With all the uncertainty surrounding Brexit, the future of supply in this country has come under renewed scrutiny as fears of a labour crisis overshadow optimism over new opportunities for homegrown fresh produce.
In order to secure supply, attention has turned to the possibility of exporting production to other European nations, where labour costs are lower and a more supportive structure exists to help growers establish operations.
Speaking at Fruit Attraction last month, grower Guy Shropshire of G’s outlined the scale of the problem: “In our industry labour is a major part of our cost structure and one of the biggest parts of management in agriculture is the availability of labour,” he explained. “With Brexit there is a lot of uncertainty in the UK and that is driving challenges for us on labour already. The devaluation of the pound is reducing the benefit or return that seasonal labour can earn when coming from central Europe to work in the UK during the summer before returning home. That’s already putting pressure on us. The opportunity for mechanisation is there, but it’s still expensive, the technology is still new, and it’s going to take time to deliver a tangible relief to demand.”
And as Shropshire pointed out, growers are increasingly looking outwards for a solution: “One of the ways we are looking to mitigate a potential labour crisis in the UK is by developing a business in central Europe itself, in Poland, to be able to produce some of the most labour-intensive crops that we have, to then export potentially back to the UK in the future.”
G’s is one of a number of companies that are seeing the benefit of establishing operations in the central European nation, but is setting up in Poland a silver bullet, or are there more complications than would appear at first glance?
Winterwood Farms has been growing in Poland since 1999 and is now the largest blueberry producer in the country with 580ha across four farms. Managing director Stephen Taylor explains that the firm was originally buying fruit from Polish growers but decided gradually to take ownership of farms itself to guarantee supply at a time when blueberries were still very much a niche crop.
One of the biggest advantages of producing in Poland, according to Taylor, is the lower cost and availability of labour, with the government supporting a scheme that allows Ukrainians to come and work on farms, to the extent that 20 per cent of pickers now come from the east European country.
Taylor believes the present instability in the UK means the only reason a grower would attempt to start up in blueberries in Britain today is because of the strong demand for homegrown fruit – but even that is far less of a pull on blueberries than on the more iconic strawberries, making the attraction fairly minimal. And there are agronomic reasons not to grow in Britain too: “Blueberries get their sugar and taste from the hours of sunlight. You’re more likely to get a better-tasting blueberry [in Poland] than in the UK,” he stresses.
At a time when ministers are portraying Brexit as a big opportunity for British producers to increase supply, it’s telling to hear Taylor say that Winterwood Farms has “stopped investment in the UK” – with the exception of packhouse automation – because of a lack of confidence over the future labour supply. “We can’t see any scenario other than the availability of labour going down,” he says. “If you’re an English grower, you will have less competition but if you haven’t got the people to pick the crop it will cost you a lot more, which wipes out any advantage.”
Also well established in Poland are Blue River and Green River, which produce 50ha of blueberries and 200ha of green asparagus respectively. The business was first set up in 2003 with an arable farm, before expanding into dairy in 2006, blueberries in 2008 and asparagus in 2013. The company’s Neil Simmonds describes Poland as “a place where you can develop opportunities for a more sensible cost base” and where agronomic reasoning can take priority.
Nobody should be under any illusion that farming in Poland is easy street, however. Simmonds says the overwhelming preference for British product among supermarkets makes it almost impossible to supply non British-grown crops during the season, and particularly on those lines such as asparagus where consumers strongly seek out homegrown. That means growers should think very carefully before shifting operations abroad: “The barriers to making sensible margins on produce into the UK are very challenging,” he explains. “UK produce is so highly favoured in the UK season that I still think people will say they will pay more for UK product. There’s still significant price elasticity on UK product to offset the extra cost [of production].”
The picture in Poland has been complicated by the national elections in 2015, which saw the opposition Law and Justice Party eject the more liberal Civic Platform and a subsequent crackdown on foreign land investment. In particular, it has now become much more difficult for foreigners to buy land, meaning they either have to rent or go into partnership with a local majority holder.
Simmonds says there has also been a significant increase in the cost of labour in Poland too – as much as 40-50 per cent in the past two years, he estimates – with the new government putting a focus on minimum wages and employment law.
Then there’s the uncertainty of what the future EU/UK trade picture will look like – a factor which is temporarily putting the brakes on Winterwood’s further investment in the country. “If we invest in Poland and then we find there is a 10 per cent duty… What we are doing in Poland is selling less to the UK and more to Scandinavia and central Europe.” Pre-Brexit, Winterwood was sending 80 per cent of its Polish output to the UK, but this year that figure dropped to 50-60 per cent as it actively seeks out markets that are resistant to Brexit change. That has also been a decision driven by the volatile exchange rate situation.
Simmonds says Poland is “not the land of milk and honey that everyone thinks it is”, but while admitting there are challenges around bureaucracy and other things, Taylor concludes: “I’d rather be doing business in Poland than here [in the UK].”
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