The shutdown of the UK’s hospitality sector because of coronavirus is causing huge problems for food producers.
Unless you’ve got a contract with a major retailer or can quickly find an alternative local outlet for your products, the likelihood is that your normal business has disappeared overnight.
The importance of the hospitality trade cannot be overestimated, especially in an area like Cornwall which is so dependent on the visitor economy. Many of our wholesalers, food processors and smaller suppliers depend on hospitality and tourism for at least 80% of their trade.
Eating out accounts for more than a fifth of all beef sales; 15% of lamb and 13% of potatoes. And more than half of all food service ‘visits’ to a restaurant, café or pub, involve dairy in one shape or another, whether in your ice cream, your cheese platter or your flat white.
And now, overnight, most of that demand has vanished. Prices are plummeting as stocks mount up. Some farmers report having to pour milk away. Animals are stuck on the farm, costing money. Export markets have disappeared.
And there is a looming crisis in the fields. Movement restrictions, concerns about cross border travel, and a lack UK-based workers filling farm-based roles mean there isn’t enough labour to pick and sow crops. Before Brexit, around 99% of the UK’s 60,000 seasonal workers came from the EU.
I know of one Cornish grower that employed 20 staff last year. The business has 45 tonnes of fruit growing in the fields. So far two staff are signed up for the summer season. Another veg grower was counting on 100 seasonal workers coming from Eastern Europe. That won’t happen now.
Even though there have been high levels of local interest from people who have been laid off or furloughed to fulfil these roles, that initial interest has not translated into anywhere near the number of people required.
The meat trade has been badly hit as well. Abattoirs need all their staff to run production lines but the Government’s furlough scheme doesn’t work for them or other production line businesses. The only choice they have is to furlough all staff for three weeks at a time, or choose to furlough some but not others. What many want is to operate a few days a week or one week on, one week off, but they can’t.
This has significant implications to livestock farmers across the region, as well as butchers, farm shops and other local food outlets. If this local supply chain dries up consumers will begin to see supplies tighten which will increase the demand on other outlets such as supermarkets who are already sourcing meat on a global basis. It would be an unwelcome and unfortunate outcome of the Covid-19 outbreak if it resulted in local meat supply chains being frozen in favour of imported meat.
We’ve also seen a change in consumer buying habits. People are watching their spending and tending to buy the basics, so meat processors are selling cheaper cuts having seen demand for things like steak and fillet evaporate when the catering trade stopped. They’ve also lost export markets for offal. All this has contributed to growing losses per animal processed.
Why does all this matter? The danger is that when recovery eventually comes the supply chain will have been so damaged that the speed of recovery will take much longer than it should, and many businesses may not survive the transition. That’s why we’re lobbying government for help right now.
Top of the list is a relaxation of furlough rules to allow producers to be more flexible. I know of one supply business that has had to furlough staff and has used all its stock. They have just won a large order which could make the difference between survival or not, but they cannot fulfil it because they aren’t allowed to bring their staff in on a part-time basis.
The Government needs to help producers to sell their produce to local communities, and highlight the vital role that farm shops, village shops and other local food suppliers fulfil, especially in rural areas. A package of support announced last week for the fishing industry includes £1 million to help fishermen sell their catch locally. We need more of that please.
Coronavirus has highlighted the fragility of global supply chains, and the UK imports almost half its food. Brexit will further impact, so let’s invest now to create, literally, a stronger home-grown industry.
And policymakers need to wake up to the interdependence of key parts of our economy. In Cornwall, farming and food production (agri-food) account for over 9% of all jobs (21,600 people) and is one of the biggest contributors to the economy. It’s also what keeps our landscape managed and beautiful as 80% of Cornwall’s land is farmed.
But our agri-food industry is hugely dependent on a thriving visitor economy, accounting for 80% of trade in many cases. With the Easter season already lost, grave concerns about the summer and fears that pubs, cafés and restaurants could be among the last to emerge from lockdown, the impact on Cornwall’s 5000-plus agri-food businesses is going to be huge.
So too on Cornwall’s 4,700 tourism businesses, which support 33,000 jobs, or almost one in five of all jobs in Cornwall. The Government has provided immediate support in the form of grants but if we lose the summer they will need much more help to survive the lean winter.
If we get this right we could emerge from this with a more circular economy that is lower carbon with fewer food miles, and is stronger in the long run. We cannot countenance getting it wrong.
Mark Duddridge is chair of the Cornwall & Isles of Scilly Local Enterprise Partnership and has spent his career in the food industry.