Irish Farmers' Association (IFA) horticulture chair Mark Walsh has warned that rising staff costs have squeezed fruit and vegetable growers’ already tight margins after the latest increase in the minimum wage.
The 12% increase in the minimum wage in Budget 2024 added substantially to costs in the fruit and vegetable sector, with labour typically amounting to around two-fifths of variable costs on horticulture farms, according to the IFA.
“It has been a relentlessly difficult period for the sector, from Brexit, the COVID pandemic, spiralling input costs from the Russian invasion of Ukraine and now unexpected wage increases,” Walsh said.
“This is effectively the fourth major hit for growers in recent years. Undoubtedly, there will be further casualties in a sector that has already shrunk massively over the past 10 years.”
Wage increases associated with employment permits for overseas non-EU workers has also hit veg growers’ variable costs, the horticulture chair continued.
“Although the provision of 1,000 additional work permits is positive, the revised salary roadmap is unworkable and will have crippling consequences.
“For a farm to advertise at €30,000 for new, possibly less-experienced employees would be effectively like setting a new minimum wage for the sector and will likely drive up pay demands for all other existing staff,” he commented.
Walsh criticised Government for failing to introduce a permanent and structured work permit scheme, with the “long-awaited” permit scheme which has been pushed out to Q1 2025.
“The position of horticulture employers was clearly not considered when Minister of State Neale Richmond made the shock announcement to massively increase salary levels for work permit employees.
“No meaningful consultation took place with the horticulture sector prior to the increases,” said Walsh.
The exclusion of farmers and horticulture growers from the Increased Cost of Business Scheme brought in to assist small- and medium-sized businesses adjust to the new minimum wage rates was also criticised by Walsh.