Labour crisis takes its toll on profit margins

Increased wages are doing little to solve the food and farming sector’s labour crisis, with the fallout from Brexit and Covid-19 both weighing heavy.

Growers have warned of supply shortages if crops are left unpicked or are unable to be packaged and processed, while meat processors said the sector was in serious danger of collapse when the workload increases this autumn. Competition for workers is so high that some firms have raised hourly wages by 5 per cent and companies such as West Sussex vegetable specialist Barfoots of Botley have promised a £600 bonus if workers stay for 12 weeks this summer. But Ali Capper, NFU horticulture and potatoes board chair, said wage rises were not the solution. "We need an immigration policy that is fit for purpose and while our sector is lucky in that we have the permit scheme, it is not bringing us enough people and I can only see the EU picture getting worse," she said, calling on the Government to make the Seasonal Agricultural Workers pilot scheme permanent to instil grower confidence. "Anxiety levels are at the highest I have ever known them, and the lack of labour could decimate our industry as growers will not plan to produce the same volumes in the future to mitigate this risk." The British Growers Association said margins were already being squeezed, with employers investing in ‘very necessary and important’ regulations to keep staff safe from the virus.

Covid-19 illnesses, isolation rules and travel restrictions have compounded an already tight situation, with many workers who returned to their home countries during the final weeks of the Brexit process not showing any signs of returning and new immigration rules which no longer permit freedom of movement for EU nationals.

The Scottish Association of Meat Wholesalers (SAMW) said its members, who process the vast majority of the country’s red meat, were currently facing a 10-15 percent shortfall in staff.

A SAMW spokesman said: “The UK Government is responsible for ensuring there is sufficient food for the nation and that responsibility is in serious danger of collapse later this year.

“Members are just about managing to meet current demands for meat but this is a relatively quiet time of the year."

There is a cross-industry call on the Government to relax the restrictions on foreign workers, with one option a short term visa which would allow EU workers to be employed in the UK for a set period of time.

Speaking to Farmers Guardian at the Great Yorkshire Show on Wednesday (July 14), Defra Secretary George Eustice said: "We are discussing across the Government at the moment what we might do next year and whether there should be a further extension of the SAWS pilot or whether indeed we should try to do a more permanent scheme but we are not in a position yet to make any final decisions."

Source: FG Insight