The soaring cost of production has caused leading horticultural companies in the UK to shelve growth plans, putting the future of the fruit and vegetable industry at risk, the NFU states.
A new report conducted by Promar International, and commissioned by the NFU, found that the cost of production had increased by as much as 39% in the last two years. Within this, energy costs had risen by 218%, fertiliser prices were up 47% and labour costs had increased by 24%. The crops impacted the most by this were found to be strawberries, tomatoes, apples and lettuce.
The report warned that these costs, as well as the impact of global volatility, are now seen as the new normal, with companies not expecting the situation to change soon.
NFU horticulture and potatoes board chair Martin Emmett said: “I am seriously concerned to hear from growers they are thinking about cutting production this coming season while they continue to face uncertainty with costs, uncertainty around a long-term plan for where their workforce will come from and increasingly challenging relationships within their supply chain.
“We are now facing the third year of unprecedented and highly volatile costs of production, coupled with ongoing uncertainty about the availability of permanent and seasonal workforce and supply chains that return little value back to growers.
“Growers are doing everything they can to make sure the supply of homegrown fruit and vegetables are on supermarket shelves, but as highlighted in the report, there is likely to be further consolidation in production and distribution. If pressures continue as they are, it will be unsustainable for some businesses.
“The UK horticulture industry strives to be the best in the world and has the positivity and drive to match this ambition. As we set out in our growth strategy1 in March last year, there are ten key building blocks which underpin the success of the sector. These include sustainable energy supplies, access to skilled labour, productivity investment, supply chain fairness and a range of other critical support necessary to create growth in the sector.
“While it is positive that the Government consultation into the horticulture supply chain has now opened, many businesses are continuing to face difficult customer relationships with prolonged contract negotiations, and contract planning cycles out of sync with production cycles, making it tough for growers to plan long-term for their businesses. This needs to change.
“To ensure we have a thriving UK horticulture sector, we need to see the Government back our fruit and vegetable growers with action and ambition as it set out in its own Food Strategy and match our ambition for growth. It is crazy to think that, at a time when we want people to eat more healthily, we are only 50% self-sufficient in vegetables and 15% self-sufficient in fruit.
“As a start, we need to give our British growers certainty by having a consistent plan for seasonal labour, including a five-year rolling Seasonal Workers Scheme, as well as sustainable returns and longer-term contracts with key customers, the retailers.”