[UK] Local Workforce Proves Costly For Farms

17 JUN 2020

Fruit and vegetable growers in the UK are dealing with both a steep increase in costs and the battle to keep local pickers, recruited after the coronavirus lockdown stopped their seasonal workforce from Eastern Europe arriving, Business Fast reports.

Peak picking season is coming to the UK and growers of crops from strawberries to asparagus spoke of their struggle as higher recruitment and labour costs remain unmatched by an increase in prices paid for their produce.

Ordinarily, fruit and vegetables are picked by the 70-80,000 primarily Eastern European migrant workers recruited in winter months, who travel to the UK during spring and return home at the end of the season.

But this year the COVID-19 pandemic hit just as picking season began and made travel impossible for many. The sudden worker shortage forced farmers to launch a hasty staffing drive for UK-based workers in April, the drive was backed by a government campaign. (Link via original reporting)

The recruitment struggle foreshadows potential problems the sector could face when the Brexit transition phase expires on December 31 and freedom of movement for EU citizens ends, if the UK does not make additional provisions for farmworkers from overseas.

Angus Davison - chairman of Haygrove, a Herefordshire-based berry growing group - said, “This is not a very profitable sector any more and we have had cost increases that are significant this year.”

According to the National Farmers Union, labour can account for up to 70 per cent of a farm’s costs.

Mr Davison generates an annual turnover of £25m from UK fruit sales. He said that productivity rates were significantly lower among many of the UK-based new recruits, adding that around a third of those taken on have left their jobs already.

“They are dropping like flies at the moment. It isn’t good,” he said. “If we can end the season with half of the recruits having been successful that will be a good result but I don’t take it for granted that we will.”

The drive for local recruitment has been comparatively successful. Tom Bradshaw - vice-president of the National Farmers’ Union - said between 20 and 30 per cent of pickers were British or UK residents, the figure was previously less than 1 per cent. But staff turnover has doubled since 2019.

Such staffing problems are additional cost pressures. Ali Capper - chair of the NFU’s horticulture and potatoes board - said the union was preparing its assessment of increases to share with supermarkets and the government.

Government data shows that, on average, horticulture farms made just £34,500 of profit from farming in the 2019-2018 financial year. According to FT calculations, if extra income from subsidies and non-farming activities is excluded this represents a net operating margin of 9.5 per cent. 

“We work in a very low margin environment where it is very difficult to get price increases. We have some of the most sophisticated retailers in the world and they are very powerful,” Ms Capper said.

Mr Davison said he would continue hiring UK-based workers but warned that ministers should not interpret the relative success of farms like his during the COVID-19 crisis as a sign the industry could survive with British labour alone.

From 2021, foreign workers will have to meet a minimum salary threshold of £25,600 to come to the UK. The threshold is considerably higher than the income of farm pickers, who tend to be paid a piece rate which is then, if necessary, topped up to the minimum or living wage.

This year a seasonal workers’ scheme let 10,000 temporary non-EU farmworkers in but farmers have said a far bigger scheme will be required once EU workers can no longer travel freely. The government said, “We are evaluating the pilot so we can see how it could meet the needs of farmers and growers.”

Source: Business Fast