Supply and demand dictate wages in agriculture, says National Federation of Farmers | weekly farm

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LAST year, Australia recorded an annual wage growth rate of 2.3% and, although this is the fastest seasonally adjusted increase since the September quarter of 2018, it is still representative of the weak and slow growth that currently characterizes national history.

However, for the agriculture industry, that figure was hard to believe with various sectors, from grain to livestock, noting significant wage increases during the pandemic.

Almost all agricultural industries have experienced labor shortages.

These shortages are more severe in some industries than others and vary from region to region and season to season.

The National Farmers Federation’s managing director of workplace relations, Ben Rogers, said that regardless of the sector, shortages had become more extreme with COVID-19-induced border closures.

“Supply and demand dictate that workers can demand more than the assigned wage and farmers have to pay it to get the job done,” Rogers said.

“But this is not a sustainable situation for farmers, who are price takers throughout the supply chain.

“Opening international borders and bringing back backpackers and hopefully increasing the number of Pacific workers under the Pacific Australia Labor Mobility scheme will no doubt help, but will not on its own solve the continuing crisis. agricultural labor force.

In the cereals sector, the CBH group experienced significant price increases for labor and transport costs.

The increase in driver wages was driven by the shortage of drivers and intensified by border restrictions, a rising consumer price index and a strong Western Australian economy.

Last year, the co-op’s new rail service agreement with Aurizon and trucking contracts were renegotiated to reflect current market conditions.

Meanwhile, WAFarmers grain section chairman and Esperance farmer Mic Fels said most large-acreage farmers were scratching their heads trying to figure out who wasn’t paying more because they were. certainly.

“Broadacre agricultural wages have increased between 10 and 20 percent over the past two years to attract and retain staff due to labor shortages,” Fels said.

“There has been a big increase, especially in casual wages, but even permanent staff have more money now than 12 months ago.”

Over the past two years, Grain Producers Australia (GPA) has been pushing the government, both state and federal, to provide more support and better results to help find the skilled workers grain farmers need at the closed.

This is something that is particularly critical to ensure workers have the skills and experience to operate heavy machinery and assist with planting and harvesting.

GPA chairman Barry Large said the support would be vital as farmers continue to recover from the shock of losing labor due to border closures over the past two years of COVID-19 .

“While GPA has advocated for support to ease these severe labor market pressures, grain farmers have also done all they can to help each other individually, including paying higher wages and creating the right conditions, as responsible employers,” Mr. Large said.

“We know there is always room for more to be done in this area, to ensure we not only attract workers to overcome recent shortages, but also create long-term career paths to attract and retain workers.

“This is particularly critical as we also compete with the high wages paid by the mining sector.”

For the livestock industry, it’s a similar story with all aspects, from shearing to meat processing, having to pay more to secure and retain workers.

Although the borders have opened up, labor shortages in the WA shearing industry are not expected to ease anytime soon as there appear to be no more shearers entering the state.

There is also a shear shortage in the east, where WA usually gets a lot of contractors.

There don’t seem to be any shearers coming from New Zealand at this point – in fact there seem to be more shearers heading in the opposite direction.

WA Shearing Industry Association president Darren Spencer said many farmers were forced to pay above the allotment rate in order to retain staff.

“The contract award rate is $3.30 per person, but there are people who pay up to $4 or more, which is at least a 20% increase,” Ms. Spencer.

“On top of that, the experienced hangar staff are paid up to $10 per run above the price, so it’s happening on all sides.

“There hasn’t been a substantial increase in the grant rate for a long time, so partly because wages are finally catching up with the market, but the rate at which it’s rising has certainly been influenced by worker shortages.”

For sheep and cattle, data from Meat & Livestock Australia (MLA) shows the impact of labor shortages on prices.

In 2017, family labor represented a cost of 37 cents per kilogram of sheepmeat, at the end of 2020 which had risen to 46c/kg.

Overall, this equates to a 24% increase in the use of family labour, which is often representative of farms trying to offset the cost of hired labour.

That said, the cost of hired labor has also increased and for every kilogram of mutton produced, hired labor has increased by 33% between 2017 and 2020.

MP’s Market Intelligence Officer Stephen Bignell said in 2022 labor shortages are expected to be a significant area of ​​concern for the red meat industry across the chain supply.

“The shortages the industry will face will encompass everything from farm and station hands, to deboning room staff at processing plants as well as truck drivers,” Mr Bignell said.

“The impacts of a labor shortage on the processing sector are difficult to predict or quantify, however, securing more staff through visa programs will be essential to secure and deliver a supply consistent and reliable in domestic and international markets.

“The current labor market is putting pressure on wage costs for red meat companies and the shortage of workers means that agricultural companies are in strong competition with the big and much bigger construction and mining industries. to find staff.

While the challenges should be constant, Australia’s farming industry offers more than just good pay.

It is also a great and healthy way of life to work the land, using new technologies and modern machinery and agricultural innovations to feed the world, while sharing a positive connection with rural people and communities.

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