Worker shortage is driving up food prices and could lead to shortages, report warns

An independent review of the issue found negative perceptions about the sector, “unappealing working conditions” and post-Brexit restrictions on hiring foreign workers are causing staffing issues for a range of businesses, including farm and food processors.

The shortage is contributing to inflation, as producers with tight profit margins are passing on higher costs after increasing wages to retain workers and many are unable to scale up production and meet growing demand for food.

The Government wants the UK to continue producing 60 per cent of its own food, but the staff shortage is putting “immense pressure” on the supply chain and there is “a high risk” it could “lead to supply shortages”.

It comes as soaring energy costs have driven up the price of production and transportation, while the war in Ukraine and poor harvests in Europe and North Africa have disrupted global supplies.

The latest figures show the supply chain employed 4m people in the UK 2021, but less than a quarter (856,000) work in agriculture and manufacturing.

John Shropshire, former chief executive of G’s Fresh Limited who led the review, said: “We’ve got short-term labour issues, which means there is occasionally less product available for customers and it’s fuelling food inflation. But there are a lot of things that can be done.”

The review, led by a panel of experts, made 10 recommendations, stating the Government must make it easier for businesses to hire migrant workers, encourage more British people to join the industry and incentivise the development of new technologies.

According to the report, agriculture, horticulture and manufacturing businesses have been struggling to hire the European workers they used to rely on since freedom of movement ended in 2021, as the new points-based immigration system prevents them from hiring workers seen as “low-skilled”.

They can apply for a limited number of seasonal worker visas – up to 57,000 available in horticulture – but the process is “overly bureaucratic and slow”.

The review also found businesses are struggling to hire British workers, due to “unappealing working conditions such as physical demands, unusual working hours, undesirable environments, and repetitive tasks”.

It called on Ministers to develop a strategy to change the public perception, promote the roles on offer and their importance and help businesses improve recruitment and retention.

The Government launched its Pick for Britain campaign in 2020, to encourage more Brits to help harvest fruit and vegetables, and the review said the number of new recruits was “promising” at first but it dwindled as many “preferred to work elsewhere”.

It also stated the automation can be used to address the worker shortage and boost productivity, but the Government “must improve access to funding that incentivises the uptake”.

The Apprenticeship Levy should be replaced with a more “flexible” system that funds “a wider range of training and education”, the review added, as it could allow colleges and universities to provide more courses that prepare young people for a career working in the sector.

The findings of the review were announced yesterday, at Arla’s headquarters in Leeds, after a panel of experts conducted interviews with workers from more than 400 businesses across the county.

The Government has three months to respond.