Soaring production costs have led some of the UK’s leading horticulture businesses to put any plans for growth on hold. Leading figures say the situation is putting the future of the domestic fruit and vegetable industry at risk.

A report commissioned by NFU England and Wales found that production costs have increased by up to 39% over the past two years. Key factors in the rise include energy costs rising by 218%, fertiliser by 47% and labour by 24%.

Crops most impacted by the increases include soft fruit, tomatoes, apples and lettuce. The news prompted one leading Scottish producer to call on the government to pressure retailers to support domestic soft fruit and veg production to ensure food security against a backdrop of international volatility and climate change.

Soft fruit producer James Porter said: “You can only lose money for so long and producers will have to look at growing crops that will make a profit.  

“Labour is a big part of our costs and the issue is that automation is not there yet.” Mr Porter added that increased prices at the tills were not reflected in payments to producers. He said: “The idea that retailers are passing back increased prices back to the growers is simply not true. They are not giving the grower enough to cover the extra production costs.

“It all hinges on how much elasticity there is in people’s willingness to pay for soft fruit and veg because ultimately we can’t sustain increases of this nature without an increase in our sale price.

“Governments need to put more pressure on retailers to support home-grown production. Political and climate volatility means domestic food security is imperative. All the expert recommendations and information is out there and available to governments – they are just not being put into place.”

NFU horticulture and potatoes board chair Martin Emmett said: “I am seriously concerned to hear of growers who are thinking about cutting production this coming season while they continue to face uncertainty with costs, uncertainty around a long-term plan for where their workforce will come from and increasingly challenging relationships within their supply chain.

“We are now facing the third year of unprecedented and highly volatile costs of production, coupled with ongoing uncertainty about the availability of permanent and seasonal workforce and supply chains that return little value back to growers.

“Growers are doing everything they can to make sure the supply of homegrown fruit and vegetables are on supermarket shelves, but as highlighted in the report, there is likely to be further consolidation in production and distribution. If pressures continue as they are, it will be unsustainable for some businesses.  

“The UK horticulture industry strives to be the best in the world and has the positivity and drive to match this ambition. 

As we set out in our growth strategy1 in March last year, there are 10 key building blocks which underpin the success of the sector,” said Mr Emmett. 

These include sustainable energy supplies, access to skilled labour, productivity investment, supply chain fairness and a range of other critical support necessary to create growth in the sector.  

He added that while it is positive that Government consultation into the horticulture supply chain has opened, many businesses are continuing to face difficult customer relationships with prolonged contract negotiations, and contract planning cycles out of sync with production cycles, making it tough for growers to plan long-term for their businesses.

This needs to change. “To ensure we have a thriving UK horticulture sector, we need to see the Government back our fruit and vegetable growers with action and ambition as it set out in its own Food Strategy and match our ambition for growth.

“It is crazy to think that, at a time when we want people to eat more healthily, we are only 50% self-sufficient in vegetables and 15% self-sufficient in fruit.”