Federated Farmers warn against wage increase

Farmers are worried about ‘the never-ending wage increases’ (RNZ Photo by Carol Stiles)

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Wellington, October 10, 2022

Kiwis will ultimately pay more for their food when the substantial increase in international workers’ pay kicks in from February, Federated Farmers of New Zealand (FFNZ) has warned.

The advocacy Group’s immigration spokesperson Richard McIntyre said that the government has announced that a new median wage of $29.66 per hour will be adopted into the immigration system on February 27, 2023.

“A majority of new migrant farm staff are now being employed on the Accredited Employer Work Visa, which has an hourly rate of pay requirement tied to the median wage. Farmers are faced with paying almost $30 an hour for international staff needed to perform the basic tasks on the farm,” he said.

Rural challenges

Mr McIntyre said that all industries are struggling to find New Zealanders who are willing and able to do the job but for farm employers in remote rural areas the challenge is greater.

“Farmers need people in gumboots on the ground to put cups on cows and drive tractors so that they are able to focus on the more technical and management roles on farms,” he said.

Farm employers and industry groups have been working hard to attract Kiwis to the sector but unemployment remains low and all rural and provincial employers are vying for the same limited pool of staff.

The sector has already seen large increases in average rates of pay as shown by the 2022 Federated Farmers-Rabobank Farm Remuneration survey. The survey showed that since the 2019/2020 survey-weighted average incomes have grown 15% in the dairy sector, 14% in the sheep and beef sector and 7% in the arable sector.

Get Kiwis on the Farm Programme

“Federated Farmers of New Zealand has been working in partnership with the Ministry of Social Development to deliver the ‘Get Kiwis on Farm programme.’ New workers get an industry-standard employment contract and the right gear to work safely and comfortably on the farm. But it is still not enough when there are thousands of agriculture work vacancies,” Mr McIntyre said.

He said that the concern of the farmers is the ‘never-ending wage’ increases will add additional costs, not only for farm employers but also for the downstream and upstream industries that service agriculture and businesses in the wider economy.

“Wage increases will drive up input costs and reinforce a wage-price spiral that will drive inflation even higher. Ultimately, it will be the New Zealand public who will pay the price on the supermarket shelf. There are additional concerns that as labour becomes unaffordable farmers try to do all the work themselves, ultimately leading to fatigue, stress and on-farm accidents,” Mr McIntyre said.

Source: Federated Farmers

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