New proposals that would see employers have to pay seasonal workers’ recruitment costs could cost the industry £43.1m per year, and further impact food security, a new study has found.
The study, commissioned by Defra and the Seasonal Worker Scheme Taskforce, aimed to explore the feasibility of implementing the Employer Pays Principle in the UK horticulture sector in order to minimise financial risks to seasonal workers.
However, the research, published this week and undertaken by Alma Economics, revealed that under most options, growers would face “significant” financial costs that could result in farm closures, job losses and reduced domestic production.
EPP has long been touted as a solution to the human rights abuses reported in the seasonal labour supply chain. However, there are concerns its implementation will be too costly to be workable for the industry.
The study examined the impact the EPP would have on worker welfare, as well as the impact throughout the horticulture supply chain, including the sustainability of the sector, food security and other consumer interests.
It produced four models: a recruiter-led model where scheme operators would take on the costs upfront and then pass them on to the grower then retailers; a centralised fund into which all stakeholders would pay, a grower refund model; and a recruiter-led model that would see all costs passed on to consumers.
Through modelling, it found that to eliminate recruitment the debt burden for 18,200 workers, £43.1m would needed to be paid to cover recruitment-related costs.
But three of the four options led to reductions in the production of domestic horticulture, with a negative impact on grower profits. Only the fourth option, with a higher level of pass-through, would reduce that burden.
Under all options, scheme operators would need to pass on all increased costs to growers, while retailers absorbed only a modest share of costs, except in the recruiter-led model, where consumers took on all costs.
The study also revealed that the cost to consumers varied between £0.01 and £0.03 per week per household, which amounts to a relatively small increase of 0.05%, or less, of the average household expenditure on groceries.
The report concluded that the impact and feasibility of an EPP scheme would ultimately depend on the mechanism by which worker costs were covered and how they were passed through the supply chain.
Read more: Workers’ groups call on supermarkets to pay seasonal labour fees
Most options put significant financial costs on growers. However, in all all options, “retailers absorb only a modest share of costs and the ultimate burden on consumers on a per household basis is small”.
Alma Economics said for this reason costs would have to be shared across the supply chain – but none of the models fully addressed all stakeholder concerns.
The NFU has warned that implementing EPP would “seriously damage UK horticulture”.
“Most businesses already run on very tight margins, so this would push some over the edge,” said NFU horticulture and potatoes board chair, Martin Emmett. “That is at odds with the government’s Food Strategy ambition to provide more easily accessible healthy food for the nation.”
Emmett added that there were gaps in the study in that it did not consider the prevalence or scale of possible worker debt, which he said was “an important issue that requires further thought to determine the best way to address it while also safeguarding the future of UK horticulture and food security”.
However, concerns over added costs were dispelled by worker rights groups who said they ”already exist in the operation of the scheme” but “unacceptably, they are usually shouldered by the migrant workers, who come to the UK to support the UK’s horticultural industry.
”The huge debts and costs which migrant workers face create significant risks, through debt bondage.”
Focus on Labour Exploitation head of policy Kate Roberts said: “Shifting this responsibility away from workers - the Employer Pays Principle - is long overdue. Migration costs being addressed by less-vulnerable actors in the supply chain would dramatically lower the risks of exploitation for workers in the scheme.”
Read more: Why the UK seasonal labour worker scheme still isn’t working
Ahead of next steps, there will be a discussion phase where the research findings will be reviewed and discussed through a series of stakeholder meetings, including retailers, growers, scheme operators, NGOs, worker interest groups, government, and industry bodies.
“The phased approach to consultation is essential in ensuring that all voices are heard and that recommendations are grounded in practical, workable solutions,” said Joanne Young, chief executive of the Association of Labour Providers. “As long-standing advocates for fair recruitment, we are committed to collaborative action to protect workers from exploitation and uphold the principles of ethical labour sourcing across the sector.”
The British Retail Consortium said that its expectations on suppliers remain unchanged while discussions continue and emphasised no “final decisions have been made”.
“The UK Seasonal Worker Scheme plays an integral role in delivering fresh produce to our stores, and the report acknowledges the overall worker experience is positive,” said Andrew Opie, director of food & sustainability at the BRC. “However, there is still work to be done to ensure all worker rights are protected and mitigate financial risks to workers.”
No comments yet