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UK growers seek market support to offset rising labor and production costs

UK growers are looking to the market to help cover the additional costs stemming from increases in the national living wage and the rise in employers' National Insurance contributions.

In recent years, the industry has managed production costs and improved efficiency, which has provided value to consumers. However, there are limits to cost management and efficiency improvements, especially with rising production costs. In 2022 and 2023, growers absorbed significant increases in production costs due to rising energy and input prices. The employment cost increases announced in the October budget are expected to raise production costs by an additional 10 to 12%.

Employment costs in fresh produce businesses account for a large portion of total production costs, sometimes up to 60% for certain crops. Growers are increasingly concerned about a disconnect between market messaging and the impact of higher labor costs on the primary production sector, even though there is recognition that internal costs are rising for similar reasons.

Many businesses have delayed investment decisions due to low returns, but this cannot continue indefinitely. As consumer demands grow, meeting these expectations requires investment, which has been postponed due to insufficient returns.

For a sustainable future, the market must recognize the need for returns on investment across the entire supply chain to ensure a viable and well-invested fresh produce industry in the UK.

For more information:
John Walgate
British Growers
Tel: +44 07836 618598
Email: [email protected]
www.britishgrowers.org

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