Loss of EU labour could drive rise in productivity

The potential loss of EU labour in the wake of Brexit "may be the catalyst that forces the industry to achieve productivity increases", according to a report published by AHDB last week.

"Horticultural businesses would be particularly vulnerable to a reduction in affordable, seasonal labour," the latest Horizon market intelligence report notes. "It is hard to envisage (alternative labour) schemes fully compensating for this loss," even if such schemes were politically feasible.

Given that agriculture, along with forestry and fishing, has the lowest value of hourly output of all major sectors of the economy, "there is scope to increase labour productivity to at least partially mitigate losses", it states. "The loss of cheap labour ... may encourage increased automation, where possible, within the industry." But it notes that the current climate of uncertainty is not conducive to such investment, which may indeed fall in the short term.

Meanwhile, "broader changes to the welfare system to increase the incentives to work may be required" to prompt greater uptake of seasonal positions among the British workforce, it adds.

A UK Commission for Employment & Skills study last year found that nearly half of all agricultural vacancies were "hard to fill" - the highest figure for any industry, while horticulture requires considerably more workers per enterprise than other agricultural sectors.

AHDB head of strategic insight David Swales, who co-authored the report, said: "If there are restrictions in the availability of labour, investment in more capital-intensive production systems such as automation may become a more attractive option for growers and producers. But in the short term, businesses could be exposed by labour shortages and become less competitive in the global marketplace. In addition, some agricultural and horticultural sectors do not lend themselves to automation.

"In the current climate of uncertainty, businesses may need significant signals from Government to help stimulate them to invest the capital required to offset any loss of affordable labour."

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