I was listening to an interesting segment on radio the other day, to a beef farmer who was commenting on the current higher prices of beef at the markets.
“It is supply and demand,” he said, “Demand is high and supply is low so the prices are better than they have been for some time.”
The same might be said for the fruit and vegetable growers across Australia. Their industry in many quarters is labour intensive. For any number of years, the industry has become accustomed to cheap, imported labour from the Pacific islands and South East Asia or people whom have been obligated to work due to visa requirements and are not necessarily doing it for the money.
But now is different. The market rates being offered for farm workers are suited to a cheap source but that is no longer the case.
The going rate for farm workers can amount to around $25 per hour, a little over the national minimum wage rate of $19.84, it is piece work that depends on how hard you work so it can be a lot less.
However, it is not the regular work that the minimum covers. It is hot, it is hard, it is seasonal and requires moving around the country to service the next crop. For someone coming off welfare, it means earning enough so that that they can cover the six weeks of no income before they can re-join the welfare payment system. On that basis, the local workers are reluctant to take up the offer.
On the other hand, if the farmers were hypothetically, offering say an unrealistic $100 per hour, they would have people lined up as far back as Bendigo wanting to take on the job of picking fruit or almost any job for that matter.
Supply and demand is a function of our economic system. It impacts on almost everything we buy and so, it is impacting on the fruit and vegetable industry.
Other farmers have had to deal with it in their own way. Dairy farmers have for several years had to deal with the increasing lack of availability of irrigation water and the rising price of it to a point where in a number of cases it has become non-viable to continue.
The cost of labour is going to be the determining factor in this year’s harvest being picked or falling to the ground.
To date, according to the National Farmers Federation, more than $38 million dollars has been lost due to lack of labour to do the work. At the same time, the Goulburn Valley has an unemployment level around 7 percent while youth unemployment is in the region of 17 percent.
In the absence of supply, demand is high and the ball is currently in the court of the workers who are looking for higher dollars to meet with the conditions that migrant workers put up with and necessarily, the farmers are going to have earnestly consider what will bring local workers into the equation.
Like the fashion model who famously said she doesn’t get out of bed for less than $10,000, the fruit pickers are going to need to be incentivised to do the same.
