Tuesday, 25 October 2016

Brexit: and migrant workers not wanting to work on West Country farms

There is a spat going on between Migration Watch and the NFU over a report on migrant labour working on UK farms:
NFU responds to Migration Watch UK report
Migration Watch UK | Migration Watch UK Press Release - Brexit is a chance to improve wages and conditions for agricultural workers

Whilst there was considerable disquiet over government proposals for a 'foreign worker' register
Foreign workers list 'won't be public naming and shaming exercise' (From This is The West Country)

... some industries are looking at how many migrants they employ - to determine their exact contribution to their sector - including the dairy industry:
Dairy farmers being urged to complete migrant survey | Plymouth Herald

However, it seems that migrant workers are preferring to stay away anyway - as not only is the weak pound less attractive, but so is living in a country perceived to be 'hostile to foreigners':
Plunging pound and threats put EU farm workers off the UK | Reuters
Needed but not wanted | The Economist

Migrant farmworkers shun UK as sterling tumbles

Johann Tasker Thursday 13 October 2016

British farmers are reporting difficulties recruiting overseas workers because the fall in sterling’s value has made the UK a less attractive place to work.

The situation is exacerbating a labour shortage on UK farms which are already finding it hard to recruit workers, including British employees.

Worcestershire grower and NFU horticulture chairman Alison Capper said many migrant workers were staying away following the UK decision to leave the EU. “Migrant workers are choosing not to come,” she told Farmers Weekly.

See also: How a post-Brexit staff shortage could affect horticulture

One employment agency, which provides overseas labour to the UK fruit and vegetable sector, had reported a 70% drop-off in Bulgarian workers wanting to come to the UK in July. The usual drop-off during that month would be 20-25% as the busy harvest season got under way.

The shortfall in overseas workers had proved a challenge for growers in Cornwall, Kent, Herefordshire and Worcestershire, said Ms Capper. “The staff they were expecting to turn up chose not to,” she said. Ms Capper said the reasons were two-fold.

Currency concerns

Some overseas worker were staying away because the value of the pound had fallen – so it was easier to earn a comparable amount of money elsewhere. The pound has dropped sharply in value since the June Brexit vote. It was worth about €1.30 on 23 June but has since tumbled nearer to €1.10.

Not welcome

Ms Capper said other overseas workers were staying away because of the perception they were no longer welcome in the UK following the Brexit referendum result. “There is a lot of not very nice stuff in the media in some of these eastern European countries about what is going on in the UK,” she said.

The NFU argues that access to a flexible, skilled workforce is vital to farming’s competitiveness. Continued access to non-UK born seasonal and non-seasonal workers is a priority for the horticulture, poultry and pig sectors in particular.

The NFU is calling on the Home Office to trial a “substantial” fixed-term work permit scheme for overseas agricultural and horticultural workers to come to the UK during 2017. Similar to the old Seasonal Agricultural Workers Scheme, Ms Capper said the new pilot scheme would be targeted at non-EU workers.

Migrant farmworkers shun UK as sterling tumbles - Farmers Weekly

West Country MP and Brexiter Scott Mann has voiced concerns about these issues for some time:
Futures Forum: Brexit: and the South West
Futures Forum: Brexit: and where next for the South-West

He is particularly interested in fisheries and farming - basic industries in the West Country:
Futures Forum: Brexit: and boosting coastal towns and fisheries

These were considered last week during a debate at Westminster:

The effect of Brexit on agriculture and fisheries in South West England

Published Friday, October 14, 2016

This pack has been prepared ahead of the debate to be held in Westminster Hall at 4.30pm on Wednesday 19 October 2016 on the effect of the UK leaving the EU on agriculture and fishing in the South West. The debate will be led by Scott Mann.

Jump to full report >>

A Westminster Hall debate has been tabled on the effect of the UK leaving the EU on agriculture and fishing in South West England. The debate at 4.30pm on 19 October 2016 will be led by Scott Mann.

This debate pack includes some press and Parliamentary material, and further reading on the implications of Brexit for UK agriculture and fisheries.

Agriculture and fisheries in the UK

Current Parliamentary material is available on Parliament's topics pages for agriculture and fisheries.

The agricultural industry in the UK is small, accounting for 0.7% of employees and economic output.

Economic summary of the agriculture industry in South West England

Some statistics: agriculture in South West England

Economic output £1.4 billion or 1.2%
27,300 employees or 1.2% and
8,800 businesses or 7%

[Sources: Economic output: ONS, Regional GVA; employment: ONS, Business register and employment data and Businesses: BEIS, Business population estimates. Economic output is Gross Value Added and refers to 2014; Employment refers to 2015; Businesses refers to 2016. Agriculture includes all agriculture, forestry and fishing activity]

CAP payments to farms in South West England

According to House of Commons Library analysis of DEFRA data, farmers in the South West received £427m under the Common Agricultural Policy in 2015. This includes £337m under the Basic Payment Scheme, and £90m under the Rural Development Programme.

[Source: Defra/UK Coordinating Body, CAP Payments Search(accessed 14 October 2016). The figures above relates to farms in postcode districts which fall entirely within the South West region. A small number of postcode districts straddle two regions. This means that a small number of farms located in the South West but close to the regional border may be excluded].

In South West England, the industry contributes more to the regional economy than the national average. The agricultural industry contributed £1.4 billion to the South West’s economic output, 1.2% of the total. This compares to 0.7% of UK output.

The South West is also one of the largest regions or countries of Great Britain in terms of agricultural employees. There are 8,800 agricultural businesses in the South West, with 27,300 employees.

EU nationals' employment

There are no estimates of the number of EU nationals employed in the agricultural industry in the South West.

What might Brexit mean for agriculture and fisheries in South West England?

In an exchange in the Commons in July 2016, debating the policy implications of Brexit, Kerry McCarthy suggested that jobs in the south west might be at risk, while the food and farming sector might find it hard to recruit:

On the one hand, Lush cosmetics has just announced that it is going to move most of its production overseas, because it says that its workers do not feel welcome here, while on the other hand there are those in the food and farming sector, 38% of whose workforce comes from overseas, who are saying that they could go out of business because they will not be able to find people to employ.

In reply, Stephen Crabb (then the Secretary of State for Work and Pensions) said that the department had contingency plans, but (he argued) it was important also to recognise the potential benefits:

The Department has clear plans in place for any significant increase in unemployment, whether in a particular local region or right across the UK. We have contingency plans for dealing with up-ticks in unemployment. However, we need to be really careful that we do not exaggerate the bad news that the hon. Lady might think is out there. There are opportunities for this country in terms of trade deals and of securing new investment, such as the investment from Boeing that was announced today. There are also serious risks and challenges, and we need to be clear-sighted and prepared for those. [HC Deb 11 July 2016, c11]

Possible effects of Brexit on agriculture and fisheries

The law firm Ashfords has identified some common themes in post-Brexit literature from the NFU, Country Landowners' Association and the Campaign to Preserve Rural England:

Establishing food security - part of a long-standing ambition to reduce dependencies on food imports.
Securing energy security and carbon reduction - over the past 10 years UK farms have played an increasingly important role in the production of low carbon energy - be it wind, solar, anaerobic digestion or biomass (such as miscanthus).
Protecting the environment - the proximity of farming operations to sensitive environmental receptors and rural settings in general have long tied environmental management with agriculture.
Securing opportunities for growth in exports - aside from the clear benefits of selling produce to other countries, some expound the idea that opening up food export markets will have wider benefits to the UK economy, opening up markets in which the UK can sell its services.
Increasing internal competition - with an estimated 34,000 fewer farms that a decade ago, there are fewer farming businesses in competition with each other.

Agriculture

Although there is much speculation, it is too soon yet to say what the effect on the agriculture and fishing sector of the UK's leaving the EU might be, either at the national or regional level. As the Commons Library briefing papers (mentioned below) explain at more length, much will depend on whatever arrangements are negotiated between the UK and its former EU partners and, perhaps, on whether the UK opts for a 'hard' or 'soft' Brexit.

Even so, in all scenarios Brexit, means a departure from the Common Agricultural Policy (CAP) and its subsidy and regulatory regime. EU farm subsidies currently make up to around 50-60% of UK farm income.

The UK Government has guaranteed the current level of direct funding to 2020 “as part of the transition to new domestic arrangements”. This is in line with the current CAP funding period and hence the timescale over which farmers and regulators have already invested and planned. However, it is not clear what levels of support the UK Government will be willing to provide beyond this, or whether it will target funding in a different way.

Before the referendum, the National Farmers Union (NFU) observedthat arriving at a post-Brexit settlement might not be straightforward:

The [Yorkshire Agricultural] Society concludes that a simple free trade agreement with the EU is probably the UK’s most preferred option, but that this may be difficult to achieve. If no agreement on an FTA is possible then the default position would be for the UK and EU to trade with each other within the WTO system.

In the Lords in July this year, the Earl of Sandwich suggested that farmers were dismayed that Brexit might jeopardise their farm payments:

Generally, I think there has been considerable dismay among farmers since Brexit simply because of the threat to their farm payments. [HL Deb 21 July 2016, c791]

Replying, junior Defra minister Lord Gardiner of Kimble emphasised that the Government would look carefully at how it continued to support (not subsidise) farmers:

I want to emphasise the word “support” because a number of speakers have used the word “subsidy”. My view is that we provide support for what farmers do to help us, in so many ways, in the national and public interest. My honourable friend the Secretary of State has been very clear that this now needs to be looked at carefully. [HL Deb 21 July 2016, c797]

Farmers' Weekly has published its own analysis of agricultural trade in a post -Brexit world. Although it has yet to produce a detailed policy paper, the NFU has recently set out its vision of a "progressive, profitable and competitive future" for British farming after Brexit:

NFU Council supports a bold, ambitious vision for British food and farming post-Brexit; one that ensures farm businesses are central to a dynamic food chain and deliver a countryside that works for everyone.

Over the past eight weeks the views of thousands of members on the future of farming have been gathered through questionnaires and a series of meetings nationwide. Today, NFU Council, the organisation’s governing body, reviewed the results of the work to date and supported the next steps to develop a comprehensive framework. This will form the basis of those initial talks with government, at all levels, to ensure the country builds a progressive, profitable and competitive future for British farming post-Brexit.

Fisheries

Likewise, the implications of Brexit for fisheries remain highly uncertain.

A recent article on the Commons Library's Second Readingblog - Troubled waters? Negotiating fish quotas post-Brexit - outlines some of the issues that are likely to arise in negotiations and considers whether "British fish for British fishers" is a goal that could be achieved.

Migrant workers in agriculture and fisheries

In the whole of the UK in Q1 2016 there were an estimated 25,000 EU nationals working in crop and animal production. This represented 8% of all UK agricultural workers. [Source: ONS Labour Force Survey Q1 2016 microdata analysis. Figures are rounded to the nearest thousand. Not seasonally adjusted].

It is certainly the case that EU free movement law has ensured that UK employers have relatively easy access to labour from EU/EEA states, and that this has offset some of the obstacles to non-EU/EEA economic immigration imposed by the UK’s Immigration Rules. For example, it has been assumed that any need for lower-skilled labour can be met by workers from within the UK and EU/EEA. If EU/EEA nationals became subject to similar controls as non-EU/EEA nationals (e.g. entry for skilled workers only), it is possible that there would be some pressure to relax some visa restrictions or expand certain categories (e.g. for seasonal agricultural workers), depending on the needs of the economy.

If the UK left the EU and EEA, it could impose its own controls on which EU/EEA citizens were admitted to the UK and under what circumstances (assuming that it did not negotiate a future agreement with EU/EEA Member States which required the continued application of free movement law).

There is no certainty at this stage about what those controls might look like – a range of different suggestions have been made by different interested parties. It is fair to assume that the UK’s approach to controlling EU/EEA migration would be informed by broader considerations of the national interest, including the extent to which the UK wanted to continue to attract certain types of migrant to the UK.

How might the labour market be affected by Brexit?

Farmers' Weekly has outlined UK farming and horticulture's reliance on migrant workers:

Across all industries, EU-born workers account for just 5% of the country’s workforce, but in agriculture it’s 65%, according to Office for National Statistics (ONS) figures – not including seasonal workers.

It’s not just the labour-intensive horticulture sector that is reliant on migrant workers.

Pig and poultry units often employ migrant labour and a survey of dairy farmers, by the Royal Association of British Dairy Farmers two years ago, found that a third had employed migrant staff – with over half from Poland.

An article in the Guardian in July this year quoted industry bodies as suggesting that the future for some businesses might be perilous:

Suppliers of native crops – including cucumbers, apples, raspberries and blackberries – could go out of business because of potential bans on EU migrant workers.

Seasonal agricultural workers

Particular concerns have been raised about the availability of seasonal labour, post-Brexit.

The previous seasonal agricultural workers' scheme closed at the end of 2013. Before the referendum, the NFU had voiced concerns about potential shortfalls in seasonal agricultural workers once the UK leaves the EU. (These concerns are discussed in the Commons Library briefing on Brexit's impact on UK agriculture policy).

Asked recently about what the Government is doing to ensure that farmers will continue to have access to sufficient seasonal labour, immigration minister Robert Goodwill said that the Home Office would be engaging with relevant stakeholders, including those in the agricultural industry. [PQ 46569, 10 October 2016]

Questioned in July this year about the resilience of farming businesses, Defra minister George Eustice said that there were ways to ensure the availability of labour:

Defra's plan for food and farming

Defra started work on developing a new 25 year food and farming strategy in conjunction with stakeholders in July 2015. Although it was expected to be published in early July 2016, it has not, but a consultation is due soon. [PQ 46447, 12 October 2016]

Futures Forum