Brexit farm trial: ‘I really like the work’

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Anastasia

Anastasia Savchenko was at agricultural university in Kharkiv in Ukraine when she saw a Facebook advert for a job picking courgettes on a farm in Cornwall.

The process of being interviewed and receiving her six-month work visa took about six weeks.

She is among 30 workers from non-EU countries who recently started at Cornish farm Riviera Produce as part of a Home Office trial.

In total, 2,500 people from Ukraine, Moldova and Russia have been recruited for seasonal work on farms from the South of England to Scotland.

“I came here to earn money so I can start a business, a little shop with children’s clothing and things for new mums”, 31-year-old Ms Savchenko says.

“We really like the work, although to start with it was a bit bumpy because of the weather. There’s plenty of time to meet friends, to go to town and the seaside”.

Ms Savchenko believes her compatriots hope the trial will continue in future.

“People in the Ukraine are hoping they’ll have the opportunity to come and earn money and get somewhere in life, because the situation in Ukraine as regards work is quite hard.”

Micha
Image caption‘We can earn money here,” says Michailo Sudak

Michailo Sudak, who used to be in the Ukrainian army, is on the same visa as Anastasia.

He wanted to try new opportunities and found out about the job through a friend: “It’s good for us to be here because we can earn money here, to buy flats or a car when we go home. Because in Ukraine, it’s impossible to do”.

He found the visa expensive. But he likes the job and would consider returning.

‘We can’t get local people’

David Simmons manages Riviera Produce, the farm in Cornwall where Ms Savchenko and Mr Sudak are working.

He used to rely on migrant workers from EU countries such as Poland and Lithuania to pick his cauliflowers, courgettes and brassicas, then more recently Romania and Bulgaria.

But in the past two years, their home economies picked up and the exchange rate became less favourable. Fewer have wanted to come.

Mr Simmons also believes uncertainty over Brexit has put them off. “We cannot get local people to come and harvest the crops.

“Without having these migrant workers the horticulture sector is dead. Last year in Cornwall there were crops that weren’t harvested because there weren’t enough staff,” he says.

farm
Image captionInterest in the farm workers visa pilot is “phenomenal”

The Home Office pilot Ms Savchenko and Mr Sudak are on is a test of how a visa based immigration programme for seasonal farm jobs could work.

Two companies, Pro Force and Concordia, run the scheme’s recruitment. Sorting visas for so many people was challenging, but has been achieved. Hundreds are already in the UK working.

Stephanie Maurel, Concordia’s chief executive, said interest in the scheme from potential workers was “phenomenal”.

“We could have filled the visas we had three times over at least,” she says.

The pilot is not designed to provide all the workers the horticulture sector needs.

farm workers
Image captionSome hope the visa scheme will be expanded

However, the National Farmers’ Union says it could help solve growers’ recruitment problem. It is asking the government to drastically expand the scheme to 30,000 workers next year.

Mr Simmons is also keen for the scheme to be expanded: “Hopefully it’ll demonstrate to the government that the scheme will work and can be rolled out.

“We’ve got the work here for them, it brings them in on a visa so they’re restricted to come to our farm, and it’s a win-win situation for all concerned”.

The Home Office says it will “keep the scheme under review to assess how successful it has been”, adding that this will help determine longer-term arrangements.

It is also engaging with the wider agricultural sector as it looks to design the UK’s future immigration system.

MILAN/PARIS (Reuters) – Fiat Chrysler has made a “transformative” merger proposal to Renault, the Italian-American carmaker said, in a deal that would create a new third-ranked global manufacturer.

The plan, finalised in overnight talks with Renault, was being discussed at a meeting of the French group’s board early on Monday, and sent shares in both companies sharply higher.

The deal would create a carmaker selling 8.7 million vehicles annually with a strong presence across key regions, automotive markets and technologies, FCA said. It would generate 5 billion euros (4.40 billion pounds) in estimated annual savings.

The “broad and complementary brand portfolio would provide full market coverage, from luxury to mainstream,” FCA added.

If successful, the tie-up would alter the competitive landscape for rival carmakers from General Motors to Peugeot maker PSA Group, which recently held its own inconclusive talks with FCA.

It could also have profound repercussions for Renault’s 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year.

Milan-listed Fiat Chrysler shares jumped 19% in early trade, while Renault stock leapt 17%. PSA shares fell 2.5%.

“FCA fits as well with Renault as it does with PSA,” Jefferies analyst Philippe Houchois said in a note after news of the deal talks broke.

The FCA-Renault plan would see the two carmakers merged under a listed Dutch holding company. After payment of a 2.5 billion-euro dividend to current FCA shareholders, each investor group would receive 50 percent of stock in the new company.

It would be chaired by John Elkann, head of the Agnelli family that controls 29 percent of FCA, sources familiar with the deal talks told Reuters. Renault chairman Jean-Dominique Senard would likely become CEO, one said.

FCA-Renault, like almost every possible automotive pairing, had been studied intermittently for years by dealmakers. But the fractious relations between Ghosn and FCA’s late CEO Sergio Marchionne made constructive merger talks impossible until after Marchionne’s sudden death last July, banking sources said.

Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and expensive new technologies being developed for connected and autonomous vehicles.

“The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry,” FCA said.

But the deal still faces political and workforce hurdles in Italy, and potentially also in France. Most of FCA’s European plants are running below 50% capacity.

Fiat said the planned cost savings would not depend on factory closures.

“The market will be careful with these synergy numbers as much has been promised before and there isn’t a single merger of equals that has ever succeeded in Autos,” Evercore ISI analyst Arndt Ellinghorst said in an email.

Investors are likely to remain wary of the execution risks of a French-Italian-U.S. tie-up, he added, “even with fewer big egos involved”.

The French government, Renault’s biggest shareholder with a 15% stake, supports the merger in principle but will need to see more details, its main spokeswoman said on Monday.

France will be “particularly vigilant regarding employment and industrial footprint,” another Paris official said – adding that any deal must safeguard Renault’s alliance with Nissan, which had recently rebuffed a merger proposal from the French carmaker.

The Italian government may also seek a stake in the combined group to balance France’s holding, a lawmaker from the ruling League party said on Monday.

Anticipating such sensitivities, FCA stressed “new opportunities for employees of both companies” under the merger.

“The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital-efficient investment in common global vehicle platforms, architectures, powertrains and technologies,” it said.

Nissan, which is 43.4%-owned by Renault, would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented on Monday.

Trader
Image copyrightGETTY IMAGES

Some of the world’s biggest investors are so worried about the future of the global economy that they have taken the extraordinary step of paying for governments to look after their cash.

They are nervous about a no-deal Brexit and the ongoing trade war between the US and China, as well as signs of a slump in demand in Germany, Europe’s economic powerhouse.

In times of crisis, investors usually flock to so-called safe-haven assets like gold, government bonds or good old fashioned cash.

But for big investors, like pension funds, cash isn’t practical and gold is considered risky.

That has driven them toward government bonds and, unusually, investors are paying to hold them.

What are bonds?

In order to raise cash – to pay for everything from big infrastructure projects to covering the cost of their own debt – governments borrow money.

One of the ways they do that is to issue fixed-term bonds, under which companies and individuals lend a set amount of money to the government, which promises to pay interest every year until it returns the total amount borrowed on a pre-agreed date in the future.

Or, at least, that how it’s supposed to work.

Countries that are considered to be good borrowers, like Germany, will pay less interest than risky debtors, like Argentina, which is considered more likely to renege on its IOU (I owe you).

Some big investors, such as pension funds, are limited to how much money they can put into riskier assets, which – twinned with a negative interest rate in Europe – has made bonds issued by the likes of Germany, France, Switzerland and Japan a very attractive purchase.

For example, the overwhelming demand has sent the interest paid on 10-year German bonds crashing to minus 0.65%, meaning investors will make a loss if they lend money to Berlin.

What does a negative bond yield mean?

In effect, investors are paying governments to borrow their money – and that does not bode well for those hoping for economic growth.

It means that people who make a living from predicting what economies will do in the future, are betting on interest rates remaining negative for at least ten years.

And, worse, the 0.14% yield on 30-year German bonds suggests that investors are expecting interest rates to stay in the red for the next three decades.

Tristan Hanson, who invests in bonds for M&G, says the current German bond price shows a “high degree of risk aversion” in Europe, where investors would rather accept a loss on holding their money than buy an apartment or invest it in stock markets.

“They are saying: ‘I’d rather have a guaranteed small loss than risk a big loss in some other asset class’,” Mr Hanson explained

Open bank vault
Image copyrightGETTY IMAGES

Why not stick to cash?

For big institutional investors, cash is costly because they can’t just put it under the mattress, according to Hargreaves Lansdown analyst, Laith Khalaf.

“I could build a massive secure basement and keep all my cash in that,” he said.

“But actually that’s quite expensive and if interest rates return to normal, I’m going to have an empty basement.”

Big investors don’t tend to keep their assets in a bank in case that bank fails, he added.

“If institutional investors are putting £30m in a bank, it means they have a lot of risk if that goes under,” Mr Khalaf said.

Big investors also like to hedge liabilities by buying bonds, he said. A pension fund that knows its pensions in 20 years will cost a certain amount will buy bonds that it expects will let it meet those obligations.

He said the negative bond yields reflected broader economic woes.

Are investors panicking?

Will Hobbs from Barclays’ investment arm believes investors’ worries are overblown, saying the economy “doesn’t look that bad”.

He said the fortunes of the global economy were tied to the US, which “looks healthy”.

“All economies are perfectly capable of starting a fight in an empty room.

“But the big recessions they tend to be driven by the US economy and what happens there,” he said.

Gold in Bank of New York
Image copyrightGETTY IMAGES

He said the negative bond yields had driven some investors to buy up gold, pushing prices to a six-year high.

But the investment boss warned people to be careful of buying the precious metal.

He said it’s “very difficult to value”, adding, “there’s a huge amount of emotion invested in the price”.