These increases are attributable to rising minimum wage rates in Europe, which further exacerbate the difference in labor costs between the regions. The labor cost gap is forcing European specialty crop producers to move pro- duction capacity to these regions in order to lower their production costs. The same trend is happening in the U.S., with crop production increasingly moving to Mexico

and Latin American countries. As explained in last year’s report, the shift in the U.S. is driven largely by the increas- ing regulatory burden, with regulatory costs for certain specialty crops in the U.S. rising by more than 500 percent from 2012 to 2018. 57 The shift of production South out of Europe, and the potential re-migration of production into Western Europe, has been discussed below in Figure 26.



The trend of production moving South out of Europe is reverberated by Agrana, a leading provider of fruit solutions to the, dairy, food service, bakery and ice cream markets. Since the turn of the century, Agrana have had to move parts of their fruit supply out of Europe towards other sourcing areas such as strawberries out of Morocco, Egypt, Mexico. They have done this due to the difficulty in finding adequate labor in Europe,

and relatedly the attractive relative economics of sourcing their fruits from North Africa.

However, they have intentions to bring fruit production back to Europe where it is most consumed and intend to leverage autonomous robotic solutions in order to do so. Increasing availability and use of agriculture technology could counteract high labor cost and lack of labor availability in Europe and could bring specialty crop production back to Europe.

Figure 26: Interview with Agrana – Using automation to bring crop production back to Europe

In addition to the shift of crop production to countries outside Europe, there has been notable crop migration within Europe over the past decade. There are several examples. France has lost a significant share of its production in both lettuce and broccoli, for example (see Figure 27). 58 This is due to the relatively high cost of agricultural labor in France. Spain has gained a

significant share in both tomatoes and broccoli due to its relatively cheaper labor and best-in-class techniques in water usage, fertilizers and plant health, thereby strengthening its position as leading specialty crop producer in Europe. Meanwhile, Greece has lost production share across lettuce, broccoli and tomatoes. This has been caused by water mismanagement

57 Interview with Dr. Lynn Hamilton (Cal Poly), December 2022 58 Crop production in standard humidity | Eurostat

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