Written evidence submitted by Cucumber Growers Association (LS0006)
EFRA Select Committee Call for Evidence- Cucumber Growers Association
What is the extent and nature of labour shortages currently being experienced in the food supply chain?
Following the combined impact of Brexit and pandemic restrictions the industry is facing a level of shortages never seen before with members regularly reporting up to 40% of permanent roles remaining unfilled and retention rates as low as 50%. Members are ‘managing’ the shortfalls through temporary labour and continuous recruitment although the situation becomes ever more difficult as alternative industries are squeezed of labour and react to their own shortfalls. Some of our members have abandoned crops this year due to lack of labour.
What are the factors driving labour shortages in the food supply chain?
Brexit and the restrictions of free movement, thus meaning the labour pool has been drastically cut. The Seasonal Workers Pilot Scheme has helped some of this however the 6-month visa scheme is too short as workers can be required throughout the year, peaking between March to October. The Covid pandemic with workers still being on furlough and self-isolating. Increased competition from industries with margins that can pay higher wages. Our sector cannot compete with this due to the work being seasonal and under much lower margins compared to organisations such as Amazon. Low/ Zero unemployment as those that are out of work are not suitable to work in our industry.
What is the outlook for the labour shortage situation in the coming months and years?
Labour shortages will reduce for the remainder of this year due to production finishing. If nothing is done, and the labour market continues to be as competitive and tight then shortages will only continue to be exacerbated next year, and it will result in many of our members reducing production or stopping all together, unless something is done by this government.
What other issues are affecting the food supply chain?
Energy and Transport are two major issues. Extreme rise in wholesale gas prices which is used to heat the greenhouse crops and provide CO2 which are both critical factors in growing and achieving the yields required to survive in the modern industry. This area of our members business’s typically accounts for up to 30% of operational costs and has seen a 300% increase from a pre-pandemic base level. Many of our members cannot sustain this, and as a result will not be able to plant crops in Q1 of 2022. This will result in food shortages and increased imports.
Transport availability, reliability, and costs. Transport is an area more widely publicised due to its impact throughout the supply chain. The horticultural industry is no less impacted than other areas of the UK economy. Some of our members are being quoted 20% increases in transport prices for the 2022 season.
What impact will the timetable for introducing physical checks at the border on food and live animal imports from the EU have on the current issues being experienced by the UK food supply chain?
Transports will be further hampered and increase costs. Lead times will be increased and as a result damage to plants and food coming into the UK will be increased.
What measures has the Government taken to alleviate the problems being faced by the food supply chain this year? To what extent have they been successful?
The increased numbers in the Seasonal Workers Pilot Scheme (SWP) have been hugely helpful to accounting for some of the shortfall. Without these workers many more businesses would have had to abandon crops. However, as discussed above the SWP needs to be increased in visa length, and visa numbers.
Does the Government need to take further steps to support the food supply chain?
Firstly, we need to see an increase in the numbers and length of the seasonal workers pilot scheme. This is the only way we can compete and continue to harvest our food against more profitable industries. Secondly, the government needs to find a solution to the energy crisis and the quadrupling in the cost of gas in the last few months. Energy and Labour account for nearly 60% of our members costs. If nothing is done on these two areas alone more growers will have to cease production, and the reliance on imports will only increase. In the short term, this could be through government backed loans until the market levels out. In the long term, the government needs to consider reviving the RHI Scheme, and giving greater incentives for our members to switch to renewable forms of energy such as biomass and heat pumps. Thirdly, the HGV driver shortages need to be addressed by increasing incentives to train as a HGV driver and to speed up the process of ensuring licences and training is given as swiftly as possible, however in the short term (6-12 months) an increase in the new VISA scheme for European drivers would be welcomed and supported. Whilst we write to highlight the situation of our UK growers the same challenges can be seen in our European counterparts and the wider industry who all face similar challenges, there is a very real possibility of food shortages in some areas early 2022 if no corrective actions are taken to support growers and farmers before the opportunity is lost.