Costs make produce too expensive to grow

By Chris Wright, Partner and ARA specialist

Farm leaders are warning of a 50 per cent drop in UK-grown crops unless urgent action is taken to address the various problems facing the industry, such as soaring gas prices and the lack of seasonal workers.

The National Farmers Union (NFU) has written the Government warning of “multiple compounding factors that have profound implications and risks for our food security,” including further pressure on labour costs as Ukrainian workers have made up about 60 per cent of workers taking up seasonal worker visas to pick and pack produce since the UK left the European Union.

In addition, the Russian invasion of Ukraine has also had a major impact on energy, fertiliser and grain costs, which the NFU says is adding “dramatic inflationary pressure and market volatility.”

According to the body, this could lead to a double-digit drop” in food production in the UK by 2023.

The rising price of gas is also a major concern, as 50 per cent of farmers’ costs are reliant on the price of gas.

These prices have risen amid the risk of a cut off in the gas supply from Russia, which produces about 40 per cent of that used in Europe.

The impact of the price rise is being felt most keenly in the protected crop sectors, which includes aubergines, peppers and cucumbers.

The lack of supply will have the knock-on effect of increasing prices for consumers and rising fuel prices are putting further pressure on retail supply chains, pushing up the cost of shipping, heavy goods transport, and final mile delivery.

If your costs and operation have been affected by recent events and you are concerned about your ability to operate at a profit, please get in touch with us as soon as you can.