IFA Horticulture chair Mark Walsh said the increases in staff costs over the past few months are enormous and have left the horticulture sector in an unsustainable position.
“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. 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,” Mark Walsh said.
The minimum wage increased by 12% in the Budget and the announcement before Christmas on the General Employment permit will result in an initial 31% increase. The horticulture sector operates on extremely tight margins. Wage costs account for between 35%-42% of variable costs. Any increase has immediate and devastating consequences.
“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 said.
Ireland is an outlier as it is one of the only countries in Europe that does not have a permanent structured work permit scheme. The long-awaited seasonal work permit scheme has been pushed out to Q1 2025, leaving the current General Pilot Permit, which is not entirely fit for purpose, the only scheme available.
“The position of horticulture employers was clearly not considered when Minister 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. Government needs to extend the exemption for the horticulture sector on work permit pay rates which has existed for several years.”
“Furthermore, all horticulture and farmer employers were excluded from the Increased Cost of Business Scheme (ICOB), a once-off grant to help small and medium businesses offset the increase in minimum wage, as the sector is largely exempt from commercial rates. This is completely unacceptable. The Government has to address both these issues immediately or we will lose what horticulture farmers we have left,” he concluded.