A bit late, but some more thoughts on the labour question

Posted by Steve Guilbert

26 May 2021

By Prof. Michael Winter

Even in the best organised research project – and I am not claiming that epithet for our project! – it is possible to miss some really valuable research. So back in June 2020 a report snuck past me and only came to light as a reference in a recently published journal article (Tougeron and Hance 2021). Commissioned by a consortium comprising the National Farmers Union, the British Growers Association, British Summer Fruits and British Apples and Pears, John Pelham of the consultants Andersons produced a report entitled ‘The Potential Implications of Covid-19 for the Costs of Production of UK Fruit & Vegetables in 2020’.

The report is based on a postal survey and follow-up interviews with 27 fruit and vegetable growers, with a combined turnover of over £600 million. What is so useful about the research is that it really delves into reasons why labour was and continues to be such an issue for this sector, albeit looked at entirely through the costs lens. One sentence in particular caught my eye in this regard:

… the cost of labour for wheat production – the most widely grown crop in the UK – is typically in the range £80-150 per hectare; the range for field strawberry production, for example, is typically £40,000-70,000 per hectare.

What a difference and to think that we bracket these two radically contrasting production systems together as part of the same industry!

The report details the various ways in which labour cost were affected by the first wave of the pandemic as follows (taken from pages 9-10 of the report):

Worker Availability and Recruitment

Whilst some growers have been able to recruit their seasonal workforces without extra cost, many reported incurring additional expenditure to acquire adequate staff, either from the EU or UK. Additional costs have included:

New recruitment campaigns.
Funding transport (including, in some cases, air travel).
Agents fees.
Processing, selecting and interviewing new applicants.

Training

One indicator that growers use in measuring labour productivity is the proportion of their workforce who have been on the farm in the previous season or seasons – the so-called ‘returnees’. This measure is important in that these workers have already been trained and gained the experience to be able to operate at productive rates. Many growers will target a 60-70% returnee rate. Conversely, new workers lack both training and experience, so not only incur additional induction costs, but also – without experience – have much lower productivity. Some new workers may not reach commercial work rates until their second season on a holding.

For certain growers (although not all), Covid-19 has reduced the number of returnees, to as low as 30%; training costs, for new workers, have increased accordingly. Ensuring that all employees are fully briefed on new Covid-19 procedures for social distancing and hygiene has also increased the requirement both for initial and continuing training.

Accommodation

Reasons for cost increases in this area include:

Acquiring additional accommodation to provide quarantine facilities for newly arriving workers / suspected Covid-19 cases.
Payment of workers’ wages during quarantine period.

Acquiring additional accommodation to reduce density of occupation and enable worker groups to be kept separate to counter potential cross-infection.

Engaging new employees specifically for additional cleaning/hygiene operations.
Setting up of on-site shop facilities to avoid workers having to leave the grower site.

Transport and Logistics

Where accommodation and working sites are close together transport is not an issue, but will be where workers have to travel (some growers will have working sites in both categories).

The two main increases in costs arise from:

Increased vehicle movements resulting from significantly reduced vehicle occupancy rates.
Cleaning of vehicles between trips.

Operations

All growers have seen cost increases in this category, both from new costs (e.g. additional staff or equipment) and from reduced productivity of existing or replacement employees.

Some examples include:

The need for additional training and supervisory staff to ensure that social distancing in the workplace is organised, understood and maintained; for nearly all growers their ratio of supervisors to operating staff has increased.
The introduction of new shift patterns for crop husbandry and harvesting operations to reduce/remove contact between worker groups (to reduce risk of cross- infection).
A higher turnover and significantly lower work rates in newly recruited staff.
The requirement in packhouses to introduce additional shifts to maintain social distancing, with additional overtime costs, together with the new cost of “deep cleaning” between shifts.
The cleaning down of operations machinery (for example mechanical harvesting equipment) at operator changeover.

However, despite these significant new costs Pelham also emphasised that labour costs had increased even more sharply as a result of changes in the National Living Wage which had seen an increase in labour costs of 34% between 2016 and 2020. Returning to the strawberry example, Pelham estimates a COVID related increase in labour costs of around 8%. This is one of many examples of where COVID-induced changes have to be seen in the context of other changes, here labour costs, but often Brexit related changes.

John Pelham’s report bears the legend ‘A First Report’. John informs me via email that he has not been commissioned to produce a second report. This is a great shame because the issues he identified are certainly worth another look in the context of both Brexit and further rounds of lockdown.

Tougeron, K., & Hance, T. (2021) Impact of the COVID-19 pandemic on apple orchards in Europe. Agricultural Systems, 190, 103097. doi: https://doi.org/10.1016/j.agsy.2021.103097