So far in ICAEW’s Companies face up to post-pandemic bounce back risks series, the common denominator is a shortage of workers, and agriculture is no different. However, by ‘pure chance’ a lot of things have run smoothly over the past 12 months, according to Keith Phillips, director at accountancy firm Duncan & Toplis. 

Phillips is also Vice Chair of the Farming & Rural Business Community. He noted that farmers felt the same decline in workers that other sectors experienced, but bizarrely because the weather conditions for a lot of farmers were so poor in 2020, the crops produced didn't have the same volume as previous harvests.

“Ultimately, the actual need of farmers was reasonably matched, which was a bit of a surprise,” he said. “Everybody thought there would be a big shortage, but because the crop volumes just weren't there, most of my farming clients managed to cope with the labour they had left in the UK at that time.”

Demand for produce also slackened because many restaurants that would have relied on it were closed due to lockdown. There was not a rush to get new crops planted either, because there were already sufficient volumes to meet the demand.

Agriculture did suffer shortages

“Where we did see big shortages of labour was in our processing plants,” Phillips pointed out. “In Lincolnshire, the UK has a big chicken factory where a lot of chickens are produced (around 25-30 million a week) and it was really in places like this where I think the labour shortages hit home.”

Demand for chicken soared in lockdown as more people bought pre-packaged supermarket-style food and home meals. This surge in popularity, combined with the return home of the Eastern European labour on which the industry previously relied, had a knock-on effect on the labour shortage.

Phillips said: “One of our biggest clients needs 2,000 members of staff a day on average and were reporting anywhere between a 10% and 20% shortage of labour. They were struggling to find the people because it's low paid. It's generally people who have recently arrived in the UK that take up positions like this because their English language skills are still developing.”

He added: “I think the labour market is still fairly short because people are wary about travelling with all the ongoing travel bans.”

How have UK agricultural hauliers been affected?

Taking the twin impacts of Brexit and COVID into account, many hauliers predicted the sector would experience a bad run. Most believed it would be busy up until Brexit, then worried that a combination of red tape and uncertainty over trading rules would slow down the sector.

Then when the pandemic hit, many foreign drivers left the UK, desperate to return to their own countries and be with their families. This could have spelt disaster for the sector but instead resulted in UK hauliers becoming busier, and continuing to be busy even today.

“I've got five or six hauliers running around about 50 lorries a fleet, many of whom are based around hauling agricultural products of one sort or another,” said Phillips. “They're saying business is very good at the minute and are all reporting good first-quarter figures.”

More testing times could follow

There were worries early in the season because of the lack of yields, but the results show that the sector has weathered that particular storm. However, with lockdown restrictions easing and demand on the rise, 2021 may prove to be a more testing time.

Phillips concluded: “Holding on to labour is the big challenge and obviously farmers are trying desperately to do so. There is always a bit of a shortage, but this year other factors could make this more difficult than ever before.” 

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