Written evidence submitted by Fermanagh and Omagh District Council (LS0014)
Environment, Food and Rural Affairs Select Committee
Labour Shortages in the Food and Farming Service Areas
Evidence from Fermanagh and Omagh District Council
Fermanagh and Omagh District Council welcomes the opportunity to provide evidence to the Environment, Food and Rural Affairs Select Committee in respect of “Labour Shortages in the Food and Farming sectors”.
The Fermanagh and Omagh District spans approximately 3,000 km2 and is home to 117,300 people. The district is the largest in Northern Ireland in terms of land mass and the smallest in terms of population, with a population density of 41 people per km2.
Fermanagh and Omagh is primarily rural; only 30% of the population live in the two main towns of Enniskillen and Omagh. A further 7% live in the local towns of Carrickmore, Dromore, Fintona, Irvinestown and Lisnaskea. The 48 villages and small settlements account for a further 16% of the population, with 47% of people living in open countryside.
Please see below the Council’s response to the seven questions.
Over 20% of NI’s agriculture sector is based in the Fermanagh and Omagh district, the largest share of all the 11 Councils in NI. The table below sets out the importance of the agricultural sector to the Fermanagh and Omagh district. Agriculture is the backbone of our rural area and communities. The current labour shortages present a direct challenge to maintaining and sustaining local farm businesses which, consequently, impacts on the district’s rural hinterlands and communities across Fermanagh and Omagh.
Table 1 Farm Overview
Source: DAERA Farm Census 2020
Fermanagh and Omagh accounts for 20% of NI’s land mass, 6% of the population, 11% of all businesses and 20% of farms.
The number of jobs categorised as ‘agricultural labour’, which covers self-employed farmers, spouses, family labour and farm hands, has been increasing in Fermanagh and Omagh over the past 7 years. Whilst this appears positive for the industry, industry contacts indicate that labour supply has been drying up, and there are usually a limited number of employees with the skills and willingness to work in this particular sector. Evidence suggests that vacancies are becoming harder to fill, however, due to the challenging economic circumstances there may be a reluctance to create and fill posts within the agriculture sector at this time. Indeed, it is the case that many of our local family farms are dependent for their survival on the unpaid labour provided by family members.
Our industry partners on the Council’s Agricultural Liaison Group, ie, the Ulster Farmers’ Union (UFU) and Northern Ireland Agricultural Producers’ Association (NIAPA), in describing the immediate challenges for the agriculture sector around accessing labour, have alluded to the impact this has on business performance, sustainability and survival; and on the wellbeing of business owners/farm family members due to the need to work harder and longer every day, 7 days a week.
In respect of agri-food businesses, in particular food processing entities, business owners have highlighted that, while the same number of animals are being directed to their facilities to be processed, they don’t have the required employee resource to undertake the processing duties. The reduction in the required employee numbers has led to reductions to 80-85% capacity in some settings and in one large scale processor locally, production has been reduced to 4 days per week. The challenges in respect of reducing employee numbers can be seen to run parallel to EU Exit and the associated inability to maintain and attract skilled foreign national workers. The Council would also point to the low level of wages paid within the food processing industry and the associated failure to attract local people to take up positions in the industry.
The Table below illustrates employment by Country of Birth and employed in Fermanagh and Omagh District Council area.
Table 2 Employment by Country of Birth, Fermanagh and Omagh, 2011
Source: Census 2011
This supports the well-known trait that manufacturing is more dependent on labour from across the EU than other sectors.
It is the Council’s view that the labour shortages are due to:
(i) In the Agricultural context - the overall reduced number of workers within local labour pools and the fact that the sector is less attractive due to the long hours/days, physical nature of aspects of the farm work and the inability for the farm businesses, in comparison to other sectors, to pay competitive wages. This is due to farms themselves being financially challenged as a result of increased input costs (labour, production, capital, food and energy costs, fertilisers) and ever reducing output income because of profit margins achieved by processors and supermarkets; and
(ii) In the Agri-food manufacturing sector – due to the loss of skilled foreign national workers brought about by EuExit and associated concerns around the EU Settlement Scheme. Alongside this, the low level of wages offered by the sector is not an incentive to local job applicants and must be improved. Members have also cited the structural issues in terms of the food processing sector and the need to offer guaranteed gate prices to producers.
The Council would request that it should be noted that the Hospitality and Tourism Sector within Fermanagh and Omagh is also experiencing labour shortages, partly due to the reduction of foreign national workers as a result of EU Exit, and also due to the level of wages provided. While this situation was offset for a time by the availability of students to take on part-time roles, this has been exacerbated by the return of students to College/University Campuses.
The data below are sourced from the Department for Communities vacancy statistics. Chart A refers to the number of notified vacancies in the agriculture sector and the manufacturing sector in NI The trends are opposite, with the number of vacancies in agriculture on a downward trajectory (albeit with very low numbers). Conversely, the number of vacancies in the manufacturing sector – the entire sector and not specifically food manufacturing – is on an upward trend, with a particular spike in the latest quarter.
Source: DfC Vacancy Statistics
There are two Jobs and Benefits Office (J&BO) located in Fermanagh and Omagh -one in Enniskillen and one in Omagh. Whilst these are not perfect representations of vacancies in the district, they are a suitable proxy. The impact of Covid-19 throughout the 2020/21 year is noticeable, with a noticeable spike to peak levels – above previous long-term trends – noticeable in Q1 2021.
Source: DfC Vacancy Statistics
Local statistical data flags up that 45% of those employed in agriculture (and associated sectors) are aged 50 years or older. This evidence demonstrates that the sector is not attracting new and younger employees. This does not bode well for the long-term sustainability of these sectors. This will inevitably lead to farms being unsustainable and likely to be lost, reducing rural employment and having a detrimental impact on the sustainability of village and rural communities. This situation increases the demands on farmers and farm family members and will have an even greater impact on their wellbeing (mental and physical). There is an immediate need for Government to commit to a sustainable approach to investing in the agriculture industry to ensure the security of food supply into the future, attract young farmers to stay within the sector, to invest in local farm businesses and to ensure that farmers and farm workers receive a fair return for their efforts.
Within the agri-food sector, the loss of access to workers to the sector will, in some cases, lead to the reduction in the capacity to process animals from farms. In the short term, this may lead to animals being slaughtered, but unable to be processed, with a financial loss to the agri-food sector and the farm producing the animal. The Council is extremely concerned at the situation whereby high-quality local produce may be lost to our food chain/supply due to failures in the processing sector. In the medium term, with reduced capacity, the agricultural sector will be forced to reduce the number of animals on farms, leading to reduced profitability, reduced local food supply and the consequences of this, potentially increasing the costs to the consumer.
The Council has continued to highlight its concerns arising from the impacts of EU Exit which has created huge uncertainty within the agriculture industry as to the UK’s approach post CAP and what this will mean for individual farm busineses. In such an uncertain environment, it is impossible for farm businesses to plan for the longer term and to commit to investment decisions. The UK Government’s ongoing approach to trade deals beyond the EU and the concerns that this may lead to an influx of inferior, cheaper food produce continue to be highlighted by the farming sector as a significant risk to sustainability.
Within agriculture, as set out in Q3 above, farms themselves are financially challenged, brought about by increased input costs (labour, production, capital, energy and food costs, fertilisers) and ever reducing income because of profit margins of processors and supermarkets.
The agri-food sector as with agriculture has increased input costs (labour, production, capital and energy costs) and output incomes are being challenged by the demand from the consumer of cheap food product.
At this time, we are nine months post EU Exit, the agricultural and agri-food sectors are indicating various challenges, with movement more difficult from East to West. This has directly impacted on supply chains and on animal movements.
The Council’s Agricultural Liaison Group has been in communication with both DEFRA and DAERA on the need for a Veterinary Agreement between the UK and EU.
The Council has welcomed the interventions made by the Department for Agriculture, Environment and Rural Affairs (DAERA) in the agricultural sectors of sheep, pigs, poultry and potatoes in NI which have been affected by a range of factors and, in some cases, the closure of the tourism and hospitality sector. While these interventions were responsive, these were short term schemes and the Council would suggest that the schemes need to be continued, to help mitigate the ongoing challenges set out above.
Again, the Council welcomed the Covid-19 interventions that have supported agri-food businesses and the wide gambit of businesses within the district. These interventions have helped keep workers safe and help provide a limited mitigation on the ongoing challenges of this set sector set out above.
In terms of the Agricultural sector, there is an urgent need for clarity on the policy proposals to support the sector beyond this Parliament and beyond CAP to provide businesses with a level of certainty which will support longer-term business planning. Government should consider increasing the single farm payment to help mitigate the increased input costs and ensure the sustainability of the sector. In addition, farms in Fermanagh and Omagh are within Less Favoured Areas (LFAs) which creates additional challenges in terms of sustainability. The reinstatement of ANC payments would put farms on a more sustainable footing, particularly in the current volatile environment.
Alongside this, there is a real opportunity for Government to take an innovative approach which recognises and harnesses the role farmers can play in addressing climate change and supporting the move to achievement of carbon reduction targets. As custodians of our local and natural heritage, farmers are in a unique position to deliver real, innovative and lasting change but this can only be achieved through a partnership approach with Government and the introduction of policies and policy supports to underpin the sustainability of farm businesses.
Government should consider a legislative mechanism that will allow foreign national labour (both skilled and unskilled) easy and quick access to areas of labour demand including in agriculture, agri-food and hospitality/tourism and, alongside this, to ensure the payment of a real living wage to all, whether that be indigenous or migrant labour.
The Council wishes to acknowledge the commencement of the DAERA Northern Ireland Food Strategy Framework – Food at the Heart of Our Society. Contained within the Framework is the consideration of sustainable food systems through an innovative approach and includes thinking on a food system that is profitable (delivering economic sustainability). It is suggested by the Council that this approach needs to take cognisance of the labour shortages within the food supply chain.
Fermanagh and Omagh District Council welcomes the opportunity to provide evidence to the Environment, Food and Rural Affairs Select Committee. Further, the Council would welcome the opportunity for further discussion on the labour shortages that would help resolve this ever-increasing critical challenge to the district’s local agricultural and agri-food businesses.