The decision of the British population on June 23 to leave the European Union could have significant implications for our fresh produce industry. Without the influx of seasonal migrant labour every year, who will pick and pack the produce that accounts for roughly 50% of the fruit and veg consumed in the UK? With sections of the national press claiming it could spell the end of the British fresh produce industry, Produce Business UK spoke to Jack Ward, chief executive of the British Growers Association…
There have been numerous reports in the national press that without access to seasonal workers home-grown produce could all but vanish. Where are we now?
Jack Ward: “What it’s delivered is a large degree of uncertainty. We’ve always been dependent on migrant labour for harvesting produce and that is not anything new. If you turn the clock back 100 years the majority of the crops… if you went down to Kent and looked at apple picking, hop picking or cherry picking it would have been done by migrant labour, except they were migrating from the East End of London. A further 100 years down the line and they’re migrating from Eastern Europe to come and do these jobs. So we’ve always been dependent on high volumes of seasonal labour to come and harvest these crops. For one reason and another we’ve become increasingly dependent on Eastern Europe and other parts of the EU to supply that labour.”
And what does Brexit mean for that free movement of labour?
JW: “We don’t know what the government has in mind for the future. We don’t actually know if free movement of labour is going to continue or whether it’s going to be curtailed. What we do know is that the whole issue of migration is very sensitive, and reading between the lines what people voted for was arguably a reduction in the amount of labour flooding into the UK. Now our concern is that there are a number of factors that go to making up success in UK fresh produce production. And when between 30-60% of your production costs are involved with labour, obviously the whole labour issue becomes quite sensitive and quite important.
“So one of the principal issues is, really, the cost of labour. And with the advent of the living wage, while that is generally a good thing from the point of an employee, how you actually fund an on-going 7% increase in wage costs without that money coming back from the marketplace is still to be decided. And then if you have increasing issues over availability of labour, and there is no alternative, then people are going to start to wonder whether producing here in the UK is the sensible way to do it. Or whether it’s better to move that production to another part of Europe.
These are the conversations that are happening right now?
JW: “Yes. People will be mulling this over in their minds. They’re thinking, ok, the margins at the moment aren’t very exciting. If they’ve got to go through a year-on-year hike in an above inflation increase in wages and it’s going to be harder and harder to get the people to harvest the crops at the time they want to do them, they’ve got to start to wonder whether they’re in the right business. That’s the real concern. That we just start exporting jobs. And not just seasonal jobs. There is obviously a lot of downstream activity and a lot of downstream jobs that are dependent on the fresh produce industry.”
In terms of organisations like yourselves and the NFU, what kind of conversations are you having with ministers right now?
JW: “Well, the NFU certainly has drawn up a shortlist of issues, and access to labour is one of its priorities. So it has had some initial conversations at a very high level. At some point we’ve got to get down to the nitty-gritty and talk to Defra about the numbers that are required and what kind of scheme would be best suited to the needs of the fresh produce industry. That actually not only enables us to stand still, but also, bearing in mind we only do about 50% of the fresh produce that we consume in this country, actually enables us to grab a bigger market share. Because generally the demand is for UK produce, of UK provenance, produced to UK standards. That’s what consumers know. It’s what they expect and what they understand. But what we have to make sure [of] is that we haven’t got barriers in the way, particularly around labour, which just sends a negative message and ends up with people saying, ‘you know what, this is too difficult, let’s go to Spain, let’s go to Africa, let’s go to Eastern Europe. We’ll find land out there; we’ll just truck the produce back, because it’s easier that way’. That’s what we’re really keen to avoid happening.”
Are the ministers responsible for these decisions and those involved in this dialogue aware of this pressing need?
JW: “Yes. I think within Defra they are aware because they’ve been flagged quite heavily. My concern is that the departments that are responsible for the Brexit negotiations are woefully understaffed at the moment. And the expertise to deal with these issues – the negotiations and all the other bits and pieces – has got to be created. What you’ve got to guard against is that these sorts of issues are lost in a much bigger melting pot of issues that are being negotiated in a smoke-filled room in Brussels over the course of 24 hours. There is a massive amount of detail to be gone through. Not just for the fresh produce sector, but for agriculture as a whole and every other sector. You have to ask yourself, who is poring over all this detail? Who is going to sense check it all with the industries concerned and make sure that the eventual deal – whatever it looks like – isn’t going to give away all sorts of valuable aspects of the UK economy.”
What is the ideal scheme for labour then? The continuation of free movement, or a seasonal workers scheme? What are the options?
JW: “To be honest, at this stage, we haven’t said there is an ideal scheme. I think there is a lot more work that needs to be done. We’ve had the Seasonal Agricultural Workers Scheme (SAWS), which was good but had its shortcomings. We’ve had free movement of labour, which obviously had shortcomings in other areas, but generally it worked quite well in fresh produce. So I think it’s a question of sitting down, understanding where our red lines exist, understanding where government red lines exist and then putting our heads together and coming up with the best system possible to attract labour to this country to harvest the produce.”
What about the claim made in The Guardian that home-grown produce would all but vanish without a scheme for seasonal workers. Is that close to the truth?
JW: “The Guardian article actually came from people that are in the industry – so you have to take it at face value. They are the people that have the power to say, ‘you know what, we’re not going to produce here anymore. We’re going to take it somewhere else’. So, one has got to take that very seriously. I think, from my point of view, it’s the unseen effect. It’s the people who say, this is just too difficult, we’ll move from growing apples, we’ll grub our apples and we’ll move into growing cereals. You don’t actually see the mass effect of that. There’s no big announcement. People just decide that when an orchard comes to the end of its life, they’ll grub it. So you get a gradual decline in production. And then 10 years later people say, ‘we only produce 20-to-30% of our fresh fruit and veg now, how did that happen’?”
So it’s not just about the big headline news, it’s the gradual erosion…
JW: “It’s just another reason, and quite a significant reason, in people thinking why am I doing this?”
How many workers – seasonal workers – come in from the EU at present?
JW: “We’re just trying to put a number on that at the moment. We think it’s around 75,000. It’s a substantial number, but it reflects the amount of activity that is required to provide half the nation’s fresh produce.”
Have you come across people that haven’t wanted to come to the UK this year because of Brexit?
JW: “There are a lot of reports… I personally haven’t come across this. I am told that there are people who are thinking because the exchange rate is not what it was a year ago; actually it may pay to go to another part of Europe. They might go and do the grape harvest in France or Spain. There are lots of other harvests in Spain, lots of harvests in Portugal where financially it makes more sense.”
What about the idea that they’re not welcome here anymore – there has certainly been an increase in racist incidents since June?
JW: “You do get reports of that. You get reports that the atmosphere has become a little bit more hostile in certain areas.
Why is it that our indigenous population don’t want to do this work? A town like Boston has voted overwhelmingly to leave the EU yet it appears they also don’t want to go and do the work in the fields?
JW: “I think what one has to bear in mind… take Lincolnshire for example. It’s a pretty sparsely populated county. There isn’t actually that many people who live in Lincolnshire. And when you’re looking to employ hundreds of people, I don’t think hundreds of people are available. If you went down to the job centre in Boston and said I need to recruit 100 people to harvest whatever it is… broccoli, I don’t think you’d find they were there. I don’t think there are the numbers in the areas where the produce is grown to meet the requirements and expectations. And if you take somewhere like East Anglia, it has a pretty low unemployment rate, and quite a high employment rate. So you’re competing in an area where there already is quite a lot of employment. I think the issue is that where you’ve got areas of unemployment they’re not necessarily that closely connected to the areas of fresh produce production.
“The attraction of seasonal labour looks like this: people can come to the UK for the summer period and, fingers crossed, the weather’s quite decent, you can earn quite a bit of money, with an opportunity to see this country, so that makes it more interesting. You work for a given period – whether that be 12 weeks, 15 weeks, something like that. You probably aren’t looking to spend a lot of money. You’re quite happy to work 15 hours a day because what you actually want to do is rack up some money and take it home. You take it home and that’s the deposit on your house, or whatever. If you’re from the UK, you’re 18, you’re perhaps looking for something a bit more permanent. Seasonal work is not everyone’s cup of tea. I can remember going to Australia, and we did jobs that Australians weren’t prepared to do. But we were only doing it for a month. And after a month we’d say, thank you very much we’re moving on. However, I don’t think I would have chosen to do those jobs as a career. It’s a slightly different situation. Several major employers have spent a lot of time in local job centres trying to recruit people.”
With no success?
JW: “With limited success. Limited success.”
If we can’t get British workers to do the work then, it becomes even more paramount that some scheme is established to get the workers in?
JW: “What we’re trying to do at the moment is build up the case for whatever system is going to work best. We’re not going to rush it. We’re trying to get the numbers, and then it’s looking at what system we could put in place that meets everybody’s expectations. As I say, the industry will have some red lines, which it can’t go beyond, and the government will have some red lines that it can’t go beyond. So it’s a case of matching up those two sets of expectations.”
What does this mean for food security and the food chain, and the cost of food?
JW: “If you look at what’s happened to the pound in relation to the Euro, overnight anything coming in from Europe has become significantly more expensive. If you don’t control your own source of food you’re always subject to someone else’s decisions. I think more importantly… food security is important. But behind food security a whole lot of investment takes place in fresh produce. There are an awful lot of jobs involved. Food manufacturing is the biggest manufacturing industry in the country. I think one in seven people are employed in the food manufacturing industry and what you’re saying is let’s give away part of that industry to somebody else. So there’s an economic investment argument which probably slips below the radar because it’s not as exciting as food security, but it’s as equally important.”
You’re working hard to ensure that doesn’t slip from the relevant people’s minds then?
JW: “We’re keen to make sure that we actually increase our degree of self-sufficiency and we don’t reduce it. If we increase it we’re creating more jobs and more investment and that’s good for the UK economy. And it’s good for the rural economy too, because whilst some of the jobs are migrant labour, if you look at places like Boston or Spalding, in particular Spalding actually, a lot of the Spalding economy is based on the produce industry. If you start taking elements of the produce industry out then there are a lot of people dependent on that. Accountants, solicitors, journalists… me, there’s lorry loads of stuff. It’s phenomenal.”
Has Brexit brought any other issues to bear?
JW: “The other issue that we’re quite involved in is funding for Producer Organisations (POs). There are 33 producer organisations in the UK. They’re set up under the EU Fruit and Vegetable Scheme and they’re funded under pillar one of the CAP. In the UK we draw down about €40m of funding. What they do is support and encourage collaboration in the sector. It enables groups of producers to come together and it provides support for marketing, grading, storage and certain elements of production. So, unlike the wider CAP, which by contrast costs about €3.2bn, it provides some really valuable funding to the produce industry which otherwise wouldn’t be available. And when you look at what’s happening in the multiple retail sector, with continuous consolidation and retailers wanting to deal with fewer and larger organisations it really fits quite well with what retailers are wanting to do.”
So what is going to happen to that funding?
JW: “No one is quite sure. The way the system works is you agree an operational programme with the Rural Payments Agency (RPA) and it lasts three to five years. So there is a continuous process of submitting new programmes for approval. We happen to be submitting four in September for approval to start on January 1 next year to run for three years or five years. Now our concern is who is going to sign on the dotted line and say, yes, this funding is in our budget for the next three to five years, knowing that whoever’s signature goes in that box from Defra actually hasn’t got the authority to say that because we could be out of the EU in two years or so.”
Is that funding going to be matched by the British government?
JW: “I think we’re some way off that. The first bit of good news is that the Chancellor has announced that he will honour the funding commitments to 2020. So we’re ok in the short term. In the medium term we have to sit down and look at the Producer Organisation Scheme and then start discussions with Defra about how something similar could be created in a post-Brexit world. Because it’s delivered a lot of benefits.”
JW: “Not at the moment. There will be other things further down the line. Trade agreements, how we deal with plant protection, how we deal with plant health… All of these issues, year after year, have been dealt with at a European level for better or worse. They are now going to be dealt with at a local level. One of the other issues is whether the government has the resources to deal with all of these issues at the speed at which we may have to deal with them.
And this is going to be something that we’ll all find out over the forthcoming years?
JW: “Yes. When you start looking at the plant health regulations and things like that, and the regulations for produce. And when you think that this has all got to be rebuilt in UK law, it’s a massive job. A massive job. Nobody really knows how this is going to work itself out. It’s going to take an extraordinary amount of time for someone to trawl through all the paperwork and work out what to do with it all.”
The mind boggles…
JW: “Indeed, the mind does boggle. I think we’ll probably end up with a lot of EU legislation staying in place. There will be areas that will end up in the ‘too difficult’ box for quite a while. We will continue to trade with Europe and whether we’ll have that much influence over these regulations, [I’m not sure] ‘cause they may say if you want to send stuff over to us then this is the basis upon which it must be done.”