New SAWS scheme to be trialed

A new scheme to enable migrants to work in UK agriculture in the picking season after Brexit has long been awaited, but is now about to be announced.

It appears that Downing Street was blocking the scheme. Why this should be the case is not clear, but Theresa May has taken a hard line on migration issues, evidenced by her insistence that students should count as immigrants.

In any event, Home Secretary Savid Javid and Defra Secretary of State Michael Gove have been able to push the scheme through.

It will be a trial scheme for two years and will cover 2,500 workers which is a small number given that 75,000 seasonal workers are estimated to have been employed in 2016. The current shortfall is about 7,000.

The scheme would be for those from outside the EU and the regulations that would apply to temporary EU migrants remain to be resolved. Countries that might supply workers under the trial scheme could include Ukraine and Morocco. However, Germany has offered 60,000 visas to workers from the Ukraine.

Under the old SAWS scheme, which ran from 1945 to 2013, farmers could employ overseas workers for up to six months to pick fruit and vegetables. Workers were recruited and vetted by four authorised agencies (the pilot scheme will be run by two yet to be selected).

Farmers and growers have been dealing with significant shortages of labour, reflected in the Radio 4 fictional serial, The Archers. The weakening of the pound and the buoyancy of economies elsewhere in Europe has slowed the number of workers arriving.

One of England's biggest fruit growers, Hall Hunter Partnership, have tried an innovative approach on their seven sites. They have tried to improve workers' productivity to enable pay to rise. As a result, more than 70 per cent of the pickers they hire are returning to the UK each year, well above the sector average of 40 per cent.

The proposal has been broadly welcomed by the NFU who see it as a success for their lobbying.

Read more about the proposal in this report from Farmers Weekly: Visa scheme

Fruit and vegetable production should get post Brexit boost

The Landworkers' Alliance has issued a report arguing that fruit and vegetable production should be boosted after Brexit: New deal for horticulture

It argues that directing more of the budget towards fruit and vegetables will deliver much of what Mr Gove wants in terms of health and sustainability.

However, it is already difficult to secure labour to pick such crops. Google searches by Romanian, Bulgarian and Polish citizens looking for agricultural jobs in the UK dropped by 34 per cent in the past year, according to a study by GK Strategy and OneFourZero.

The fall in interest from overseas has not been matched by an increase in searches from UK workers for UK farm jobs. Bulgaria saw the largest drop, with 2,000 fewer searches for UK jobs in January 2017 compared with the same time the year before.

The two companies said Google search data was a good early indicator of changing behaviour patterns because people increasingly looked online for job vacancies.

The UK agricultural sector already has a 29 per cent shortfall in seasonal workers. The Government has so far failed to introduce any kind of special scheme.

The migrant labour crisis is already here

It's an argument we've made before, but this is a good blog article by Richard Byrne at Harper Adams pointing out that the migrant labour crisis is already here and cannot be solved in the short term by agri tech: Migrant labour shortage

Who will pick fruit and vegetables after Brexit?

I return to this issue in a contribution to the LSE Brexit blog: The migrant labour dilemma

New SAWS scheme not ruled out

The Government has now responded to the House of Commons Defra committee report on the agricultural labour market: Response

It argues that the sector faces a 'challenging situation' rather than a crisis. However, it does not rule out a new version of the SAWS scheme and says that such a scheme could be introduced within months of it being needed.

Thinking about domestic farm policy after Brexit

Brexit is going to occur, but we do not know what form it will take or when it will be completed. The chances of a very hard Brexit seem to be increasing which would not be good news for farming in particular and the economy more generally.

Last week I gave a presentation in the Entente Cordiale room at the Foreign and Commonwealth Office on options for a domestic agricultural policy after Brexit. Staff from a number of government departments were there including Brussels and UKRep Brussels. There were some very good questions, as one would expect.

Policy objectives

I suggested that what we needed to learn from the CAP was the need to have a clear and hierarchically ordered set of objectives. We should avoid poorly designed and overly complex policy instruments that imposed high transaction costs on both government and farm businesses.

Policy should seek to support an economically, socially and environmentally sustainable agriculture:

• Economic: profitable, productive and internationally competitive
• Social: the need to support marginal farmers in upland areas and to avoid depopulation in remote rural areas, especially island communities. Often the biggest boost that could be given to these communities was in the form of infrastructure, especially fast broadband. I gave the example of how the Isles of Scilly had benefited from this: Take up of fast broadband. A theme that emerged in discussion was that a sustainable rural life depended on many things apart from farming. Discussion centred on what role local authorities might take. The Orkney Islands have been successful at attracting returning graduates: Going back home. This is not just a question of the renewables industry: I know from reading The Orkney Farmer that it is happened in agriculture and food processing.
• Environmental: minimise environmental damage from farming activity and promote beneficial effects.

What will go and what the emphasis will be

Area payments would disappear, except possibly in upland areas. There has been resentment at large sums paid to big scale farmers, often investors from outside the industry who may have tax planning motivations. However, it should be remembered that big farms are generally the most competitive, and they will be competing against, for example, North European grain farmers who will still be receiving EU subsidies.

The emphasis in the future will be on public goods, as is evident from remarks made by the Secretary of State (Michael Gove) at the Conservative Party conference and elsewhere. These would include the maintenance of valued landscapes and resilience in relation to climate change. There is a lot of interest in ecosystem services. Payment for them would mainly benefit upland farmers, but how does one price them?

Technological revolution

Farming is on the verge of a digital technological revolution which is likely to be as important as earlier revolutions which saw the introduction of crop rotation and agronomy; mechanisation; and artificial fertilisers/agrochemicals. Data from near earth satellites has been used for some time, but drones offer more precise information to guide decisions in relation to crops. There will be an ability to monitor the condition of cattle ín the fields. Advances are being made in robotic ploughing, planting and cropping.

Accelerating this trend may be an area where the Treasury would be willing to provide some support. Knowledge transfer and training is key with an important role for the existing four Centres for Agricultural Innovation.

There might be a case for supporting investment in buildings and equipment, particularly for sectors that did not receive much CAP funding, e.g., pig farming. This could run up against the additionality problem of paying farmers to do things they would have done anyway, but it would be a mechanism for helping farms to remain internationally competitive.

I noted that migrant labour was one one of the biggest concerns raised with me by farmers as its availability was already declining. This was a particular issue for the horticulture and field vegetable sectors. However, dairying had become increasingly reliant on EU and Fillipino labour. In a time of full employment, recruitment from the local unemployed pool was not possible, even if it ever was. Further mechanisation was some way off. What was needed was a new version of the SAWS scheme, but the difficult political question would be which countries to include.

Elephants in the room

The devolved administrations feared that Westminster was using Brexit as an opportunity to repatriate functions that were rightly theirs. However, we did need a UK policy framework to maintain a level playing field. The whole question of the trade settlement, largely dealt with by fellow presenter Carmen Hubbard, was clearly crucial. One issue that arose in discussion was whether the shelf life of fresh products could be extended to offset delays at the ports.

Succession planning

One issue that was raised in discussion was the advanced average age of farmers (which has been high for some time). I pointed out the statistics may not reflect the reality of a farm business. For example, my brother-in-law is 75, but my nephew has just turned thirty and is driving the farm business forward. Succession planning is nevertheless perhaps an issue under researched by academics, notwithstanding all the advice available from consultants and the farming press. I suggested that The Archers had offered some good fictional treatments of the inter generational tensions that can arise in a farm business.

Thanks

Palmerston and Larry discuss their differences over policy

Thanks to the FCO for offering me a tour of the building, but above all the chance to meet Palmerston the Foreign Office cat who was basking in the sunshine surrounded by a semi-circle of admirers. We peeped into Downing Street, but could not see his adversary Larry.

Can new technology solve labour shortages in farming?

There is considerable interest in the potential of new technology for making farming more productive and less reliant on difficult to obtain labour. I think that the development and application of these technologies should form a key part of a domestic agricultural policy post Brexit, but no one should pretend that they offer a quick, readily available and affordable fix.

Big farms already use semi-autonomous satellite-guided tractors and combines, which can drive in straight lines without overlapping. However, these big machines also tend to compact the soil, affecting its long-term viability and plant growth.

Harper Adams University, using government funding from Innovate UK, have adopted machinery to drill, spray and harvest crops autonomously using open source software, cameras, lasers and sensors. They used drones and scout vehicles to monitor the field and collect data by bringing back soils and crop samples.

The first crop is slightly wobbly where the tractor failed to keep to its line. The first hands free crop is expected to yield only 4.5 tonnes per hectare, compared with 6.8 tonnes using conventional methods.

In the horticulture sector, where labour problems are particularly acute, machines to pick strawberries and apples are being deployed, but they pick at only one third of the rate of a human and miss 15 per cent of the crop. Moreover, the machines can cost something approaching £200,000. Most farmers reckon that their large scale deployment is at least a decade off.

However, it is clear that one narrative that is being put forward (see Matt Ridley in The Times today is that access to cheap labour has held back the introduction of new technology in British farming.

The deputy president of the NFU has told a meeting at the Liberal Democrat conference that future growth in agriculture will be driven by overseas labour. There was no sign of government action on labour and trade issues: Lack of action

Worker shortages draw media attention

The problems that Brexit has caused for labour intensive sections of agriculture have received considerable treatment in the media. The latest analysis in the Financial Times looks at Barfoots of Botley whose biggest crop is sweetcorn: Worker shortage

Barfoots operate along a strip of the south coast in West Sussex where there are many big horticultural firms. I have visited a number in the Littlehampton area. The area has a particularly favourable climate due to the shelter provided by the Isle of Wight.

Picking sweetcorn is a hard grind. It is repetitive and physical and must be done quickly if the product is to be on the shelf in optimum condition. Workers do 12-hour shifts on a range of tasks from picking to processing.

This year's headcount at Barfoots has been running about 15 per cent short, representing 50 to 60 workers. I would think that the biggest factor is the post-referendum fall in the value of sterling, combined with better opportunities in countries such as Poland. Seasonal workers also say they no longer feel welcome in the UK.

Another Brexit-related concern is, that like many horticultural concerns, Barfoots only produce in the UK from May to September. Production then shifts briefly to Germany, then to Spain and onwards to Morocco and Senegal. Post-Brexit import duties could play havoc with this arrangement.

What are the answers? Some would say pay more, but most workers earn between £8 to £10 an hour and there have been improvements in accommodation. Some growers offer English language lessons.

In the short run Barfoots are going to cut out labour intensive crops such as broad beans which offer small profit margins (although they are a useful part of a rotation).

Many see the answer in new technology, and I will consider this further in a later post, although it is not easily applicable to many labour intensive crops.

Seasonal workers will still be needed for many years to come and post Brexit there needs to be an arrangement for temporary work permits on the lines of the old SAWS scheme. Opinion poll data suggests that nearly two-thirds of voters would be prepared to support such a scheme.

Migration plans would hit farming hard

The plans for migration control after Brexit set out in the draft government paper leaked yesterday would hit farming hard, particularly the field vegetable and horticulture sectors which are labour intensive and rely on seasonal labour from elsewhere in the EU.

Under the Government's plans low-skilled workers wanting to stay more than three months would have to register with the Home Office. The National Farmers Union claimed that the plans would cause 'massive disruption to the entire food chain'.

The Government seems to have disregarded the arguments put forward by farmers, claiming that the shortage of labour can be dealt with by recruiting from the local labour pool and new technology. In practical terms we are near full employment, particularly in areas where fruit and vegetables are grown, and those workers that are available often lack the aptitude to tackle the work on offer. As for a shortage of labour becoming a spur for new technology, there are limitations here, particularly in terms of easily damaged fruit. I will look at this issue in more detail in a subsequent post.

There is some evidence that even Brexit voters are relatively relaxed about seasonal workers coming in for a time limited period. If voters found that fruit and vegetables were more limited in supply and more expensive to buy, they might start to question the wisdom of the Government's approach. The issue could readily easily by dealt with by a new version of the Seasonal Agricultural Workers Scheme, although the fall in the value of sterling continues to make the UK a less attractive destination for seasonal workers.

Migrant labour supply problem worsens

Growers of fruit and vegetables are reconsidering their investment plans as it becomes more difficult to recruit migrant labour from elsewhere in the EU. Some may relocate to eastern or central Europe: Pickers shortfall

According to a report in The Guardian: '“The perception from overseas is we are xenophobic, we’re racist, and the pound has plummeted too. We’ve gone with Brexit and that makes us look unfriendly.” Those are the words of John Hardman, director of Hops Labour Solutions, which supplies about 12,000 workers a year to food-growers. He reckons that when it comes to “food-picking jobs in agriculture – which means everything from strawberries to brussels sprouts”, there is currently a Brexit-related shortfall of about 20%, which chimes with recent surveys by the National Farmers Union.'

NFU suggests solutions to seasonal worker crisis

The NFU has warned that the supply of agricultural workers on UK farms is now 'in jeopardy' for the next two growing seasons. They have produced a report on the subject: Access to a Competent and Flexible Workforce

The options they suggest are:

• Reintroduction of a seasonal agricultural workers scheme
• An Australian style points based immigration scheme
• A UK points system to attract non-UK nationals
• Retaining an element of free movement

I would prefer a new SAWS scheme as there is already experience in operating such a scheme which has worked smoothly in the past.

Labour crisis in agriculture

The House of Commons Environment, Food and Rural Affairs Committee was not able to complete its inquiry into labour constraints in agriculture because of the dissolution of Parliament, but has produced a report that highlights some of the key issues: Feeding the nation

The committee does not share the Government's view that the sector does not have a supply problem. It took the view that government statistics are inadequate for measuring agriculture's labour needs, particularly where migrant labour is concerned.

The report says there about 75,000 temporary migrant workers employed in UK agriculture. The NFU says that the sector will need 95,000 seasonal workers by 2021.

Improved living standards in Eastern Europe, the fall of the pound and uncertainty following Brexit have contributed to a labour shortfall in the sector.

Government giving mixed messages to agriculture

With Parliament now dissolved, the House of Lords Energy and Environment Sub-Committee has produced its report on Brexit and agriculture: Brexit report

The report implies that Government has not sorted out its priorities in relation to the sector: 'The Government is currently giving mixed messages to the agricultural sector. Its vision for the UK as a leading free-trade nation with low tariff barriers to the outside world does not sit easily with its declared commitment to high quality and welfare standards in the UK farming sector. Combining and delivering these two objectives will be a considerable challenge.'

The report notes the reliance of the UK agri-food sector on both permanent and seasonal labour from other EU countries. 'This is an immediate challenge which the Government must address urgently.'

The report warns, 'Farmers risk high tariffs and non-tariff barriers on exports, which could render their business uncompetitive, while simultaneously having to adjust to a new UK policy for funding.'

Four new papers on Brexit and agriculture

The Brexit working party of the Farmer-Scientist Network of the Yorkshire Agriculture Society, which I chair, has produced four new papers on Brexit and agriculture. They can be found here: Brexit papers

I have written papers on the future of Pillar 1 subsidies and migrant labour; Michael Cardwell and Fiona Smith have written on agri-food trade; and Alan Greer has covered devolution aspects.

Migrant labour and agriculture

The UK in a Changing Europe programme has published a blog post from me on migrant labour and agriculture in which I call for a new version of the SAWS programme after Brexit: Migrant labour

Seasonal worker shortage hits home

Even before Brexit, a shortage of seasonal workers is hitting fruit and vegetable growers. A survey by the NFU found that almost half the companies supplying agricultural labour were unable to meet the horticultural sector's demands between July and September. The supply pf pickers for late season crops was only able to meet 67 per cent of the industry's needs. This marked a sharp deterioration from the start of the year when none of the labour providers reported problems finding workers.

Leading provider HOPs Labour Solutions said that two years ago 40 per cent of seasonal workers planned to return to the UK. That number had fallen to 24 per cent.

There is a perception that Britain is a xenophobic place, while the devaluation of the pound has reduced net income by 15 to 20 per cent.

British horticulture relies on EU workers for more than 98 per cent of its seasonal workers. Defra secretary Andrea Leadsom has said that more British workers should be attracted into the sector, but they have proved unreliable in the past.

SAWS scheme to be revived?

Ministers are discussing with farming leaders the possibility of reviving a version of the SAWS scheme after Brexit to meet the need for migrant labour in the fruit and vegetable sector. Some producers have considered relocating abroad. A farmer in Suffolk recently placed on hold an order for £500,000 worth of cherry trees because of uncertainties about Brexit.

Planting and harvesting these crops is labour intensive and hard, monotonous work. About 75,000 workers a year are needed as British workers are reluctant to do the work. It's temporary and they would lose most of their benefits. Replacements such as robots are a long way off.

The seasonal agriculture workers (SAWS) scheme, which allowed people to come to Britain for six months to pick fruit and vegetables, operated for sixty years until 2013. It is felt that a larger and more flexible scheme is needed so that labour could be recruited from anywhere in the world. It is estimated that 90,000 workers will be needed by 2019.

Is there a migrant labour crisis?

I had to do a pre-record for ITV Yorkshire about the potential migrant labour crisis in agriculture, more specifically in field vegetables and horticulture (there are also many Fillipinos working in the dairy industry).

I think there is a potential crisis, indeed some signs of strain are already emerging, but there is also a potential partial solution.

The pound is 13 per cent weaker against the Polish zloty since January and salaries are rising there. Polish shipping agents are reporting increased business.

The solution would be to restore a version of the Seasonal Agricultural Workers Scheme (SAWS), but to extend it outside the EU. As far as I am aware, this could be limited to specific countries.

A SAWS type scheme does impose additional administrative costs compared with the free movement of labour. There is also some risk of those on temporary work permits disappearing into the illegal labour market.

However, the alternative scenario is a reduction in the quantity of fruit and field vegetables grown in the UK, reducing even further the percentage of temperate foodstuffs we can supply ourselves. Prices would be pushed up, as imported fruit and vegetables are generally moe expensive, especially if sterling is weak.

Where do we go from here?

Britain, or more specifically England and the devolved administrations, now need to think about what sort of domestic agricultural policy they want to have outside the European Union. I do not think that the decision to leave will be good for agriculture and the food industry more generally, but we now need to move on. Talk of a second referendum is in my view a distraction.

Of course, at this stage, we do not know what shape Britain's future relationship with the European Union will be. However, as a working hypothesis, I am assuming that we will have a domestic agricultural policy and that, hopefully, there will be no tariff barriers against British agricultural exports such as sheepmeat.

It is an opportunity to re-think what the objectives of a domestic agricultural policy should be, and which policy instruments could best achieve those objectives. However, there are many other items on the Government's agenda and agriculture is not likely to be their top priority, just as it was very much a secondary issue in the campaign outside farming areas.

Path dependency theory would suggest that the most likely outcome in terms of subsidies is a scaled down version of the single farm payment. I say scaled down because there are already considerable pressures on public expenditure and the economy is likely to grow more slowly than it would otherwise have done in the short to medium term following Brexit.

In an ideal world, farming as an economic activity would not be subsidised. However, we are faced with volatile prices and for many farms the subsidy payments make the difference between running at a profit and a loss. There are food security and environmental arguments for not reducing the total area farmed.

One could return to deficiency payments which made up the difference between the market price and a target or guaranteed price. However, the expenditure involved is unpredictable which means that they do not find favour with the Treasury as a policy instrument.

There are a series of difficult questions to be faced. For example, do we want to concentrate subsidies more on marginal upland farms which make an important contribution to landscape? The counter argument is that efficient arable farms would be disadvantaged in terms of competitors elsewhere in Europe if they did not receive similar subsidies.

There are also difficult questions about how the horticultural sector is to secure the unskilled or semi-skilled labour it needs for planting and harvesting? Could we and should we revive a version of the Seasonal Agricultural Workers Scheme (SAWS)?

What we certainly need is a debate about what sort of domestic agricultural policy we could and should have in terms of both objectives and policy instruments.

Why isn't food in the Brexit debate?

The fact that food was not being talked about in the Brexit debate was a political failure said Professor Tim Lang, introducing the 2015 City University Food Symposium on the topic.

Professor Alan Swinbank outlined four broad possible scenarios post Brexit, reduced from a long list of eleven:

• More highly protected agriculture with a self-sufficiency objective
• Freer trade
• Recreate the status quo
• Some tweaking to enhance environmental credentials

Any free trade area negotiated with the EU was unlikely to be a simple deal. Internal market rules and geographical indications would have to be respected.

Peter Backman of Horizons FS said that what was distinctive about food service industries and catering was that they relied - and he emphasised the word relied - on migrants.

Ian Wright of the Food and Drink Federation said any impact on access to imports would have a detrimental effect on business. We would cut ourselves off from the talent pool in the EU when the industry had a skills gap of 100,000 workers. He predicted that the UK would break up in a post-Brexit world.

Martin Haworth, acting director-general of the NFU, said that agriculture had 34,513 full-time employees from outside the UK. The EU did lead to some inappropriate or disproportionate regulation. Legislation was the price of single market access.

Kate Trollope of EU Food Policy said that as a third country, EU approval would be required of manufacturing and processing plants in the UK. Border inspections could lead to time delays. There would also be import fees.

David Baldock of the IEEP said that it would be difficult to envisage the Treasury requiring anything other than significant cuts in payments to agriculture. The exit scenario was not one for the UK to dictate, it had to be negotiated.

Former civil servant Andrew Jarvis warned, 'If you are not at the table, you are not on the menu.'

Polls taken showed that those in the room overwhelmingly favoured staying in the EU, whilst the latest opinion polls show public opinion evenly split.