UK berry growers warn of dire consequences to industry if producers must pay seasonal worker fees
New rules requiring growers to pay seasonal workers’ recruitment fees could destroy the British berry sector “at a stroke”, producer group British Berry Growers (BBG) warns.
Changes to the Sedex Members Ethical Trade Audit (Smeta) – which growers must pass to supply all UK retailers – will require UK farming businesses to pay for the transport and visa fees of the seasonal workers they employ.
Sedex, the global organisation behind the standards, is due to implement these changes – which include the Employer Pays Principle (EPP) – from 10 September 2024.
EPP equals RIP
But British Berry Growers (BBG) estimates that the EPP will cost the berry industry between £45 million and £60 million per annum.
If borne by growers alone, this extra cost would turn an average annual farmgate profit of 4.3 per cent to a yearly loss of between -3.5 per cent and -6.1 per cent, the BBG says. A move that “would destroy the entire British berry sector at a stroke”.
In a statement setting out its position regarding the new Smeta 7.0 standards, BBG said the EPP burden cannot be absorbed by its members without the cost being underwritten by either retailers or the UK government.
No need to pay fees
BBG maintains that Sedex’s interpretation of International Labour Organization (ILO) guidance, upon which it has based its new EPP requirement, contradicts the UK government’s applied to the Seasonal Worker Scheme (SWS).
According to BBG, the SWS states that visa costs are not required to be paid by the employer and that travel costs should only be paid if the employee is given no choice over the route, method and cost of travel. If the employee is free to make their own choice, then that travel cost does not need to be paid by the employer.
The BBG adds that retailers, via the British Retail Consortium (BRC), are working with Defra on a jointly funded EPP feasibility study, which will investigate the potential use of the EPP for the Seasonal Worker visa route. This report is due to be completed in Spring 2025.
Edit SMETA audit
The BBG is therefore calling for the EPP to be removed from the Smeta 7.0 audit until there is ”absolute clarity and unanimous agreement” from the retail and berry industry on both how the EPP will be delivered, and how the cost will be borne.
In the meantime, the BBG wants the BRC to confirm on behalf of all UK retailers that no action will be taken on audit non-conformance on the above point.
Going forward, the BBG says it wants all future Farm and Packhouse Assurance Schemes to have a mandatory requirement for a proper governance structure. This would stipulate full consultation of all stakeholders, consideration of all the consequences of the scheme requirements including both cost and practicality, and a jointly agreed action plan for any agreed change involving all stakeholders.
The BBG added that, should the EPP be adopted, along with other initiatives of this type which may be proposed in future (such as the increasing cost of travel linked to net zero surcharges), the costs must be identified as a separate cost line within retailer pricing so that the cost to growers is fully recognised and recompensed.
Berry growers ‘gravely concerned’
Commenting on the changes, BBG chairman Nick Marston said: “At British Berry Growers, we are gravely concerned. Our growers are dismayed that these requirements have been brought in without any proper consultation, without any consideration of the practicalities.”
He continued: “In broad principles, I think all compliance schemes should have a proper governance structure which allows for appropriate consultation with all stakeholders and with consideration applied to the practicalities and consequences of those requirements.
“This is just another example of NGOs and audit bodies generating added costs to horticulture production with no actual consideration to the competitive global market, and secondly no consideration for UK production and food security.
“There has to be governance. The audit burden on growers is substantial and the requirements of those audits generate ever-increasing costs for businesses. Some of which are appropriate. Take the living wage. Of course, people should pay the living wage. No one is objecting to that. What we are objecting to is what we see as unnecessary UK gold-plating.”
£60m in extra costs
British berry growers make up the biggest crop group in UK horticulture, according to BBG, accounting for circa 30,000 of the Seasonal Workers’ Scheme (SWS) visas.
Under the EPP, grower recruitment costs paid to third parties, with visa and transport added, would reach £1,500-£2,000 per head from the current £300 per head, it said.
If 30,000 workers were recruited for the British berry industry, this will cost the industry between £45m and £60m per annum in new costs, the BBG said.
The current scheme for the supply of seasonal labour to UK agriculture was constructed by the last government post-Brexit and regulates the supply of seasonal workers through a small group of providers.
According to the BBG, the implications of this SWS policy decision are:
* Growers who previously had a GLAA licence and the ability to recruit direct now have to pay circa £300 per head to use a service provider. Even when staff return the following year the cost is still £300 per head.
* The service providers are now sourcing from new territories, often outside of the EEC - such as the Russian Stan States, the Far East, Africa and South America. All of which require long flights or multiple flights to the UK, which by definition are expensive.
* Workers have to purchase a UK visa from the Government at £350 per visa, some £10.5 million of Government income from the berry sector alone. In addition, workers from the new territories often have to pay an ‘admin’ fee to their national government to work abroad.
For more information on Smeta 7.0, see pages 30-31 in the FPJ’s Sustainability Special.
