Ministers urged to assess the impact of the National Living Wage on horticultural businesses

Carrots being processed on a production line in Wormegay. Picture: Matthew Usher.

Carrots being processed on a production line in Wormegay. Picture: Matthew Usher.

Farming leaders are calling on the government to reduce the impact of the National Living Wage (NLW) on the labour-intensive horticulture sector.

The measures introduced by chancellor George Osborne in his summer budget will see the re-branded minimum wage rise from £6.70 to £7.20 per hour in April 2016, rising to £9 per hour by 2020.

But this week the National Farmers' Union (NFU) urged the government not to ignore growers' concerns that products such as the British strawberry could become an unaffordable luxury as a result.

A report from independent farm business consultants Andersons for the NFU highlights the danger of crop production moving abroad as unplanned wage rises are imposed on UK grower businesses, making them less competitive and profitable during the next four years.

NFU horticulture and potatoes vice chairman Ali Capper met farming minister George Eustice to lobby for more time to implement the changes as well as to argue that Employers' National Insurance contributions for seasonal workers are scrapped.

'The NFU is fully supportive of a living wage for all workers in the agricultural industry,' said Ms Capper. 'But we need government recognition that NLW will have a huge impact on this sector, particularly for labour-intensive crops such as hand-picked fruit and vegetables where labour costs can be as high as 70pc of turnover.

'We need government's help to mitigate some of the immediate impacts, or our businesses will fail. We are also urging the food supply chain and retailers to consider NLW costs, so that British farm businesses can continue to supply high quality affordable food to British consumers. Our growers must have certainty that a margin over costs can be achieved.'

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The report says the introduction of the NLW will increase the cost of seasonal wages for grower businesses by 35pc over the period 2016-2021, equivalent to an average annual wage inflation of just under 7pc per year.