There is a significant issue facing our farmers and growers that has appeared from nowhere, writes Gordon Corner, NFU county adviser for Holland (Lincs).
There is a significant issue facing our farmers and growers that has appeared from nowhere. The proposal to institute a National Living Wage, brought in by the newly elected Conservative Government in the summer budget, has come as a shock to many in our industry as it will cause significant financial issues for our businesses.
Of course, it goes without saying that all of us in agriculture and horticulture support a fair wage for an honest day’s work, but with up to 60 per cent of costs attributed to labour in many of our horticultural businesses, this huge increase in costs will mean an annual wage inflation of just under seven per cent, or 35 per cent for the six years to 2021.
The NFU commissioned an in-depth report from consultants last autumn, which has found that over the next five years, the introduction of the National Living Wage will make many horticultural businesses unprofitable.
Our companies work on slim margins and adding in this extra, unplanned-for cost could mean that they can no longer continue to trade. In fact it could mean that some crops become unprofitable to grow in this country as there is no sign of our competitors abroad having such a wage-hike imposed on them.
Other unintended consequences could include an increase in imported produce and an increase in prices at the supermarket, florist or garden centre.
The NFU has taken up the industry’s case with our local MPs and will be meeting Government Ministers in the coming weeks. As one NFU member said recently: “Our growers have a fantastic track record of growth and innovation, but this rapid inflation in wage costs could have a permanent, damaging impact on many businesses and make them uncompetitive against EU competitors.”