Mar 24, 2023
The Murky Business Behind Britain’s Rampant Food Price Inflation
(Bloomberg) -- Fed up with life as a truck driver, Ermek reckoned it was worth paying about $2,000 in travel and visa fees for a job on a farm in the UK. What the 26-year-old from Kyrgyzstan didn’t expect was to be picked up at the airport, dropped in the English countryside after midnight and then given three days to master strawberry picking. He was fired after a month.
“I thought in Europe they valued their employees,” Ermek said from his home in southern Kyrgyzstan, where he returned last year. He declined to be identified by his full name for fear of reprisals from the recruiter. “They just abandoned us.”
UK agriculture has been scouring all corners of the globe to fill the void of migrant labor since Brexit while still trying to supply supermarkets used to wholesale prices that barely cover costs. But keeping the shelves stocked with fruit and vegetables is becoming a more precarious — and murky — business for both farmers and vulnerable workers.
Food prices soared 18% in February, the biggest jump since 1977, the Office for National Statistics said on Wednesday. While part of that was down to bad weather in southern Europe devastating crops, it also reflected the parlous state of British agriculture.
Some produce is becoming more scarce and less affordable, raising questions over viability and the impact on nutrition in a country that produces a little over half of what it consumes. The harvest of some crops this year is predicted to be the smallest since records began in 1985 while a cost-of-living crisis means families are cutting spending on a healthy diet.
Farms, meanwhile, have had to wean themselves off visa-free workers from the European Union. Bringing them in from as far away as Mongolia has left employers facing extra challenges and expenses and some unskilled employees at the mercy of unscrupulous middlemen. The shortage is so extreme that all UK supermarkets are likely to use exploited labor somewhere in their supply chains, according to people in the food industry.
“If you’re bringing people from further afield, you’re creating an extra cost, and who’s going to be covering those costs?” said Sara Thornton, consultant to CCLA Investment Management Ltd. and a former independent anti-slavery commissioner. “It’s ended up being the workers, who are most unable to pay.”
UK recruiters have stopped hiring from Nepal and Indonesia after recent scandals over illegal fees. Those two countries accounted for 12% of the farm workforce last year. Vegetable producers, recruitment firms, supermarkets and anti-modern slavery groups say they are stepping up their scrutiny of how workers arrive. But that’s getting harder given the desperation to find people.
At Riviera Produce, a grower of staple vegetables in Cornwall, recruiting workers to plant and harvest the cauliflowers, broccoli and zucchini has become a global exercise. The 153-year-old family-run farm in England’s remote southwest corner has taken people from 17 countries across a dozen time zones.
It first relied on Poles, Lithuanians, Latvians, Bulgarians and Romanians — all EU citizens who can work anywhere in the single market — before Brexit. Then came the Ukrainians and Russians before Vladimir Putin’s invasion last year. They were followed by the Kyrgyz, Tajiks, Uzbeks and Kazakhs. More recently, it has welcomed workers from India and Mongolia and is currently working with a recruiter who has agents in places such as Argentina.
Concerned about exploitation, Riviera appointed a welfare officer to ensure its new recruits have the right paperwork, their own bank accounts and haven’t fallen prey en route to Britain, said Amelia Russell, HR manager at Riviera, which supplies UK supermarkets.
“It’s very much doing questionnaires, making sure they haven’t paid any fees,” said Russell. “We have to pick them up from the airport to make sure there’s no payment for transport.”
The UK government, which has advocated eating more domestic produce like turnips to mitigate shortages of other things, said it boosted the number of visas in its Seasonal Workers Scheme to 45,000 for this year, with 10,000 more available if needed.
Yet there’s no visibility on whether it will continue beyond 2024, said Tom Bradshaw, deputy president of the National Farmers Union. The labor shortage meant more than £60 million ($74 million) worth of produce was left unpicked in the first half of last year, according to the NFU.
For some farmers, hunting for labor is just not worth the headache. Andy Allen has been growing asparagus for 35 years in Norfolk, eastern England, but he’s giving up. He’s lost more than £300,000 in unpicked crops since Brexit, while the prices paid by retailers for the produce he has harvested haven’t kept up with costs.
“The risk is too great with the possibility of not getting labor again,” said Allen. “The economics of it are just not there. That goes for many UK growers.”
In Lee Valley, an area near London that’s known as the UK’s salad bowl, growers have been about 30% short of workers for the last three years. This, coupled with relatively low prices from the supermarkets, has led 60 acres of glasshouses being converted into housing and industrial units.
“Ever since we stopped European workers coming here, we’ve just been unable to find the amount of workers and the quality of workers that we need,” said Lee Stiles, secretary of the Lee Valley Growers Association, whose 80 members grow cucumbers, peppers and tomatoes.
The British Retail Consortium, which represents UK supermarkets, has called on the government to address the “systemic challenges” in the way the seasonal visa program is run to protect vulnerable workers. A spokesperson for Tesco Plc said the company has concerns the scheme doesn’t currently do enough to mitigate the risk of illicit recruitment fees.
The government is reviewing the scheme and said last month farm workers on seasonal visas will be guaranteed 32 hours of work a week and pay will be in line with the national living wage.
Workers have regularly been promised more than 40 hours of work a week, before arriving to find they are guaranteed only half that, according to Peyman Zonouzi, a London-based immigration lawyer at Armazi. That’s because of two different contracts, one in their own country and one in the UK, he said.
Others have been selling their property or livestock, or going into debt, to come to the UK to start work on a farm. Surya Bahadur Gurung, a 38-year-old father of one from Nepal, spent the equivalent of £3,635 on payments to middlemen, visa fees, medical tests and flights. He borrowed the money from a loan shark who charged him 24% interest, a good deal by local standards, he said.
But his job didn’t last long. After 40 days of picking apples in Kent, southeast England, he was told there was no more work and he should go back home. After paying off his food and caravan rent, he was left with £1,000, not enough to cover his expenses and the loan repayment.
Kyrgyz laborer Ermek was luckier after he arrived in May last year. The fruit farm in the west of England at least asked a UK agency to find him a new position, and he ended up harvesting mushrooms in Yorkshire, albeit after a very expensive taxi ride north because he couldn’t navigate the train network. Once his six-month visa expired, he went home.
But he wants to come back this season. He liked the experience of working in the UK, especially the country’s attitude toward nature, he said. “Of course, the most important thing is money,” said Ermek. “The money I earn in the UK would last me a year or even more.”
--With assistance from Jeremy Diamond.
©2023 Bloomberg L.P.