The UK could see fruit and vegetable producers go out of business amid soaring costs, the National Farmers’ Union (NFU) has warned.
A report commissioned by the NFU between February and March found growers are facing inflation rates of up to 24%. The study, carried out by agriculture consultancy Promar International, said the cost of production has gone up by as much as GBP0.13p (US$0.16) per pack of certain products.
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Rapidly rising costs could lead to a 10% drop in production, produce being left unharvested or, in a worst-case scenario, growers being forced out of the sector altogether, the report said.
The key contributors to the inflation faced by growers are energy and fertiliser. Labour continues to be the biggest cost for businesses, representing 30-70% of turnover.
The NFU is calling for the “rest of the supply chain to bear some of the cost pressures and ensure a fair return for growers”.
NFU horticulture and potatoes board chair Martin Emmett said: “The current level of inflationary pressure facing British fruit and veg growers is unprecedented.
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By GlobalData“While growers are doing everything they can to reduce their overheads, some are experiencing double or even triple-digit inflation for key products like fertiliser and energy. If this pressure continues, it will be simply unsustainable for some businesses to continue as they are.
“Our growers produce some of the most iconic products in Britain, like strawberries, apples, and asparagus, to name just a few. We want to continue to fill supermarket shelves with British produce and go even further by growing our self-sufficiency in fruit and veg in the years to come. But this report presents the stark reality of what will happen if we continue without any action from the rest of the supply chain.”
Emmett suggested that if the current situation is left to continue it will mean “dire and irreversible consequences for the future of British horticulture”.
Promar International’s report detailed cost increases across a number of fresh produce items with onions, mushrooms and lettuce coming out on top as far as inflationary pressures are concerned.
