3. Good work for a thriving economy
Workers and employers in food, farming and rural communities face acute challenges, yet they are also grappling with structural pressures and long-term trends that are shared across the economy: the training and skills to meet seasonal demands; the lack of year-round secure employment opportunities; the lack of infrastructure to support rural working; and perhaps most importantly — low wages for workers while value is captured by larger players in the supply chain.
We met Mike in a food factory in Birmingham, and he outlined the irony of his position — making food but unable to afford to eat properly:
“Why is it that I work in a factory making food and my wage stays low? Over the years the price of a car has got more expensive. And we just expect that, that’s normal. But why not food? Why does that stay cheap? And all of us that make food, our wages stay low. I work in a factory and I make food, but I can’t afford to buy whatever food I want. I buy food in the discount section because that’s what I can afford to buy. But I get free cakes from the factory.”
Thousands of people working in food manufacturing and farming live this paradox every day.
The issues we want to tackle
A key question here is how we can develop a much more inclusive and innovative view of the future of work in food and farming systems, and in rural economies, when we have surrendered so much of the debate on the altar of ‘cheap food’. We have assumed that the contract between food producers and consumers is a zero-sum game, ignoring the benefits, in profit and social impact, that can be gained by adding value in the supply chain. It also ignores the scope there is for investment in primary production to drive innovation in productivity and quality. Potentially there is a virtuous circle, but in food and farming, the barriers are substantial.
This challenge arises not just from a simplistic, competitive view of people’s roles in the economy — as either producers or consumers — but from a dominant business model which is no longer fit for purpose. It is a model that is also causing many of the problems which we have encountered during the work of the Commission — in people’s health, in labour shortages and rural deprivation.
Meanwhile, pressures on efficiencies drive consolidation, farms become larger and more specialised, barriers to new businesses are high. The UK has lost a fifth of its farms in the last decade, with an ageing workforce: around a third of all land holders are over 65 years old, and only 3 percent of farms are owned by people under 35 years (although this hides the reality that 80 percent of holdings are family farms, run by members in formal or informal partnerships). While the jobs currently done by migrant workers might be carried out by robots in the future, many are hard to automate, and all will require investment.
Why this has been so intractable
Raising the quality of work, and the number and variety of jobs available in rural communities, means new thinking and new policy. For example, it is possible to raise the productivity of farming through automation, but, in practice, the cost of investments required can be a major barrier to uptake. And in turn, such automation can take certain jobs out of the sector. As businesses told us throughout the UK tour, the current economic uncertainty is holding them back from the kind of capital investment that would drive change at scale.
Furthermore, labour crises are exacerbated in rural areas by poor services. In Norfolk, a quail farmer told us how difficult it is to recruit managers when there is no local school. We heard from micro and small businesses how hard it is to hire workers, particularly seasonal ones, where there are no public transport links.
Towards more comprehensive solutions
We know that it is possible to ameliorate the vicious circle, because we have met people in the course of the Commission’s inquiries who are doing things differently, building a richer and more realistic economy that recognises and rewards enterprise, collaboration and trust, paying attention to what people care about and not just what they will pay for.
“We’ve been exploring collaboratively how we might use labour between us and think more intelligently about providing greater job security, development and upskilling. In the winter it may be packing work. We want to secure a good pool of labour. We need to get the work-life balance right as well. It shifted from where before you would turn up every day, now if the weather looks bad we give them a few days off and ask them to come in on a Sunday instead.” Arable farmer, Lincolnshire.
Businesses like Taymar Grow Local, who started out by coordinating local producers to supply a box scheme. Less focussed on generating big profits and more interested in building community capacity and reciprocity, they have now seeded many spin offs: a shared kitchen, a starter farm scheme, a honey coop, an equipment share scheme, a cider coop and more — whilst reaching out deliberately to all parts of their local communities.
Our outline proposals below try to learn from these kinds of experiences.
The thrust is to help people collaborate where this is in the public interest, within businesses and communities, between them, and along the chain from farm to fork. They range from enforcing the law as it stands to protect workers, to investing in social enterprise. One overall effect is to place more value on farming, forestry and other land-based work.
“Tech will result in huge consolidation of the industry, particularly in processing. Slaughter houses in Germany are much bigger and largely automated. They’re huge. A small farmer taking 4 to 20 pigs at a time just couldn’t work.” Pork Producer, Norfolk.
More research is needed to answer at least three of the biggest practical questions at the heart of this conundrum.
First, do we need to explore things like a new supply chain settlement, or some kind of basic income successor to farm support?
Second, in distorted markets, how do we prevent the more powerful players taking the biggest share of the value for themselves? Third, how do we enable young people to make careers in the countryside, bringing critical mass back into rural communities, and replenish demand for rural services, like healthcare, schools and transport.
On the third question, Lord Curry of Kirkharle set out in his 2002 Commission several ideas — share farming, whole farm contracting or work-to-rent schemes. He is now leading a task-force on workforce skills for the agri-food industry.
But more than this, a flourishing rural economy will also need to respond to the opportunities afforded by much wider variety of jobs and sectors, which are so far underexplored. From the ‘restoration economy’, an idea which seeks to put back in through ecological restoration what generations of extraction has taken out, to creative and new technology sectors who, with the right infrastructure and opportunity, would choose to locate their businesses in rural communities.
Next Steps
Put existing laws into practice
A key message from our inquiry so far concerns the untapped potential of existing laws that are already on the statute book but are ignored or barely used. Workers’ rights and protections are one such area. Research into agency work and the gig economy, by the Resolution Foundation, the Taylor Review and Sir David Metcalf’s Labour Market Enforcement Report, and others, suggest that the main objective must be to enforce existing laws. They also point out that the capacity of agencies to enforce the law is minimal — businesses can expect a labour enforcement inspection once every 250 years.
One solution is for government agencies to share intelligence and, potentially, cross-enforce. For example, the Gangmasters and Labour Abuse Authority (GLAA) operates the licensing regime for businesses that supply temporary labour in high risk sectors in the fresh food supply chain. They gained additional powers to investigate modern slavery and other labour abuse offences across England and Wales regardless of worker status or sector. When it comes to modern slavery, anyone can report potential problems: the key here is extending this power, and training, for example, environmental health or fire safety inspectors to become confident in recognising and reporting breaches.
Dame Glenys Stacey’s interim report on Farm Inspection and Regulation aims to simplify, streamline and enforce the myriad regulations that apply to farms, which would be an important step.
Support and promote social enterprise
There are now more than 100,000 social enterprises in the UK employing around 2 million people and contributing around £60 billion to the economy. They are innovative (half of social enterprises introduced a new product or service in 2017 compared to a third among SMEs) and resilient (over half of social enterprises made a profit in 2017 compared to a third of SMEs). Yet they have difficulty accessing finance. Two mechanisms designed to address this, Social Investment Tax Relief (SITR) and the Seed Enterprise Investment Scheme (SEIS), specifically exclude many land-based businesses. We want to explore how SITR and SEIS could be extended to cover farming, gardening, woodland forestry enterprises.
“Schools are small orders and they need to be delivered many times a week. Absolutely my biggest challenge is logistics.” School Catering Procurement Manager, Suffolk
As important as enabling new social enterprises is encouraging existing enterprises to become more ‘social’. Riverford, the veg box company, has recently taken the step of going 74 percent employee-owned. Some farms are beginning to experiment with share farming, as way of giving would-be successors a stake in success. Mutualisation — the process of making a business more cooperative or worker or customer-owned, requires incentives. Building on the success of the EU Fruit & Veg Scheme in incentivising growing businesses to form marketing coops — the scheme was only open to such ventures — and we want to explore, among other things, whether a UK successor should also be open to individual businesses where at least half of their shares are owned by staff.
These ideas all contribute to ‘disintermediation’ in the rural economy, a now widespread feature of disruptive business models in urban settings. Producers and consumers deal directly with each other, often through enabling platforms, to ‘cut out the middleman’. As well as direct to consumer food businesses, Airbnb is another platform which assists rural businesses to directly access a share of the ‘tourist pound’. Further innovative developments being explored — especially in rural communities with denuded transport systems — could combine delivery trips with ride-sharing.
Open up information, with funds for innovation
This debate is replete with the same issues and challenges — on the type, use and ownership of data — faced by many sectors today. Arguably, though, the stakes are higher in food, farming and environment, where we still need to decide what is, in fact, material information, to ensure fair and equitable access to it, to enhance value throughout the value chain, and to help us navigate our way at pace towards more sustainable practices.
We want to explore two key areas. First, how Defra, UKRI and the levy boards could significantly reorient research and development investment in agriculture and forestry towards collaborative projects led by practitioners. Initiatives such as Innovative Farmers, ADAS’s Yield Enhancement Network and Scotland’s Rural Innovation Support Service illustrate the potential yet remain small-scale. We anticipate a higher potential public return on investment from this approach, relative to existing agricultural research and development, via improvements in productivity and reductions in environmental costs.
“I’d love to see benchmarking. We need more data. A lot of products are sold as being integrated these days, but everyone wants to sell you their own control box. Every machine is different, we need more cross compatibility.” Arable farmer, Lincolnshire.
Second, we welcome the Agriculture Bill’s moves to enable open and transparent supply chain data. This is too important to be left to individual technology companies. Farm data is vitally important in identifying the most productive and sustainable farming practices and sharing them faster. Currently many producers and distributors that can benefit from data and technology are resistant. The industry is young and there is no guarantee their investment will yield returns, or their data will remain accessible to them over the long term. As we decide which metrics matter, and as more farming data becomes available, opportunities to innovate using this data will be taken by those with the most available resource to do so, potentially driving market concentration.
Many producers we met on the UK tour have described both the benefits of data to improve practices and yield, and the risks associated with, say, committing to a single proprietary provider. Similarly, food supply chains, and particularly last mile delivery, are financially and environmentally inefficient, and are driving excessive market concentration. Innovation funding and open data standards must take this into account and create opportunities for producers operating at every scale.
