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New immigration rules set to lower farmgate prices and increase production costs

Farmers are set to be hit with a double whammy of lower farmgate prices and higher costs of production as a result of the Government’s proposed immigration rules.

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New immigration rules set to lower farmgate prices and increase production costs

Under the new points-based system, anyone wanting to work in the UK would need a job offer with a salary of at least £25,600, though those taking up work in a profession where there was a skills shortage, as identified by the Migration Advisory Committee (MAC), could earn as little as £20,480.

 

This would mean farmers and those higher up the food supply chain having to pay their staff more, or invest in expensive and sometimes unproven automation processes, with low profit margins and at the same time direct payments are slashed.

 

Nick Allen, chief executive of the British Meat Processors Association, said the proposals risked making processing plants ‘unviable’.


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But he warned there was a more pressing danger processors would slash prices paid to farmers in an attempt to recoup their losses.

 

“There are a phenomenal number of people working away on the boning line, and if you find you have got to pay them £10,000 a year more, that has got to be recovered from somewhere,” he said.

 

“The likelihood is the cost probably goes back to the farm end, because consumers never seem to be the ones who pay more for these things.”

 

Mr Allen also suggested there was a real possibility plants struggling to hire enough staff would have to slow their operating speeds, leaving farmers facing the prospect of keeping animals for longer than expected, with all the associated cost and welfare issues that brings.

 

Fewer

 

In October last year, Tom Kirwan, managing director at ABP UK, told MPs on the Environment, Food and Rural Affairs Select Committee processors were already killing fewer animals because they did not have enough workers to debone meat.

 

The BMPA is now calling for butchers to be placed on the MAC’s Shortage Occupation List.

 

Richard Griffiths, chief executive of the British Poultry Council, claimed the plans, which are due to come into force in January 2021, risked putting poultry farmers out of business.

 

“Higher labour costs and investing in technology over 10 months instead of five years will increase the cost of production,” he said.

 

Less food security

 

“The knock-on effect is less food security for the UK, less affordable food and more difficulty in maintaining our standards because there will just not be the ability to produce.

 

“If we start losing capacity for production, it is not coming back.”

 

Home Secretary Priti Patel said the plans would bring overall migration numbers down while attracting the bright and best from around the globe.

 

Seasonal workers

 

The warnings about the new immigration rules came as the Government confirmed it would expand the Seasonal Agricultural Workers Pilot for the 2020 harvest, allowing 10,000 pickers to enter the UK, up from 2,500 last year.

 

Defra Secretary George Eustice said the expansion would help farmers with the labour they need while allowing future approaches to be tested further.

 

During his time on the backbenches between his resignation and reappointment, Mr Eustice told Farmers Guardian he wanted the scheme to have 20-30,000 places, and blamed ‘reticence’ in the Home Office for the small number of positions.

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