The national living wage (NLW) could make many horticulture businesses completely unprofitable within just three years, according to a study into the effects of the wage rise on agriculture.
The independent report by Andersons, commissioned by the NFU, concludes that the rise in employment costs resulting from the introduction of the NLW will be a huge problem to the sector.
The union will use the report to show buyers they will need to absorb some of the extra costs and to lobby government to delay the introduction of the new arrangements to allow the industry time to adapt.
The national living wage will be introduced in April 2016 and apply to workers aged 25 and over. The initial rate will be £7.20/hr but it is predicted to rise to around £9.35/hour by 2020.
The NFU also wants to see the reintroduction of a seasonal agricultural workers scheme for student workers from around the world.
The six key issues for the horticulture sector relating to the NLW are identified as:
1. Labour is a massive part of total costs
2. Reducing labour in the short-term is not viable
3. Profit levels are already low
4. The wage increase is unprecedented
5. Employers’ national insurance costs compound the problem
6. Lower labour costs elsewhere in the world
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