70.The UK’s self-sufficiency in food has been decreasing over the past 30 years (see Figure 2). If a combination of tariff and non-tariff barriers results in food imported from the EU becoming more expensive post-Brexit, or in less food being imported, this could stimulate the UK to produce more of its own food. The National Pig Association, for example, stated: “There can be little doubt that Brexit could assist in increased production of British pig products”, while the Food Foundation estimated that “it would be possible to increase the UK market share of 16 of our most popular fruit and veg”.
71.Modelling by the UK Trade Policy Observatory suggested that, as tariff and non-tariff barriers limited competition from imports, “domestic production in the food processing industry will expand under all Brexit scenarios, with this growth in domestic production ranging from 0.9 per cent under the soft EEA membership Brexit to 9.2 per cent under the pessimistic no deals Brexit”.
72.The UK Trade Policy Observatory also found, however, that “this growth in domestic production will come at the expense of higher domestic prices for consumers”. Conversely, the Food Foundation argued that increasing domestic production of fruit and vegetables could “result in cheaper produce for the consumer in the long run, a potentially more resilient supply and, given the perishability of fresh produce, could also result in fewer food miles and better quality product”.
73.The UK is capable of producing more of its own food, so if post-Brexit tariff and non-tariff barriers were to make EU imports less competitive, domestic production might be stimulated. There are differing opinions, however, about the effect that this would have on food prices for consumers.
74.Changing farming practices takes time: as Professor Tim Benton told us, “Farmers might switch their behaviour, but replacement is not necessarily going to happen quickly”. Terry Jones from the NFU agreed: “There is some scope for import substitution but … farming operates on long timescales … the reality of an immediate production response is pretty negligible”. This was borne out by the evidence of Dairy UK to our ‘Brexit: deal or no deal’ inquiry: “There is limited spare capacity in the processing sector and it takes at least two years to commission and build a new plant”.
75.We note that increasing domestic food production will require long-term investment decisions: it would not be possible to increase food production in time to meet any immediate availability challenges posed by Brexit.
76.The scope for UK growers and manufacturers to increase production varies across food types. The Food and Drink Federation stated: “Increased domestic sourcing is something businesses will consider but we must be realistic that it is not always possible or the most cost-effective option. In many cases, ingredients cannot be sourced here (spices, oranges)”. This view was shared by the Fresh Produce Consortium, in evidence to our ‘Brexit: deal or no deal’ inquiry: “The UK’s climate will always limit the range of produce which can be grown here, which is why imported fresh produce is essential to maintaining UK food security and providing UK consumers with a wide range of fresh produce all year round as part of a healthy diet”. Andrew Opie made a similar point: “Imported food supplements what we have here. The range and availability are fantastic. We import broccoli because we want broccoli 12 months in a year”.
78.For the UK to produce more food, the industry will need access to more labour. Under free movement rules EU workers have the right to live and work in any Member State, and they currently make up a significant proportion of the workforce in the UK’s farming and food production industries. As we stated in our Brexit: agriculture report, “The exact proportion of EU labour is unknown, but it is clear that EU migrants make up a substantial proportion of the workforce across all agricultural sectors in the UK”. The NFU’s End of Season Labour Survey for 2017 found that 81% of the horticultural workforce was seasonal, and of that 81%, 95.9% were non-UK EU nationals. Discussing the relevant workforce more broadly, the Food and Drink Federation stated: “A third of the food and drink manufacturing workforce are EU nationals”.
79.When the UK leaves the EU, the automatic right of EU citizens to work and live in the UK will end. A number of witnesses were therefore concerned that leaving the EU could lead to labour shortages in the food industry. The NFU told us:
“Should freedom of movement end without systems in place to allow businesses to continue to employ EU nationals, there would be effects on the price and availability of food. This could be caused by a rise in labour costs associated with the production of food, driven by a tightening of the labour pool, and which in turn could have an effect on consumer prices”.
80.This was confirmed by Dairy UK’s evidence to our ‘Brexit: deal or no deal’ inquiry: “Across the processing sector, an inability to recruit trained EU labour would drive up operating costs with a consequential impact on margins. For many individual dairy farmers, the absence of an alternative domestic source of labour would threaten the viability of their businesses”.
81.Witnesses highlighted that the agricultural industry is already struggling with labour shortages. The NFU’S End of Season Labour Survey of its horticultural members, for example, found that 59% of growers did not secure the number of seasonal workers that they needed in 2017, and that “29.5% of these growers reported crops being unharvested as a direct result of labour shortages”.
82.Professor Tim Benton suggested:
“If, already, the UK farm sector is struggling to find seasonal labour … it is likely to get worse post-Brexit. Some UK production is likely to move offshore, but the costs of doing so will reflect in prices. In response to lower labour availability and higher prices, farms could charge more for the produce, if the market would support that”.
83.This is consistent with evidence that we heard during our ‘Brexit: agriculture’ inquiry. For example, the British Poultry Council told us: “Labour is a significant portion of the cost of production. With more roles to fill, fewer people interested (UK and migrant), and competition from other sectors and countries we will see the cost of production increase”. Similarly, the Food Foundation stated: “Decreased labour availability/increased costs could likewise raise consumer prices of horticultural produce”.
84.To ensure the industry has access to adequate labour, the NFU called for “a suite of visa and work permit schemes”, telling us that “a Seasonal Agricultural Workers Scheme (SAWS) should be implemented as a matter of priority”. The National Pig Association argued:
“Government needs to ensure that Europeans wanting to work in the UK are not prevented from doing so due to complicated application processes or delays to Visa processing, and that ‘unskilled workers’ i.e. those not educated to degree level, on which the pig industry (producers and processors) are dependent are also prioritised”.
Ian Wright, from the Food and Drink Federation, agreed: “To give the Government credit, we believe that they have gone a long way to reassure workers who are already here. They could go a bit further by getting a wiggle on and implementing the registration system … That is the kind of reassurance that people will need”.
85.In contrast, Professor Tim Benton warned that “as economic growth in the UK is less than many developed economies, the UK is a less attractive place for temporary workers to come. Such permits may not be a strong solution”.
86.The Minister, George Eustice MP, said: “The reassurance I can give is that while we are in the European Union free movement of people continues … Thereafter, we are absolutely giving consideration … to a Seasonal Agricultural Workers Scheme”. This was in addition to work that the Migration Advisory Committee was doing “on what our policy on migration should be after we leave the EU … Probably we would have some kind of work permitting system where we would allow in the numbers of people we need for particular sectors”.
87.Making greater use of technology, and automating more processes in agriculture and food production, could reduce requirements for labour. Ian Wright from the Food and Drink Federation described one food manufacturing business which used to employ 100 people; after investing in robotics it now employs eight. Terry Jones from the NFU, however, told us that the timescales for developing and implementing new technology meant it was not a viable solution for post-Brexit EU labour shortages. Professor Tim Benton agreed, summarising a World Economic Forum report on technology in food systems: “There is an awful lot of hope, but it is a 10-year or 15-year vision. It is not an immediate thing”. Developing and adopting new technology also requires investment, as highlighted by a number of our witnesses including Ian Wright and the NFU. We note that the Government has recently announced a new funding stream to support the use of new technology in agriculture as part of the Industrial Strategy Challenge Fund.
88.Lack of access to EU labour, post-Brexit, could lead to an increase in recruitment and overtime costs, or alternatively food producers could seek to attract additional domestic workers by paying higher wages. Such cost increases may have to be passed on to consumers, or else some businesses may cease to be viable, reducing the UK’s ability to produce its own food, with a potential knock-on effect upon availability for consumers.
89.We reiterate the recommendation made in our report on Brexit: agriculture that the Government should ensure that the skills needed by the agricultural sector are recognised when assessing labour needs and access to non-UK labour after Brexit, and further recommend that this should be extended to consider the labour needs across the food supply chain.
90.Long-term investment will be needed to maximise the potential for technology to reduce the number of staff required for UK food production. We welcome the Government’s recent announcement of additional funding for technological innovation in the agri-food sector, but reiterate the conclusion of our Brexit: agriculture report, that technology cannot reduce demand for EU labour in the short term.
91.Professor Tim Benton argued that any increase in domestic food production was likely to require Government support:
“We could grow a much greater range of things. We could grow things in a different way … It will, of course, come with economic costs. The reason we do not grow what we do not grow here is largely driven by economics, so we would have to change incentive structures … It is going to require very big incentives”.
92.Professor Tim Lang, from the Centre for Food Policy at City University of London, concurred: “Let us get real about the potential for agriculture. Yes, it could grow more. What stops it at the moment is money … There are no price incentives for anyone to grow any more food at all”.
93.Some witnesses suggested targeting support at particular types of food. Professor Benton said: “We could have a public policy that was not based on our current ways of doing things … but based on incentivising crops that we want from a strategic perspective”. The Food Foundation said:
“Financial incentives and grants to support farmers to move into, or start horticultural production … [and] Incentives to stimulate demand and mitigate the effects of fruit and veg price rises … These could be delivered, for example, through an expansion (in value and eligibility) of the Healthy Start scheme which provides vouchers for fruit and vegetables to mothers and young children on a low income, and an expansion of the school fruit and veg scheme to cover state-funded nurseries … Each could have a specific focus on British produce”.
94.Increasing agricultural production will require financial incentives and investment. This could be a way of maintaining, or increasing, food availability post-Brexit, but the cost would have to be met by the UK taxpayer.
95.Producing more food in the UK would not necessarily avoid the problems that may arise from tariff and non-tariff measures post-Brexit. Both in agriculture and in food manufacturing, businesses often rely on inputs from the EU.
96.For example, in evidence to our ‘Brexit: agriculture’ inquiry, the Agriculture Industries Confederation (AIC) told us that significant volumes of animal feed were imported either directly from the EU, or from non-EU countries via the EU. They noted that “the UK pig and poultry sectors in particular are very reliant on this imported vegetable protein, a quantity and quality which cannot be replicated domestically and both sectors would face massive risks if supplies were disrupted or their cost was increased”. In evidence to this inquiry, the AIC explained that rather than producers passing costs on to the consumer, it was more likely that production would move away from the UK, “to lower cost competitors outside the EU”.
97.UK food production is dependent on a variety of raw materials and supplies imported from the EU. As these imports will be affected by any post-Brexit tariff and non-tariff barriers, increasing the amount of food produced in the UK would not necessarily avoid these extra costs and disruptions.
84 Department for Environment, Food and Rural Affairs, ‘Overseas trade in food, feed and drink’
(2 June 2014): [accessed 3 April 2018]
85 Written evidence from the National Pig Association ()
86 Written evidence from the Food Foundation ()
87 Written evidence from the UK Trade Policy Observatory ()
89 Written evidence from the Food Foundation ()
92 Written evidence submitted to the EU Select Committee, inquiry on Brexit: deal or no deal (Session 2017–19), Dairy UK ()
93 Written evidence from the Food and Drink Federation ()
94 Written evidence submitted to the EU Select Committee, inquiry on Brexit: deal or no deal (Session 2017–19), Fresh Produce Consortium ()
96 This is set out in Article 45 of the .
97 European Union Committee, (20th Report, Session 2016–17, HL Paper 169)
98 Supplementary written evidence from the National Farmers’ Union ()
99 Written evidence from the Food and Drink Federation ()
100 At the time of writing, it is currently agreed in principle that these rights deriving from EU law will cease to apply to the UK at the end of the transition period on 31 December 2020. See Articles 12–24 and 121 of the
101 Written evidence from the National Farmers’ Union ()
102 Written evidence submitted to the EU Select Committee, inquiry on Brexit: deal or no deal (Session 2017–19), Dairy UK ()
103 Supplementary written evidence from the National Farmers’ Union ()
104 Written evidence from Professor Tim Benton ()
105 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2016–17), British Poultry Council ()
106 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2016–17), the Food Foundation ()
107 Written evidence from the National Farmers’ Union ()
108 Written evidence from the National Pig Association ()
110 Written evidence from Professor Tim Benton ()
116 ; written evidence from the National Farmers’ Union ()
117 Department for Business, Energy and Industrial Strategy, Press Release: ‘Business Secretary calls for new tech revolution in agriculture’, 21 February 2018: [accessed 10 April 2018]
121 Written evidence from the Food Foundation ()
122 Written evidence submitted to the EU Energy and Environment Sub-Committee, inquiry on Brexit: agriculture (Session 2016–17), the Agricultural Industries Confederation ()
123 Written evidence from the Agricultural Industries Confederation ()