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National Living Wage could 'export UK horticulture industry'

The UK horticulture sector is facing a potential labour crisis as shortages of migrant labour and the debilitating costs of the National Living wage pose a threat to UK fruit and veg businesses, the NFU has warned.
Growers are under pressure from a shortage of seasonal labour following the end of the SAWS scheme
Growers are under pressure from a shortage of seasonal labour following the end of the SAWS scheme

UK horticulture production will be exported to the EU and northern Africa unless steps are taken to address a growing labour crisis facing the sector, NFU president Meurig Raymond has warned.

 

Growers are under pressure from a shortage of seasonal labour following the ending of the Seasonal Agriculture Workers Scheme (SAWS) in 2013 and the debilitating effect of the National Living Wage (NLW), which came into force this month.

 

A survey of 289 NFU horticulture members employing nearly 14,000 seasonal workers showed 29 per cent experienced problems sourcing an adequate supply of seasonal workers in 2015.

 

In addition:

 


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  • 66 per cent envisage reductions in labour availability by 2018.
  • 43 per cent believe this will result in their business experiencing labour shortages.
  • 53 per cent expect an increase in labour costs this year, rising to 84 per cent by 2018.

New NFU horticulture board chairman Ali Capper described the results as ‘very scary’.

 

She said: “We hope the Government is listening. We do not want to see fruit and veg unpicked because we cannot get the labour to do it.”

 

She said the NLW, which started this month, effectively equated to a 7 per cent year-on-year increase for the next five years when it would otherwise have been ‘2-2.5 per cent’.

 

Turnover

 

“The reason it hurts so much in the fruit and veg sector is wages often account for 40-70 per cent of turnover,” she said.

 

She said the board’s ‘top priority’ was to mitigate the impact for members, including:

 

  • Lobbying the Home Office for the introduction of a new scheme open to agricultural students from all over the world to undertake seasonal harvest work.
  • Seeking an exemption from the Treasury for seasonal workers in agricultural businesses from payment of employers’ National Insurance.
  • Asking the Department for Work and Pensions to exempt growers from auto enrolment of pensions for seasonal workers.

Ms Capper said it was 'bonkers' growers were having to auto-enrol seasonal workers for pensions.

 

She revealed one soft grower she had spoken to had contributed £2,000 in pensions for seasonal workers since he had auto-enrolled two years ago. Yet the scheme had cost him £45,000 to administer.

 

“I can’t over-emphasise the effort and paperwork that goes into it,” she said.

 

Ms Capper welcomed the support of growers who had contacted their MPs to lobby on these issues but expressed 'frustration' Defra was not providing the same support within Government.

 

Ms Capper, who farms on the Herefordshire-Worcestershire border, said the UK was already the second most expensive place in Europe to grow horticulture crops and 'one of the most expensive in the world.

 

She described how some growers in her region were responding to the situation by buying farms in Portugal where labour was less than half the cost, rather than seek to expand in the UK.

 

Export the industry

 

Mr Raymond said the NLW was also affecting the rest of the supply chain, including pack houses and retailers.

 

“It is vital we secure these measures to mitigate the costs of the Living Wage.

 

"If we are not careful we will export our horticulture industry to southern Europe and north Africa as big businesses uproot and leave the UK,” he said.

 

“Horticulture contributes £3 billion to the UK’s economy and employs around 37,000 people in England alone. However, a further 40,819 seasonal workers are needed every year in England to help grow, harvest and pack the produce.

 

"Harvest seasons with insufficient seasonal labour lead to British crops remaining unpicked, businesses facing massive losses and retailers being forced to fill shelves with imported produce."


He said a new student scheme would 'help avoid labour shortages and the potential consequences of higher food prices, increased imports and loss of full time jobs that seasonal work supports'

 

 

  • The NFU was due to launch a new report on Thursday, setting out 34 recommendations for increasing the consumption of fruit and vegetables while helping to reverse the current obesity crisis and addressing concerns over public health.

 

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