UK Growers are expecting the market to fund the additional costs resulting from increases in the national minimum wage and increased employer contributions to National Insurance.

In recent years, the sector has done a remarkable job of managing production costs and improving efficiency, which has provided fantastic value for consumers.

However, cost management and improving efficiency can only go so far in the face of rising production costs. In 2022 and 2023, growers absorbed significant increases in the cost of production due to rising energy and other input costs. But the increase in labour costs announced in the October budget will push production costs up by a further 10-12%.

Labour costs in fresh produce businesses account for a disproportionately high percentage of overall production costs. For some crops, they can account for up to 60% of total production costs.

Producers are concerned about a lack of communication with the market and a lack of understanding of the material effect of rising labour costs in the primary production sector, despite recognising that their own internal costs are increasing for a similar reason.

Many companies have decided not to invest due to poor returns, but this lack of investment cannot last for long.

Producers' expectations are constantly changing and the requirements to meet consumer demands are becoming more demanding. Meeting these demands requires investment that has been on hold for too long due to poor returns.

UK Growers says the market must recognise that all parties in the supply chain need to get a return on investment to ensure the UK has a viable and well-invested fresh produce industry for the future.