Higher wages and lower prices – squeezing the juice out of the British apple?

Apples small

I always think looking at very particular markets, which are relevant to all of us, helps us gain some insight into economic questions. Here’s an example: The apple.

The apple plays an important role in British science, culture and kitchens. They are an affordable source of vitamins, particularly during the times of the year when other fruits are scarce. But only a third of the apples eaten in this country are grown here, despite the fact that the climate is ideal for a large variety of eating apples – and of course, not all apples are grown to be eaten fresh. They are also an important input into cider and a number of other processed foods from apple crumple to apple sauce.

The UK imports a significant share of the eating apples and it exports a lot of apples as well, including the cooking apple, Bramley. In addition to its production and trading pattern picking apples to eat fresh is still a very labour intensive industry. Apples should not get bruised when picked. Seasonal, manual labour is therefore very important to the industry. This means that although the apple growing industry in the UK is small compared to GDP and small compared to the whole agricultural industry, it reflects in itself a lot of issues which arise when considering Brexit.

The Financial Times used the example of a commercial apple grower in the UK to highlight the challenges this particular sector is facing and will increasingly face in a post 2016 UK (FT, 29 December 2016). The farm described in the article grows apples to eat rather than for cider, juice or any other processed foods. Consumer expectations and therefore supermarket standards are high in this sector. Bruised apples cannot be sold. This means picking apples by hand with care to avoid bruises is necessary.

To my surprise, I learnt that the eating apple market is a very dynamic market, tastes change and new varieties appear. The fact that only a third of the apples eaten in this country are actually grown here means that there is effective UK production with a high demand however production has fallen over the last 15 years or so. Why this is the case could the topic for another blog, but the pressures put on the domestic industry in the form of higher wages, potentially a less accessible seasonal workforce and uncertainties around investment into new orchards and processing plants are the same pressures that exist for many other industries as well.

Post-Brexit policies will have a direct impact on the structure of the sector, the price of apples across the whole year and the whole country, the inputs used in producing them and the local communities within which they are produced.

While this might appear like a parochial, very local example, it is these kinds of markets and basic food products within which the final results of the UK’s policies following Brexit will play out. Producers like the farm discussed in the FT’s article will not just be affected by trade deals but also by migration policies, labour standards, including the minimum wage, food safety and many other policies. And on the other hand these effects on the apple growing industry will have impacts on the amount of vitamins eaten across the UK, the health of the nation, especially those consumers who see the apple as a cheap, nutritious food.

For more information about UK apple production see:

English Apples and Pears http://www.englishapplesandpears.co.uk/apples_production_tonnes_uk.php

DEFRA Basic horticultural statistics 2014

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