COVID-19 adds up to 15% on labour costs, new report shows

Lee Thomas

Britain’s fresh produce industry is warning that cost increases are eroding confidence and risks leaving growers in an unsustainable situation, as a new report shows that COVID-19 has resulted in labour costs increasing by up to 15%.

The report by Andersons and jointly funded by the NFU, British Apples and Pears, British Summer Fruits and British Growers Association, shows that these increases are in addition to a 34% rise in labour costs over the past five years.

As confidence in the supply chain among fruit and vegetable growers takes a hit, it will have knock-on impacts on future planting decisions and their ability to invest in the future of their businesses. There are also concerns that this will leave the UK market at a competitive disadvantage to other countries.

Everyone in the supply chain, including retailers and buyers, is being urged to work with their supplier base to discuss these issues and how the supply chain can deliver fair returns to growers.

The Potential Implications of COVID-19 for the Costs of Production of UK Fruit and Vegetables in 2020: Summary of findings

  • There are five main categories in which growers’ employment costs have increased:
    • Worker availability and recruitment
    • Training
    • Accommodation
    • Transport and logistics
    • Operations
  • COVID-19 has increased the costs of production for all fruit and vegetable growers, most significantly for the costs of employment.
  • For many growers, employment is their single most significant cost, accounting for 40-70% of all costs.

Read the report in full, here.

NFU horticulture board chair Ali Capper said: “These startling figures demonstrate 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. 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.

“Home-grown fruit and vegetables has never been more important to the British public; providing an ample supply of healthy, nutritious food at a time when we know we should be eating more of it."

"As an industry, from the farmgate to the retailer, we should be working 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.

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

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