A Pilot Labour Provision Survey for Agriculture
and the Fresh Produce Sector
Survey Report
'If the government does not even know how many casual
workers there are and who they are working for … The Government
cannot develop an appropriate policy response to a problem, or
allocate appropriate resources, …. . We recommend that
the government commission a detailed study into the use of casual
labour in the agricultural and horticultural industries"
(Environment, Food and Rural Affairs Committee, Gangmasters, HC
691 para 19, 20).
1 Overview
This report provides background information to show
how and why the statistics generated for casual workers in agriculture
and the fresh produce sector of the economy are unable to produce
an accurate picture of their activities. This report highlights
the ways in which it is possible to obtain a sample quota of gangmasters/labour
providers from across the UK and obtain more meaningful data about
the sector. The pilot questionnaire illustrates and validates
the type of questions that should be included in a detailed and
statistically significant study of the use of casual labour as
recommended by the Environment, Food and Rural Affairs Committee.
This report is in three parts:
· Current
data sources
This section looks at the rationale for the Annual
Agricultural Census, and explains that we have a mass of data
but little understanding about this sector. The result is that
the media and interest groups are driving the current debate on
agricultural/casual workers not researched evidence.
· A new
approach to data gathering
Data gathering within this sector of the economy
has to take into account the new ways of working that have been
introduced within the food chain over the last fifteen years.
This section outlines the current business model for food distribution,
and shows how it is possible to gather information from gangmasters
and labour providers to illustrate these new forms of work.
· What
we need to know and why
This section looks at how the sample gangmaster/labour
provider businesses were identified, and provides a commentary
on the questions included in the survey and the results from the
pilot survey. The survey questionnaire complete with data responses
is in Annex A.
2 Current Data Sources
The recognition by the Efra Committee that we do
not have information on casual workers in agriculture and horticulture
begs the questions:
? From which information sources do we gain our
understanding of casual workers in this sector?
? Why do we not have verifiable evidence on the
organisation and role of labour providers and temporary workers
in agriculture and the fresh produce sector?
In 2003 the Efra Committee identified
our sources of understanding of casual workers in the food chain
as based on investigative journalism, interest groups and anecdotal
evidence e.g.
| Investigative journalism
| Interest groups | Anecdotal evidence
|
| Bitter Harvest, 1997
Country File May 1997
Panorama June 2000,
Politics Programme 19 June 2003
Farming Today
The Guardian 17 May, 2003
| Ethical Trading Initiative
British Retail Consortium
Fresh Produce Consortium
Transport and General Workers Union
Government agencies represented in Operation Gangmaster
| Passed to Efra Committee
(HC 691 para 8)
|
The current enquiries into the activities of this labour market
segment is handicapped by an almost complete dearth of independent
research-based evidence to drive informed debate and rational
policy decisions. The gap in our understanding of labour providers
and casual agricultural workers led to the Efra Committee Report,
Gangmasters HC 691.[1]
The Efra Committee noted that witnesses claimed the problems with
temporary workers supplied by labour providers throughout the
food chain was 'getting worse' (para 8). However, none of the
witnesses were able to quantify the problem, or define the variables
which constituted the concept of 'worse'.. Nor was it possible
to identify and provide evidence for a previous base line when
gang master activities were verifiably 'less worse' than today.
To date this lack of evidence has led to a complete inability
for the issues to be defined or measured.
3 Annual Agricultural Census
The problems facing the Committee and interest groups have arisen
because the key data source on agricultural workers over the last
one hundred and thirty seven years, the Annual Agricultural Census,
was not designed as a research tool to monitor agricultural workers.
Nor can the current design of this census monitor the transition
of 'agricultural workers' into the modern food chain. The fact
is that Annual Agricultural Census has worked to compound the
invisibility of the casual worker. This has led to a complete
misunderstanding by labour market analysts and policy makers as
to the contribution of casual workers in this sector.
The collection of data on workers was not central to the design
of the Annual Agricultural Census in 1866. Its primary purpose
was and still is to:
- count farm units;
- enumerate the physical content of the land.
A census designed to count farm units and land content is an inappropriate
research tool to understand labour markets. To obtain the right
answers the right questions have to be asked and the correct units
of analysis applied.
For example prior to 1955 'regular part-time' workers in the Agricultural
Census were grouped with 'seasonal' or 'casual workers', although
the three had distinctly different employment patterns and terms
of employment. For instance, farmers directly employ most regular
part-time workers; casual workers are supplied by contractors
or gangmasters. By lumping these three categories together the
data collected endorsed the view that the gang- boss in agriculture
had died out except for harvest work. Moreover, farmers, not by
workers complete the census. Thus the accuracy of the whole section
on labour is open to question, and more so than if the section
were self-enumerated by workers [2].
Added to which, there is an habitual loss of data on agricultural
workers because the Annual Agricultural Census takes place the
first week in June.
The Annual Agricultural Census is taken in June because this is
the time to count the content of the land, because all the crops
have been sown, but not harvested. In June the need for casual
labour for fieldwork is at a low point, so the data has supported
the view that very little casual labour is required. The census
delivers information on crop types and volumes, but not labour
requirements. The gathering of agricultural labour statistics
remains a by-product of the census not a focal point.
Following the differentiation of 'seasonal' and 'casual workers'
from 'part-time regular workers' by the MAFF in 1955, we learned
that their numbers have increased, and at a time (leaving aside
family workers) when most other categories of farm labour have
contracted[3].
The research concerns raised here about the invisibility of casual
agricultural workers in the food chain persists. The little evidence
we have shows that casualisation of farm based agricultural workers
has intensified, and their function has moved from the farm field
to packhouse and food processing sites. Data collection on the
organisation and numbers of temporary workers in this labour market
segment has not been able to keep abreast with these new forms
of working. We need to understand the contribution of labour providers
and the role of temporary workers throughout the food chain to
include processing, transport and retail distribution. However
we do have a clear understanding that over seventy percent of
all fresh produce sourced or packed in the UK ends up on supermarket
shelves.
4 A new approach to gathering data in the food
chain
Grocery distribution represents 48 per cent of all retail sales
in the UK and accounts for 11 percent of GDP. Four supermarkets,
Tesco, Asda Wal-Mart, Sainsbury, and Safeway, control half of
the UK's £100bn grocery distribution business. With over
seventy percent of all fresh produce distributed via supermarkets,
other channels to market for fresh produce such as wholesale markets
and independent greengrocers have largely been eradicated.
The organisation of the UK grocery market is unique in the world
in its intensification and level of profit. Twelve out of the
fifty five product retailers that make it into the world's 1000
most valuable public quoted companies are UK retailers, and five
of these top twelve UK retailers are supermarket food retailers
[4]. Their world-class
position has been achieved by the effective use of information
and communication technologies (ICTs) throughout the food chain
enabling supplier retailer relationships and eradicating inefficiencies.
To begin to access information on 'how many casual workers there
are, and who they are working for' a new approach to gathering
data in the food chain has to be adopted. Questions have to be
asked that can take into account how temporary labour has to respond
to the demands of the technologically enabled food distribution
business model.
5 UK Food Distribution Model
The supermarket business model is one
of placing food on the shelves of their retail outlets 24 hours
a day, seven days a week, 364 days per year. To achieve their
world-class position as the most efficient retailers they have
to create special relationships with suppliers throughout the
food chain. Supermarket preferred suppliers are able to align
their business model to those of their customers, the supermarkets.
Suppliers in their turn have to find ways not only to sustain
supply '24/7' to supermarkets, but also how to cope with fluctuation
in demand at short notice. The popular view is that fluctuation
in demand for fresh produce is seasonal, but this is not the case;
for example strawberries are available almost all year as their
supply is supplemented from sources around the globe and by technologically
enhanced extended growing seasons. With this understanding the
question arises as to
'what is the impact on casual labour supplied to
producers aligned to the supermarket business model of food distribution?'
6 Hypothesis Testing
Before a hypothesis can be tested statistically
it is always stated in the form of a null hypothesis, that is,
no relationships between the variables will be found. In this
case the null hypothesis would be
'There is no relationship between the business
model for grocery distribution via supermarkets and the organisation
of casual agricultural workers in the food chain'.
If we are able to reject the null hypothesis then
we have evidence of an alternative hypothesis that a relationship
does exist, and this is the hypothesis that we are primarily interested
in.
7 Is there a relationship?
Over ten years ago Terry Leahy, currently CEO Tesco
but then Produce Director for Tesco, clearly identified in an
address to the Institute of Grocery Distribution how an ICT enabled
supermarket business model impacts throughout the whole of the
food chain
" We have linked our ordering to our electronic
point of sale system. And we've linked our ordering system to
our suppliers with electronic data interchange. Now when we sell
a sandwich for example, the sale is registered by the scanner
which automatically speaks to the ordering system, which orders
a replacement. This is transmitted to the supplier straight into
the supplier's production planning system; automatically calculating
the raw ingredients required, the amount to be produced on the
next shift, the labour needed, the line capacities, the dispatch
and distribution details and so on. Out go the lorries into the
distribution centre depots, deliver straight to stores, back on
the shelf, back in the trolley and across the scanner within forty
eight hours." (Leahy, 1993)
(Over the last ten years this process has been further
enabled by ICTs, and production and delivery is in many cases
now made within less than 24 hours from 'checkout scanner to checkout
scanner').
Although Leahy has identified labour as a variable
and illustrated the relationship between supermarkets and suppliers
labour we cannot tell if casual labour provided by gangmasters/labour
providers is included here.
8 What we need to know and why
Previous work in this area[5]
and evidence given by suppliers to the Competition Commission
(2000) show that suppliers have to align their ordering systems
to supermarket ordering systems which are based on customer demand
at the point of sale. Based on this evidence a view can be taken
that finely tuned flexible ordering system will need a highly
flexible work force in equal measure. If this is the case suppliers
will be dependent on temporary labour provided by gangmasters/labour
providers.
On the basis of this assumption 'there is a relationship
between the business model for grocery distribution via supermarkets
and the organisation of casual agricultural workers in the food
chain' supermarkets were asked to name fresh produce suppliers
who in turn named their gangmasters/labour providers. The use
of this snowball sampling method delivered a sample group of 160
gangmasters/labour provider businesses.
The results from the pilot survey questionnaire are
based on the responses of 20 self-selected businesses from the
original sample of 160 gangmasters/labour providers. The twenty
respondents all attended the labour providers forum held by DEFRA
on 9th October 2003 in Peterborough.
This survey is a pilot to test questions aimed at
eliciting evidence on the organisation and function of labour
providers and casual workers in the modern food chain. The following
results show that overall the sample group found the questions
valid and the questions delivered meaningful responses. Where
totals do not add up to 100% some respondents have not answered
the questions.
9 Commentary on the results
Exhibit 1 Family members
The survey began by asking if family members had
been gangmasters and how long they had been in business. The question
was asked because it is unclear how people learn to be a gangmaster..
How do gangmasters learn how to assess the profit that can be
made from people working on a variety of different jobs and how
do they learn to negotiate a rate of pay? Management education
for gangmaster/labour providers does not exist so where is it
learned? Prior interviews had showed that gangmaster businesses
are generational.
Unfortunately, nearly all respondents overlooked
these first two questions, as the question had not been boxed.
Exhibit 2 Use of the term gang labour
The survey results show that the term 'gangmaster'
does not best describe their business activity, and the term recruitment
agency or labour provider is their preferred term. Businesses
with turnovers in excess of £10 million prefer the term recruitment
agency.
Exhibit 3 Business turnover
The majority of the survey businesses have a turnover
of between £1 to £3M (60%). 10% of the businesses have
a turnover of more than £10M and 10% of businesses have a
turnover of less than £1m but more than £500k.
Exhibit 5 Where they work and what they do
All the businesses provide labour to packhouses that
pack imported goods (100%) and 90% of businesses provide labour
to packhouses that pack UK grown produce. 60% provide labour to
businesses to work on field crops and 50% provide labour to work
with flower businesses. A further 15% provide labour to harvest
berry crops and protected crops.. The data from this exhibit allows
comparison with data from the Annual Agricultural Census.
It also indicates that packhouse work such as washing,
weighing, labelling, and overall adding value to fresh produce
creates the greatest demand for temporary labour. Many of these
jobs did not exist 20 years ago and this may be a driver of the
increase in demand for temporary labour.
Mechanisation of fieldwork has changed jobs in the
field but has not removed them. The rise of organics may be stimulating
the need for traditional fieldwork such as weeding and hand picking.
Exhibit 6 Food processors
Seventy five per cent of the respondents provide
temporary labour to food processors. Types of work identified
in the open questions ranged from sandwich making to meat packing,
prepared meals to catering or as one respondent commented 'too
numerous to mention'. This indicates that temporary labour is
not a phenomenon that is required solely for seasonal and harvest
work but may be an embedded practice throughput the food chain.
Exhibit 7 Other business sectors
This question confirmed that the use of the 'gang
boss' is prevalent across a range of other industries and deserves
further investigation.
Exhibit 8 Sub-contracting
Sub-contracting was an issue raised by the Efra Committee.
Forty five per cent of the businesses used sub-contracting. The
opening comments show that the businesses view sub-contracting
as a necessary practice to meet fluctuation in demand, but not
necessarily a practice of which they approve.
Exhibits 9 to 11 New ways of working in the food
chain
The responses gained from questions asked in exhibits
9 to 11 indicate that gangmasters/labour providers have aligned
their business practices to meet the demands of modern forms of
food distribution.
90% of the businesses provide labour seven days a
week, to cover both day and night shifts and for over 360 days
a year (the remaining 10% work a six day week). In contrast to
popular belief that casual workers are required for summer harvest
the busiest month of the year was identified as December by 90%
of the sample; also the busiest month of the year for supermarkets.
The idea that work is only generated for labour suppliers during
the summer months is challenged by the data in Exhibit 10 where
only 50% of businesses named July and August as their busiest
period. Likewise in Exhibit 11, 30% of businesses named July and
August as their slack period.
The notion of the habitual loss of data from the
Annual Agricultural Census on labour is also give endorsement
by the data in Exhibit 10 where only a third of businesses named
June as their busiest period and in Exhibit 11 where a fifth of
businesses named June as their slack period.
Exhibit 12 through to Exhibit 31 Customers and workers
'If the government does not even know how many casual
workers there are and who they are working for … The Government
cannot develop an appropriate policy response to a problem, or
allocate appropriate resources, .. . ' HC 691
Exhibits 12 to 31 begin to build a picture of who
uses gangmasters/labour providers, which businesses make most
use of their services and across which geographical regions, and
an indication of how to access the numbers of casual workers in
this sector.
In Exhibit 12 the businesses clearly identified packhouses
as their most important customers (85%). Food processors and growers
were chosen by 60% and 50% respectively as areas most important
to their business. Farmers defined as arable and livestock were
most important to 30% of the businesses.
Exhibit 13 showed that gangmasters/labour providers
deliver casual workers to businesses in nine out of the eleven
RDA regions in the UK. Fifteen percent of the businesses worked
across three regions and another fifteen percent worked across
two regions. The information provided here indicates that casual
labour is a national phenomenon throughout the UK food chain,
not a local East of England practice as previously thought.
Exhibit 19
Exhibit 19 the maximum number of casual
workers at any one time shows 25% supply between 100 to 199 casual
workers, 40% supply between 200 to 499 casual workers, 15% supply
between 400 to 599 casual workers and 15% supply between 600 to
1000+ casual workers.
Exhibit 20 shows the minimum number of casual workers
at any one time supplied by the businesses. 40% supply less than
99 casual workers, 20% supply 100 to 199 casual, workers and 30%
supply 200 to 400 casual workers.
Exhibit 20
For 60% of the sample businesses fluctuation in labour
provided to customers in the food chain is between 60 and 80 per
cent.
This pilot questionnaire showed that 100% of the
businesses provided transport for workers and 40% provided accommodation
for workers and this ranged from 15 to 1000 workers.
Exhibit 24 notice given by customers for extra workers
by sectors, showed respondent's experience of notice for extra
workers ranged from three months to one hour. The most cited experience
was given as one day for all customer types.
Exhibit 25 notice given by customers when workers
no longer needed, showed respondents' experience of notice given
when workers were no longer required ranged from none to three
months the most cited experiences were same day, 12 hours and
1 day
85% of the respondents felt that the notice given
to them by their customers in both cases was not reasonable and
this position was supported by comments in the open question:
"We have a responsibility to these people to
provide them with work- factories think we put them away in a
toy box until they are required again."
"Our customers
don't actually realise that you are interfering people's
livelihoods."
"They think you can react at any time of the
year and they don't realise that when they are busy so is everyone."
The gangmasters/labour providers experience of 'unreasonable
notice' matches the experiences of suppliers who in their evidence
to the Competition Commission (2000) complained of similar treatment
regarding the notice given to supply product to customers.
Exhibit 28 shows that gangmasters/labour providers
employ foreign workers throughout the UK with the most cited nationalities
being Portuguese and Lithuanian.
Exhibit 31 illustrates the perceptions among gangmasters/labour
providers on the unwillingness of local people to work in the
agricultural and food processing sector. Overall, the view taken
is that the low pay and low image of the sector deters local people.
[6]
10 A scenario for testing
A scenario that can be developed from the pilot study
(to be verified by a statistical sample) is that gangmasters/labour
providers operate across the UK and within all areas of the food
chain (possible exception food retailing). On average they have
a work force of around 400 people; their workforce will most likely
include British, Portuguese and Lithuanians. The gangmaster/ labour
provider will transport the workers from workplace to workplace
to meet customer needs 24 hours a day 7 day a week 364 days a
year. On average the customer will give 24 hours notice for labour,
but will lay off labour without any notice. The gangmaster/ labour
provider will take responsibility for retrieving the labour from
the customers' premises to transport them home, or to other places
of employment. The gangmaster will meet transport and administration
costs and aim to make a profit. The gangmaster/labour provider
will do this by charging his customers a fee, which is
calculated to be around thirty per cent of the earnings of the
labour supplied. This means the customer pays the gangmaster/labour
provider the value of the labour + an extra thirty percent e.g.
if the cost in wages of a gang is £10000 the gangmaster will
receive £1300 from the customer to pay the labour, cover
costs and make a profit.
With a statistically meaningful example it would
be possible to:
look for correlations between business turnover(exh.3),
work categories (exh.5), subcontracting (exh.8) and numbers of
employees (exh.19,20). This would provide an understanding of
which categories of work make the greatest use of sub-contractors
currently identified as an area of abuse and mal-practice.
identify pay rates to employees and margin taken
by the labour provider to identify efficient practices. (Divide
the number of employees into the business turnover. For the pilot
this works out at around £12K to £14K per employee which
if the minimum wage is deducted leaves around 30% margin)
separate out where casual workers are used in
activities clearly classified to agriculture and where casual
workers are used in the food chain
create a benchmark to see in the future if the
use of casual labour increases or decreases across the UK
ascertain whether or not the use of casual labour
is a response to the modern food distribution business model
identify gangmaster/ labour provider businesses
that are able to most efficiently manage fluctuations in demand
for labour with or without the use of sub-contractors
verify to what extent gangmasters/labour
providers supply casual labour day and night, seven days a week
throughout the year to food chain businesses
identify whether gangmasters are part of an
urban or rural based economy or both
assess the importance of gangmasters/labour
providers to the rural economy
assess the significance of transport provision
to workers based in remote location
assess the significance of accommodation provision
to workers based in remote location
assess the economic contribution of gangmasters/
labour providers and casual workers to the efficiency of the modern
food chain system
assess the difficulties for the business by
heavy reliance on employing foreign nationals
Defra and the University of Cambridge would like
to thank all the gangmasters/labour providers who attended the
Labour Providers Forum in Peterborough 9th October
2003 and who gave up the time to complete the survey questionnaire..
Dr. Jennifer Frances
Institute for Manufacturing
University of Cambridge
1 The ETI has looked at seasonal and foreign labour
as a segment of the UK food industry, but the Committee has recognised
that there is a need to look at the casual labour market as a
whole. Back
2
For further discussion see MAFF (1968) A Century of Agricultural
Statistics, London: HSMO Back
3
Errington, Andrew, (1985), 'The changing structure of the agricultural
and horticultural workforce', Agricultural Manpower II
(2), 21-8 Back
4
Wileman, Andrew, Jary, Michael (1997) Retail Power Plays: From
Trading to Brand Leadership, London: Macmillan Back
5
Frances, Jennifer and Garnsey Elizabeth (1996) 'Supermarkets and
suppliers in the UK: system integration, information and control'
Accounting, Organisation and Society 21 (6), 591-610 Back
6
My previous work with gangmasters indicates that gang work in
the fields (potato picking, lettuce planting etc.) was predominantly
women's work and was organised to fit in with women's household
responsibilities i.e. a working day was 7.30 am to 3.00pm. In
the mid to late 1970s changes in the model of food distribution
led to part-time jobs becoming available in supermarkets, and
at the same time jobs in packhouses increased. It is thought
that retail work with more 'family friendly' working arrangements
attracted women workers away from gang work. Likewise some packhouses
run a 7.30am to 3,00pm shift for direct employees, the gap left
by the women has been filled by migrant male labour devoid of
family responsibility willing to work extended shifts required
by packhouses and other food processors as casual workers. UK
males have probably always seen gang work and casual work in food
processing as the employment of last resort. See Exhibit Back
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