Through Clima, our conversations extend all around the world, taking into consideration opinions and perspectives from a broad spectrum of people and places. As a global business addressing global issues, we believe inclusivity and diversity are equally as important. However, IGS is a UK-based company and there are specific considerations for the sectors in which we operate and provide solutions that we have to address as we consider the impacts of COVID and the approaching Brexit era.
In this context we spoke with David Swales, Head of Strategic Insight at the Agriculture and Horticulture Development Board (AHDB). The AHDB is a UK-based levy board, funded by farmers and growers. Its main function is to help farmers and growers be more competitive and sustainable in the future.
– Insights from David
Our conversation with David began on the theme of food security – a topic gaining increased profile from growers, farmers, consumers, retailers and governments alike. We were interested to know how much focus David believed this topic receives in the UK and whether it could, or indeed should, be higher up the government and consumer agenda.
His observations suggested that it hadn’t really been on the agenda for a number of years but is making its way back through general consumer awareness. It has also received renewed political interest through the Agriculture Bill in the UK, which references food security specifically. However, he also noted that the requirements for food security in this context are “quite modest”, with limited reporting necessary.
David comments: “We haven't got many things to thank COVID for, but certainly some of the challenges the government experienced getting hold of PPE and with global procurement supply chains may have made them realise that local, shorter supply chains have some benefits and that they can't take food security for granted. Since the COVID outbreak, major areas of concern around things like health and the environmental impact of food production, as well as the practical availability of food, have also dropped back into the consumer psyche.”
The wide-spread implications of COVID, and indeed Brexit, are clearly starting to have a more obvious effect on the UK’s consumer priorities. How this will impact farmers and growers, who are often at the start of the supply chain, is an area that David and the AHDB have been observing to help better inform these groups.
David explains: “Over the last few months, we've probably seen consumer trends shift more rapidly than they've ever done before and I suspect this will ramp up over the next few months. We’re seeing much more price conscious shopping going on and lots of new cooking habits emerging with a huge surge in meals being cooked at home as a result of our dine-out market being closed for months in the UK.
"We’re seeing much more price conscious shopping going on and lots of new cooking habits emerging."
“We do believe that while we emerge into a new normal the food service sector will continue to make a slow recovery, so there will continue to be a number of opportunities for home cooking from scratch and that will provide enhanced opportunities for farmers and other producers.”
"Over the last few months we've probably seen consumer trends shift more rapidly than they've ever done before."
In addition to these supply chain issues and food availability, there is an increased emphasis from consumers and governments on the environmental impact of agriculture and a need to enhance sustainable approaches, which mirrors some aspects of the Government’s 2050 plan to reach NetZero.
According to AHDB research, this growing awareness amongst consumers has been increasing over the past three or four years. David highlights that within that research there has been “a gradual building of environmental concerns. Consumers are saying that they are worried about the environment and they're concerned about the impact that food production has on the environment. Sometimes their concerns are the bits of a supply chain agency that they can see, for example about plastic packaging.”
"Consumers are worried about the environment and […] about the impact that food production has."
David cites globally popular documentaries like the BBC’s Blue Planet as having a considerable impact on environmental questions in the food supply chain, such as packaging, but he also highlights that other concerns of food availability have now been brought to the fore, in the short term at least. He does believe that there is an opportunity for farmers and growers to consider how they are responding to these concerns, including using less plastic for example, and put more emphasis on how messaging around these changes are shared with a consumer market.
This is an area of considerable focus for AHDB which is developing a new five-year strategy. David believes this provides new opportunities for farmers and growers, whilst still benefiting the bottom line and making their own businesses and industry sustainable.
While environmental challenges are truly being felt at a global level, across the UK the impacts of Brexit are becoming very apparent and demanding increased attention from the agricultural community. David highlights that as the 12-month transition period finishes in January 2021 there is absolute necessity to take action.
David highlights that this will be a “big change in our trading arrangements with the rest of the world, dependent on whether or not we get a trade deal, there will be differing effects on our industry.” He continues: “we do expect there to be increased trade friction with the rest of the world. As part of the EU we have relatively friction-free trade with other EU countries. Goods can come and go, there's free movement, and this obviously will change at some level with Brexit, with more customs checks and more bureaucracy at the border, whether or not we get a trade deal.”
He believes that this trade friction will create both opportunities and challenges, particularly for exporting businesses facing additional costs. However, from a UK production perspective, there may be enhanced opportunities to produce locally and create more competitive businesses both in the domestic market and beyond. This is what the AHDB is looking at very closely and modelling outcomes for.
The impact on labour is a clear area of concern and carries a real risk factor, David highlights. There is an expectation that labour costs will rise and restrictions placed on movement could seriously impact a grower’s returns. “Understanding and taking steps to manage and address labour costs”, according to David, “is going to be absolutely key”. This will involve maintaining current labour levels, already impacted by COVID, and planning ahead for recruiting in a more expensive market.
He emphasises that there are options for growers and farmers such as “investing in labour saving technologies”, but simultaneously highlights that with uncertainty in the system, “the capacity to make large investments is currently being scrutinised heavily”.
The AHDB is encouraging growers and farmers to make more efficient use of labour, with a focus on digital training through the LEAN programme. This enables employers to streamline processes and make labour as productive as possible. It is a critical issue and one that demands serious consideration and indeed innovation.
Automation of labour is an example of such innovation and with a strong history in automating processes and methods, David believes that the agriculture and horticulture industries are well positioned to adapt.
However, there are challenges he notes: “We're a very capital-intensive industry. The parts of the sector as a whole that typically are more labour based are those areas where it's really difficult to automate. Soft fruit production, for example, where the subtleties of the human hand are quite hard to replicate in an automated picking process. However, the technology is always moving forward.”
For the AHDB, he highlights a focus in this area: “As an organisation we've been invested in robotics and automation and the early developmental work before it gets to the commercial stage”. There is a real need for the industry to look more at the medium to long-term impacts of this type of innovation, David highlights: “we need to be thinking how do we get to a position where we can rely a bit less on labour than we have done in the past”.
"We need to be thinking how do we get to a position where we can rely a bit less on labour than we have done in the past."
Efficiency will be necessary to deliver a viable business and positively impact its economics, and David does believe that technology will have a clear part to play. There are lots of different scenarios being modelled at present and technology will help enhance efficiency for some, but it can’t exist in a silo. Innovation will also be required in terms of crops and methods of growing. To be successful, “a desire and willingness to change will be essential”, David highlights: “It is a key characteristic which we will need to see over the next few years if the industry is to prosper”.
"A desire and willingness to change will be essential."
There are challenges lying ahead for agriculture and food production – that is clear the world over. There are some more specific and nuanced challenges in the UK as we navigate Brexit. However, this is one of the oldest industries in the world and it has innovated and thrived for thousands of years and there is no doubt it will continue to do so well into the future.
For more information please visit www.ahdb.org.uk.
