Scots fruit and vegetable growers could be pushed out of business as a result of the new National Living Wage, warns NFU Scotland.
The farmers’ union says the wage, which comes into force next April, could result in growers’ margins being completely eroded unless retailers pay more for their produce.
The warning comes following a meeting of specialist growers at the union’s head office at Ingliston, near Edinburgh.
“Growers in Scotland compete directly with farm businesses in England as well as the rest of Europe and wages can represent more than 40% of the operating costs of such a business,” said the union’s chief executive, Scott Walker.
“The living wage will see any profit margin eliminated unless Scottish growers can recover the extra cost they face through the products they sell. If this doesn’t happen, then there will be less Scottish fruit and vegetables produced.”
He said the Scottish Agricultural Wages Board (SAWB), which is currently under review, was putting Scots farmers at a disadvantage to their counterparts south of the border.
The board was no longer needed, added Mr Walker, and wages could be determined by the National Minimum Wage and a National Living Wage for those over 25.
The union is now calling retailers to take into account wage costs when paying farmers for their produce.
Mr Walker said: “The dysfunctional supply chain and the price pressure being heaped on all farm businesses at this time makes attracting and keeping staff a genuine challenge as the rewards for the risk involved in farming are simply not there.
“The supply chain needs to recognise that what they pay for farm produce is the biggest determinant of what a business can afford to pay its staff and any sensible sourcing commitment from retailers needs to address this issue.”
He said the union would be meeting with retailers to discuss farmers’ concerns and it also planned to take politicians out on to fruit and vegetable farms to explain the impact of the wage proposals on Scots growers.