Growers of fruit and vegetables in the UK have seen their labour costs rise by at least 34% since 2016, while farmgate prices have stayed virtually static. This is according to an independent report commissioned by the NFU by farm consultant Andersons.
The report examines the effect of rises in the national living wage (NLW) on the horticultural sector over the past five years. It argues that wage cost inflation is now a real threat to domestic production and UK growers need to be paid a fairer price for their produce to stop them quitting or relocating abroad.
The report shows the increase in the statutory hourly rate for workers aged 25 years and over has been just over 34% between 2015 and 2020, rising from £6.50/hour to £8.72/hour over that period. Yet it estimates many growers have actually seen a 40-50% rise in employment costs over the past five years because of productivity losses caused by a reduction in the volume and quality of labour following Brexit and the weakening of sterling.
For labour-intensive crops, it suggests a farmgate price increase of between 9% and 19% is needed simply to offset the increase in the NLW hourly rate. These crops include blueberries, raspberries, strawberries, apples, pears, lettuce, cauliflower, broccoli and leeks.
Photo source: Dreamstime.com