The UK’s new immigration policy and the food supply chain Contents

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6The role of technology

63.In its February 2020 immigration policy statement, the Government said that, across the whole economy, “we need to shift the focus of our economy away from a reliance on cheap labour from Europe and instead concentrate on investment in technology and automation”.146

64.As the chart below shows, business investment by the agricultural sector has regularly exceeded 40% of its Gross Value Added (GVA), or around £5bn a year since 2000, compared to about 10% for the economy as a whole. For food manufacturing it has been around 15%.

Figure 4: Business investment within the agricultural, and food manufacturing sectors147

65.The Recruitment and Employment Confederation said that the food supply chain employers it had spoken to “have automated a great deal already and have specific challenges to automating their business any further, especially in the short term”.148 G’s Fresh told us that they had invested over £10m in developing mechanisation and automation of the harvest process, resulting in productivity improvements of 20%.149 However it explained that “the resulting technology is still in its infancy and we remain heavily reliant on skilled harvest labour”, adding that “ours is a low margin industry and this inevitably limits the level of overall innovation investment which can be sustained”.150 Other companies highlighted that they had also invested in technology.151

66.Victoria Prentis said “I would not like to pretend [technology] is the solution to our labour shortages at the moment because it is not, but it will be in the future”.152 Asked about the role for Government in encouraging research and development, and facilitating the often significant investment required, she responded:

We have a lot of work to do, but we are really excited about it. We have a transforming food production [TFP] fund that is providing up to £90 million for industry-led collaborative R&D projects. This is split between four strands: the future food production system, science and technology into practice, and other international collaboration and investor partnerships. We have already allocated a good sum of £7.6 million to currently live TFP automation projects.153

On 30 November 2020, Defra published “The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024” highlighting the “Farming Investment Fund” as part of the Government’s wider plans. It will consist of the “Farming Equipment and Technology Fund” and the “Farming Transformation Fund”.154 Further announcements on it and the Innovation Research and Development Scheme will follow next year.155

67.While the agricultural and food manufacturing sectors have a good record on investing, one way of meeting the challenges of the new immigration policy is for the food supply chain, assisted by innovative and well-designed Government schemes, to become more capital intensive and both drive forward and exploit technological opportunities. However, this will take time to have an impact, and it is likely that many roles throughout the food supply chain will be difficult to affordably mechanise for many years, especially for smaller businesses. This further points to the difficulties the industry faces with the sudden changes to the availability of labour as a result of the Government’s new immigration policy.

68.We welcome the announcement in November of additional Government funding for new technology, and call upon Defra to publish a strategy within 6 months setting out how it will work with technology providers and the food supply chain to ensure our farming and food production sectors can help develop and take advantage of the latest technological advancements. The Government should monitor the speed at which the mechanisation of roles currently done by seasonal labour becomes economic for all farmers, including small farmers, and this should be reflected in the setting of the cap on the Seasonal Workers Pilot.