UK growers have appealed to the market to shoulder the increased costs stemming from the rise in the National Living Wage and employers’ National Insurance contributions.
Their plea was issued by trade body British Growers, which highlighted the sector’s recent success in controlling production costs and enhancing efficiency, noting that this “has delivered fantastic value for consumers”.
Despite these efforts, British Growers cautioned that there is a limit to how much cost management and efficiency can mitigate escalating production expenses. It observed that in 2022 and 2023, growers absorbed major hikes in energy and other input costs, which contributed to significantly higher production costs.
The rise in employment costs announced in the October Budget is expected to inflate production outlays by an additional 10–12 per cent. “Employment costs in fresh produce businesses represent a disproportionately high percentage of overall production costs,” explained British Growers chief executive John Walgate. “For some crops, it can be as much as 60 per cent of the total cost of production.
“Growers are concerned about a disconnect in the messaging from the marketplace and a failure to understand the material effect of the increased labour costs on the primary production sector, despite a recognition that their own internal costs are rising for a similar reason.”
Walgate added that many companies have pulled out of intended investments due to unsatisfactory returns. “The expectations on growers are changing all the time with ever-higher requirements to meet consumer demands.
“Meeting these demands requires investment which for too long has been on hold due to low returns. The market has to recognise that all parts of the supply chain need to see a return on investment to ensure the UK has a viable and well-invested fresh produce industry for the future.”
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