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Contributing to the economy

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British farmers create a countryside that works for everyone, providing the raw ingredients for a food and farming sector worth almost £122 billion and employing over 4 million people. It provides a secure food system within our shores, feeding the nation and delivering a wide range of environmental and rural community benefits all of which are enjoyed far beyond the farm gates.

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Self-sufficiency | Labour | Trade

Because of its role as the driving force behind so much economic activity, farming offers huge potential to the rural economy as a whole. That’s why money invested by government into UK farming is money invested wisely.

Agriculture’s importance to the UK economy is emphasised by the fact that the UK has 149,000 farm businesses. That’s more than the number of businesses involved in the motor trade, education, finance and insurance.

Part of what makes farming unique is its structure with over 90 per cent of our farms made up of sole traders or family partnerships. It remains an industry characterised by family farming businesses.

Did you know…

  • Farming is the bedrock of the UK’s largest manufacturing sector, food and drink, which contributes almost £122 billion to the country’s economy.
  • British farming provides 61% of the food eaten in the UK
  • 66% of all farm businesses in England also run other enterprises - such as farm shops, wedding venues and B&Bs - generating an income of £680 million, in 2017/18, to the UK economy.

Self-sufficiency

Self-sufficiency captures a sense of how UK farming is performing on its home turf. It’s a yardstick for measuring how competitive we are and how much we produce. There will always be a proportion of food that we just can’t grow in the UK because we haven’t got the natural conditions to grow them.

Self-sufficiency has declined steadily for more than 30 years since its peak in 1984. Then the UK food self-sufficiency stood at 78%. UK self-sufficiency is currently at 61% (measured in 2018).

Farming labour

Did you know…

  • The UK food and drink sector employs over four million people and employs 474,000 people in rural areas.
  • British farming delivers thriving rural communities, providing jobs and driving rural growth both in food production and in diversified industries such as renewable energy and tourism.

The food and farming industry does not shy away from the fact that it relies on a large number of overseas workers, primarily from the EU, and has done since 1945, when the first seasonal agricultural workers scheme was launched.

A report from the National Farmers Union showed that the horticulture sector alone needs 70,000 seasonal workers a year to plant, pick, grade and pack over 9 million tonnes and 300 types of fruit, vegetable and flower crops in Britain. Approximately 70% of the UK’s seasonal horticultural workforce workers are recruited from Romania and Bulgaria and the remainder largely from Poland and other Eastern European countries. In addition to this, the poultry industry has found that it needs around 13,000 seasonal workers in the seasonal period (Christmas) primarily in the processing of turkeys, and a majority of these (58%) would be from outside of the UK.

That’s why access to a competent and reliable workforce is vital for UK food production.

Farmers and growers do try and employ local labour. Many regularly advertise vacancies through local job centres, the internet and place advertisements in the local press in an attempt to recruit local candidates. Despite these efforts the response from the local population is often poor with either a failure to respond to adverts, or when individuals do turn up, they frequently fail to stay on.

Two reasons stand out. The first is British nationals generally are not attracted by many aspects of agricultural work, where it is sometimes unfairly seen as poorly paid, low skilled work lacking career prospects. This, combined with long hours in remote locations and involving physical work, means that many look for work elsewhere. This is particularly the case with regards to seasonal work and permanent jobs in some sectors such as the pig industry.

The second is that most farm businesses are located in rural areas with low unemployment – there simply aren’t enough people available to fill the vacancies. With the UK unemployment currently around 4%, there is a big gap between the scale of the demand and the number of people looking for work.

All workers employed in the farming sector receive at least the National Minimum Wage or National Living Wage and are covered by, and entitled to, the same employment rights and protections as British workers, and indeed can achieve good rewards for their eff orts. Seasonal workers, for example, will often earn substantially more than the minimum wage through hourly performance related bonuses, and harvest workers are often provided with highly subsidised or free accommodation.

It is important to recognise that farm businesses don’t have the power to set their own product prices, they have to use the prices set by the current market. If employers in the sector are forced to pay more for labour – which can account for in the region of 50% of a farm’s production costs in some sectors – somebody has to pick up the bill. Given the balance of power in the supply chain, this is unlikely to happen further up the food supply chain, and it will inevitably fall on farm businesses to do so. At a time of considerable uncertainty in the sector due to Brexit, this will simply add to instability in agriculture and will mean food production is no longer viable for some businesses.

Technology has not yet been developed to replace human pickers at an economically viable scale. While technology advances in the horticulture sector have made substantial improvements to productivity – such as table top strawberry growing and poly-tunnels which make conditions easier for workers and allow them to work at a faster rate – many crops such as berries, apples and pears require skilled hand-picking to avoid damaging the fruit. Current expectations are that automation, where achievable, remain at least a decade away, and even then the cost of adopting new technologies may be prohibitive for many farm businesses.

The scope for automation to replace labour is also limited in the livestock sectors where IT and technology will never be able to fully replace good stockmanship, which is essential for animal welfare. As such the industry will remain dependent upon manual labour for the foreseeable future.

The result of the EU referendum has the potential to drastically alter the landscape for migration to and from the UK. It is clear that immigration was one of the key issues driving the debate around the UK’s membership of the EU, and it is widely accepted that the result requires the UK government to take greater control of our borders with a new immigration system aimed at reducing net immigration.

It is anticipated that changes to the immigration system and the end of the free movement of EU workers that will result from the UK leaving the Single Market will result in labour shortages. However, the National Farmers Union is clear that access to a competent and reliable workforce is vital for UK food production post-Brexit and is calling for government to address this issue in a way that does not cripple British food and farming.


Trade

In 2017 the UK saw record growth of food and drink exports, and this trend continued in 2018. Latest statistics have revealed that the value of UK food and drink exports reached a record high of £22.6 billion in 2018.  UK trade in agricultural goods is dominated by trade with the EU, so maintaining access to EU markets that is as free and frictionless as possible is a fundamental priority.

Did you know…

Food and drink is now the UK’s fourth largest exporting sector, with exports more than doubling over the last decade to reach £22.6 billion in 2018.


Related categories: Economy

Last edited:30 September 2019 at 16:24