Written evidence submitted by British Growers Association (LS0011)
Labour availability in the UK Fresh Produce Sector
The British Growers Association is a grower owned, grower led Association comprising a range of organisations operating in the UK horticulture industry and fresh produce sector. The membership includes Crop Associations, Producer Organisations and fresh produce marketing groups. We are in regular contact with a wide cross section of growers and over the past 18 months labour has been a major priority.
After the complications of 2020 and the impact of the pandemic, growers were expecting a more normal season in 2021. In reality, 2021 has been anything but normal. The pressures of operating through the lockdowns were replaced with a near ruinous mix of escalating costs, labour availability issues and lack of haulage.
In preparation for the 2021 season, growers were expecting the labour situation to change following the UK’s exit from the EU and the ending of freedom of movement. Growers planned their labour requirements based on a combination of settled and pre settled status applications coupled with an increase in the number of Seasonal Worker Pilot permits believing this would be sufficient to invest and plan for the 2021 season.
No one had foreseen how 2021 would actually work out. In practice the industry has seen a significant reduction in the numbers of staff with settled or pre settled status looking for work in the UK. In previous years these staff provide the back bone of the seasonal workforce. Many returned to the same farm year after year providing important continuity and much needed experience. This season the numbers returning have been lower that previous seasons due to the Covid quarantine restrictions, a sense of no longer being welcome here in the UK and opportunities in other parts of Europe where simpler quarantine regulations and more freedom to move about made offers of employment a more attractive proposition.
The increase in seasonal worker permits announced in December 2020 was welcomed by the industry but the management of the increase has not been entirely seamless. Setting up the two new operators took longer than anticipated and left them struggling to keep pace with grower demands at the height of the season.
A new factor for 2021 has been competition for staff. We have received reports of recruiters entering fields looking to poach staff to work in other sectors notably hospitality. It is hard to escape the fact that serving behind a bar is less physically demanding than harvesting crops and for some represents a more attractive proposition.
This competition for staff has led to something of a bidding frenzy as growers increased wage rates to hold on to staff to enable them to meet retailer commitments. And while better rates of pay are clearly a benefit in attracting staff, the margins in fresh produce - typically 1% – 2% leave little room for manoeuvre in meeting these increased wage rates. It must also be stated that increasing wage rates has not been sufficient to attract the numbers required. Businesses offering £250 per day are struggling to recruit enough staff.
The current shortages beg the question - How has the sector got to this situation? Historically the fresh produce sector has always relied on migrant labour. A century ago, people came from the East End of London to the orchards and hop gardens of Kent in search of a change of scenery and to earn extra money to supplement their regular employment. In 1947 the Seasonal Agricultural Workers Scheme was established to give overseas students a chance to come to the UK and work on agricultural holdings during their holidays. The scheme operated very successfully for 60+ years until it was scrapped in 2013 with the advent of freedom of movement within the EU.
Concurrent with duration of the SAW Scheme has been a gradual decline in interest from UK nationals to undertake what has to be accepted is physically demanding work and although for some the chance to work outside my seem like a bonus – this view is not universally accepted.
In more recent times the UK has experienced high levels of employment which has further exacerbated the shortage of UK nationals looking for fresh produce harvesting type roles. Coincidentally, a significant volume of our fresh produce is grown in the south east where competition for staff has been a constant refrain from companies across the economic spectrum. Conversely in Lincolnshire one of the challenges facing growers is recruiting staff from a relatively small population. In both cases it is possible to see why and how the industry’s reliance on overseas staff has increased in recent years and why the combination of settled and pre settled status staff leaving the UK together with intense competition from other industries has resulted in the current shortage.
There is a serious downside to the current shortage of staff in that it erodes grower confidence in investing for the future. We are already getting anecdotal evidence from growers who are planning to reduce their areas of fresh produce on the back of shortages in the current season and not wanting to see ‘expensive to grow’ crops unharvested in 2022.
This should be a golden era for the UK Fresh Produce sector. The UK currently runs a significant trade deficit in vegetables and fruit and our exit from the UK and the CAP offered the sector a great opportunity to meet the expanding consumer demand for these products. The recently published National Food Strategy identified UK fresh produce as the sector of primary food production where growth most squarely aligns with the national interest and where there are clear opportunities for UK growers to secure a greater share of the UK market. Fresh food provenance across the UK will dramatically reduce if labour availability is not addressed.
We need to move away from this ‘cat and mouse’ approach we seem to have with Government to the recruitment of staff for the sector. UK growers have and will continue to invest in the recruitment of UK nationals. There is significant investment in the use of robots and automation to reduce reliance on seasonal staff, but these things take time and the technology is in its infancy rather than in a ‘ready to go’ format. As and when the technology is available, we have no doubt the uptake by the sector will be swift and effective. But until that happens there is no obvious alternative to the use of staff and in the absence of recruits from the UK the only alternative is to look further afield.
In the past few days, there have been statements about industries being ‘drunk on cheap labour’. I think many growers who, together with their teams worked extremely hard during the pandemic to maintain fresh produce supplies, would be offended by this accusation. In most instances, seasonal workers are well rewarded and certainly don’t fall into the category of cheap labour.
It is also important to note that wage rates need to correspond with prices. Over the past few years, fresh produce prices have been relatively static despite the 23.75% increase in the National Living wage over the last 5 years (wage costs in fresh produce would be typically 30%+ and up to 45% of total production costs). For low margin businesses it is not sustainable for business owners to be expected to absorb year on year cost increases without be able to pass these on.
Our solution to the problem would be a comprehensive overview of the opportunities and challenges within the fresh produce sector. We know we are overly reliant on imported product and some of this production is sourced from parts of the world with lower environmental and employment standards. We know we need to increase our collective intake of fruit and vegetables. We have the skill, the expertise and climate to increase the UK growers share of the UK fresh produce market. But labour and labour availability are massively important issues facing growers when it comes to making investment decisions.
We should be treating this as an opportunity to be developed for the wider benefit of UK Plc. Industry and Government should be working together to find a lasting and sustainable solution rather than going from year to year with a growing sense of crisis.
There is nothing to be gained by restricting the growth and development of the UK fresh produce industry. We have talented people throughout the sector. There is willingness to invest and create good jobs and opportunities in rural areas. But in the absence of automated harvesting systems, (and this lack of automated harvesting is worldwide) there is no short term alternative to the employment of suitably trained staff.