Coronavirus: Cost increases eroding growers' confidence, report warns

Farmers and growers have warned over an increase in labour costs as a result of the Covid-19 crisis, leading to fears of an 'unviable' situation for many businesses.

The fresh produce sector has warned in a new report that cost increases were eroding confidence, risking an unsustainable situation for UK growers.

The report, by Andersons Centre, explained that the Covid-19 pandemic had resulted in a hike in labour costs by up to 15 percent.

Jointly funded by the NFU, British Apples and Pears, British Summer Fruits and British Growers Association, the report added the increases were in addition to a 34% rise in labour costs over the past five years.

And because of growers' low levels of confidence as a result of the pandemic, knock-on impacts on future planting decisions and the ability to make business investments were feared.

The report also highlighted the sector's concerns that this would leave the UK market at a competitive disadvantage to other countries.

There were five main categories in which growers’ employment costs had increased, the report explained, including worker availability and recruitment, training, accommodation, transport and logistics and operations.

Covid-19 had increased the costs of production for all fruit and vegetable growers, most significantly for the costs of employment, it added.

For many growers, employment was their single most significant cost, accounting for 40-70 percent of all costs.

NFU horticulture board chair, Ali Capper said the 'startling' figures demonstrated the challenges growers have faced during the Covid-19 crisis.

"On top of significant seasonal labour recruitment challenges, growers are seeing productivity levels decline, costs rise and returns from the market fall," she said.

"It will not be long before this becomes unviable for many farm businesses and they will have to significantly reduce or halt investment in their business.

"This would be an unforgivable situation for a sector that has been a real success story of British agriculture."

She added that home-grown fruit and vegetables had 'never been more important' to the British public amid Brexit and the Covid-19 pandemic.

Because of this, she said the industry should work together to share the risks and take the opportunities to 'grow more fresh produce at home, not less'.

"This sector is very ambitious to expand – growers need certainty, confidence and fair returns to make that investment," Ms Capper said.

“This report also provides yet another piece of crucial evidence that we can present in our engagement with government about how growers will be supported through these challenging times.”

Source: Farming UK