Farm worker wages could increase as fruit, veg prices jump, report warns

Labour shortages could force farmers to pay workers higher wages as farms go head-to-head to secure staff, ABARES latest report indicates.

FARMERS could be forced to pay their workers more if seasonal labour shortages persist throughout summer, according to a new report.

The latest ABARES commodities forecast warns that labour disruptions due to the coronavirus pandemic could see a survival of the fittest: smaller harvests will mean higher fruit and vegetable prices – leading some producers to pay higher wages to attract workers.

The report, released today, comes amid ongoing warnings from the agriculture sector that upcoming horticulture and crop harvests are at risk due to worker shortages.

Travel bans have seen the number of backpackers and Pacific Island workers – both relied upon for seasonal fruit and veg harvests – plummet, while state border shutdowns have stopped harvest contractors moving across country for the winter crop harvest.

The ABARES September report says border travel restrictions are “unlikely” to greatly impact grain harvests; however, seasonal labour shortages will have a “significant” impact if they occur in late summer to early autumn, when many states have a number of fruit, nut and vegetable harvests.

“If labour shortages reduce harvests, fresh produce prices would increase,” the report stated.

“The prospect of higher prices may encourage some producers to increase wages to secure additional domestic labour.

“Farms would also compete for the limited labour supply, and provided the movement of agricultural workers is largely unimpeded, workers would shift to higher productivity farms.”

Meanwhile, ABARES modelling shows the ongoing pandemic could slash almost $4 billion from agriculture’s bottomline in the coming year.

Agriculture production is predicted to be valued about $61 billion for 2020-21; however, scenario modelling indicates that figure could drop as low as $57.5 billion if periodic outbreaks and lockdowns occur in Australia and globally, reducing consumer spending, increasing unemployment and disrupting supply chains.

On the upside, a faster than expected economic recovery from COVID-19 could see agricultural production reach more than $63 billion.

ABARES executive director Steve Hatfield-Dodds said agriculture appeared to be less disrupted than other sectors, though labour supply and the appreciating Aussie dollar were “watchpoints”.

Grain production is expected to rebound to its highest levels since 2017, but those gains will be almost completely offset by a 14 per cent drop in livestock production to $28.9 billion due to herd rebuilding.

The export value prediction has been revised down by 10 per cent, to $43.5 billion, as the pandemic reduces demand for ag products. Wool prices are forecast to drop 25 per cent, wheat and barley down 21 per cent, and canola 12 per cent.