It is that time of year again, when British crops are ripe for harvesting and food options on menus are full of seasonal home-grown produce.
But fears over spiralling fresh food prices have resurfaced as farmers struggle to find enough workers for the harvesting season.
It is well-documented that food prices have been increasing due to the weakness of sterling in the wake of the Brexit vote. But this latest threat is a major concern as it will not only cause problems for the farming community but could push up prices and have a significant knock-on effect on the pub sector.
According to reports, the situation has become so bad that some farmers have been forced to actively recruit by travelling to eastern Europe and, in the past, have even provided free flights to get the workers into the country.
Gauging what’s needed
The summer 2018 edition of the Lynx Purchasing Market Forecast says the farming industry has already been struggling to recruit enough seasonal workers and that fresh salad crops and summer berries could simply be “left in the fields”.
Rachel Dobson, managing director of Lynx Purchasing, says the situation is not just about Brexit but about the fact EU workers now have a wider range of employment options and many have seen wages increase in their own countries.
“Producers, and hopefully politicians, will be monitoring the situation this summer and autumn to gauge the extent of the support that needs to be in place for the next few years, during the interim Brexit period and probably beyond,” Dobson told The Morning Advertiser.
“While the UK has been part of the EU, the quick solution to any shortage of fresh produce has been to switch the supply chain to imports from countries such as Holland and Spain. Depending on the customs arrangements eventually agreed, that may not be as simple in future.”
She says the situation is not only affecting the agricultural sector, but the hospitality industry is also reliant on migrant labour.
“Above all, supply chains hate uncertainty, and operators will have to become more nimble when it comes to monitoring prices and switching suppliers to get the best deals in terms of cost, quality and availability,” she says,
Supply is tight
The National Farmers’ Union (NFU) says this is an ongoing issue but that recent weather has also changed the demand for workers. The wet and cold weather in the early part of the year caused the season to be delayed and farmers had to continue paying workers to retain them. The recent warm weather has boosted production, which means farms now need more workers to cope with demand.
“While more than 70% of seasonal workers are yet to arrive on farms for this year’s summer season, growers are already worried about the availability of workers for the busy harvest months,” says NFU horticulture and potatoes board chairman Ali Capper.
“Those who have got workers on farms already say supply is tight and that recruiters are struggling to attract workers for later in the year.”
The organisation says that, in the short-term, farmers and growers need an urgent solution from Government that allows them access to a competent and reliable workforce.
“The simplest measure would be a tried and tested seasonal agricultural workers scheme to allow workers from outside the EU to come and work on British farms,” says Capper.
The migrant worker issue is not a new one for the UK farming market. Earlier this year, the House of Commons Environment, Food and Rural Affairs Committee chairman Neil Parish said the agricultural industry was reaching a “crisis point” and had little confidence that real action was being taken by the Government to resolve the problem.
“The UK’s food and agricultural sectors are hugely reliant on foreign labour. This is unsustainable. Food has been left to rot in the ground this year due to labour shortages,” Parish argued at the time.
Similar concerns were raised in May when Scotland’s rural economy secretary Fergus Ewing revealed the UK agricultural sector had already experienced a shortage of seasonal non-UK workers of 15% to 20% last year – mainly because of EU workers leaving the country due to continued uncertainty.
But it is not just farmers who could be set to suffer. Pubs serving food will feel the pinch, as lack of supplies will inevitably lead to higher prices. And higher prices are not what the cash-strapped consumer is willing to tolerate.
“We are concerned by rises in food prices caused by inflation and a shortage of migrant labour for UK farmers,” admits British Beer & Pub Association chief executive Brigid Simmonds.
“Any future immigration system must support the necessary levels of staffing in our sector and the farming sector, to support both pubs and brewing. Through our campaign ‘Grain to Glass’, our members already support 12,000 jobs in agriculture through British malting barley and hops. We are working closely with the Home Office on a post-Brexit migration system and have made clear that the tier system needs reform.”
She highlights the possible extension of the Youth Mobility Scheme, which gives the freedom for those under the age of 30 to live and work in the UK for up to two years.
“This could support both the beer and pub sector, as well as the farming sector,” she argues.
UKHospitality chief executive Kate Nicholls is equally concerned.
“Last year’s Benchmarking Report showed that wet sales accounted for 62.6% of revenue, up from 61.3% the previous year and was by far the single largest revenue stream reported. Food sales were still a significant portion of revenue, the second largest, accounting for 33.8% of revenue in 2017,” she says.
“Any increases in food costs are going to have a significant impact on pubs, particularly as gross profit margins for food were significantly tighter than for wet sales.”
Nicholls adds that continually rising costs are not helpful for employers and if pressures increase, some businesses could ultimately fail. She suggests the Government considers offsetting rising food prices by tackling other costs such as taxes and wage rate increases.
Whatever the situation this summer, UK farmers are facing a difficult time as migrant worker numbers continue to fall. With the UK heading towards Brexit this is just another pressure on an already struggling sector.
Pubs will need to keep a close eye on fresh produce costs. But hopes of a more long-term solution on food prices lie with the Government.