades of scandals in food production and animal husbandry – think BSE, e.coli 0157 outbreaks, the effects of antibiotic-fed animals on the human immune system – have forced the industry to clean up its act. But supermarkets do not give a stuff about top quality home-produced food.

They squeeze producers until they barely make a profit. They get away with it because the big four – Tesco, Sainsbury, Asda and Safeway – control 70 per cent of the market. They claim to do it on our behalf, so that we can have our food on the cheap, and we are duped into the philosophy that if food is cheap, society benefits. But it is a short-sighted belief. There is only one philosophy to hold on to with food: you get what you pay for. And we're not paying enough to get the best.

Supermarkets perform a service as important to society as banks or railway companies, yet they escape regulation or even an ombudsman; good practice is purely voluntary. With so few players in the field, the margins between what they pay suppliers and retail prices remain a closely guarded secret. A Competition Commission investigation in 2002 failed to unearth details of their exact working practices because suppliers giving evidence against them, fearing a loss of business, insisted on remaining anonymous.

The latest missed opportunity to regulate the big four came in December when the Government announced its plan for the future of food and farming. While there are dozens of new measures affecting farmers' working practice, the sole reference to the giant retailers was a paragraph politely asking them to follow a voluntary code of practice when dealing with suppliers. Not for nothing have supermarket bosses cuddled up to power.

There is a real risk of losing critically important sectors of British industry. Many dairy and cereal farmers, beef producers, market gardeners and hill farmers, not forgetting organic farmers, will chuck it all in because they see no viable future.

If that happens, then much more of our food will be imported. (I often wonder what plans have been put in place to feed the nation in the event of war.) Many countries lag years behind us on every issue: animal welfare, hygiene, pesticide control, inspection for disease. BSE in European countries goes unreported, yet our beef is inspected in detail at huge cost to the meat suppliers. Pigs in Europe barely see the light of day while more than 40 per cent of ours are free-range; European veal is still reared alone in the dark, ours herd together on deep straw in daylight. The pesticide-reduction plan in Britain is way ahead of the rest of the world; we vaccinate almost all our hens against salmonella. Other EU states do not.

Less control over imports carries increased risk of disease. Another foot and mouth outbreak will finish the ailing rural economy. The tourist trade would be devastated. And for the shopper, good food – food of the highest quality, from producers you can really trust – will be but a dream. The thin façade of concern for the customer and the community will finally be seen for what it is.