The NFU is urging the government to listen to horticulture and farm businesses’ concerns over the new National Living Wage, which comes into force in April 2016.
An independent report from farm business consultants Andersons for the NFU exposes the danger of crop production moving abroad as unplanned and unprecedented wage rises are imposed on UK grower business over the next four years.
The modelling shows that horticultural businesses will be made uncompetitive and unprofitable within three to four years of NLW introduction.
NFU horticulture and potatoes vice chairman Ali Capper will be meeting farming minister George Eustice on Thursday to lobby for more time to implement the changes, as well as to argue that employers’ National Insurance contributions for seasonal workers are scrapped.
Ms Capper said: “The NFU is fully supportive of a living wage for all workers in the agricultural industry. But, we need government recognition that NLW will have a huge impact on this sector, particularly for labour-intensive crops such as hand-picked fruit and vegetables where labour costs can be as high as 70 per cent of turnover.
“We need help to mitigate some of the immediate impacts, or our businesses will fail. We are also urging the food supply chain and retailers to consider National Living Wage costs, so that British farm businesses can continue to supply high quality affordable food to British consumers. Our growers must have certainty that a margin over costs can be achieved.
“Research and innovation that reduces wage bills and increases productivity must be a priority for our sector. AHDB Horticulture has an obvious role to play in achieving this.”
The introduction of the National Living Wage will increase the cost of seasonal wages for grower businesses by 35 per cent over the period 2016-2021, equivalent to an average annual wage inflation of just under 7 per cent per year, significantly more than the 2.5 per cent annual rate of wage inflation growers reasonably expected to take place over the next few years.
The NFU publication, out on Thursday 10 December, includes six case studies and two reports.