Farmers: visa slaves better than paying a living wage

Amid the conga-line of evidence showing that temporary migrants have been ruthlessly exploited on Australia’s farms, which has frequently been labelled “modern slavery”, the Australian Workers Union (AWU) has lodged an application with the Fair Work Commission to amend the Horticulture Award to guarantee a minimum casual rate of pay for all farm workers.

As expected, the agricultural industry has hit back, claiming that implementing a minimum rate of pay would force up fruit and vegetable prices:

In the lead up to this week’s hearing farmers have been vocal opponents of any changes to the award rate – with some arguing a floor in the minimum pay rate would be burdensome and result in an increase in prices for customers…

The National Farmers Federation said piece rates incentivised and awarded productivity, noting that almost half the industry uses them.

“Employment is the No.1 expense for many growers, at as much as 66 per cent of their operating costs”… NFF CEO Tony Mahar said.

He sought to separate the underpayment of workers with the piece rate structure, arguing that the worker exploitation in the industry is unrelated to the rate of pay.

However, supply chain experts say it is “unfair to place the blame” of increased prices on workers who want a liveable wage:

Dr Michael Callaghan, lecturer in ethics and sustainability at Deakin University, told The New Daily the horticultural industry’s inability to pay its labour force properly, showed the industry was “unsustainable”…

“Primary producers need to look seriously at not making their profit from their employees, but taking care of them. That will make the industry stronger in the long run.”

At this point, it is important to cast our minds back to the 327-page report from the National Agricultural Labour Advisory Committee, released in March, which explicitly admitted that the agricultural industry’s overreliance on cheap migrant labour is bad for productivity and unsustainable:

Australia’s main competitors in agriculture are either ahead or running very close. In many ways, Australia is at a crossroads. Either its enterprises go all out to modernise by learning and adopting new methods, or they fall behind the others, occupying increasingly uncomfortable niches, relying on inadequately trained, low productivity workers, using the same old approaches that worked yesterday, and then finding themselves in a situation where business as usual has suddenly turned into business in decline…

Without such easy access to cheap, exploitable migrant workers, Australia’s farms would be forced to raise wages to attract local workers. These higher wages would, in turn, encourage farms to seek out labour-saving technologies and automation, thereby raising the productivity.

Indeed, with Australia’s border closed and the foreign worker tap shut off, we have already witnessed multiple examples of Australian farms undertaking productivity-enhancing investments in labour saving technologies, thus proving our point.

Sadly, the Morrison Government’s recent decision to give farmers easier access to cheap, exploitable migrant workers from South East Asian Nations via a dedicated agricultural visa will undermine future investment by keeping wages artificially low, reducing incentives to automate.

The ultimate outcome will be the opposite of the recommendations from the National Agricultural Labour Advisory Committee above, which wants to see farmers “go all out to modernise by learning and adopting new methods”. Instead, the expansion of “inadequately trained, low productivity workers” will dilute the capital base and cause farm productivity to stagnate.

Unconventional Economist
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  1. In what country are seasonal horticultural labourers paid a living wage? This isn’t just an Australian problem.

    1 in a 100 seasonal fruit pickers in the UK is British:

    The issue is its always cheaper to use someone who comes from a lower wage country to do this type of work – they need a lower wage to support their offshore family than an Australian (example Uber eats / deliveroo riders remitting funds to Philippines / China). Especially when you house them collectively in accommodation a local would refuse.

    “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”
    I think if we are going to make a scheme out of it my preference is that we support the Pacific Islands rather than temp workers from Asia.

  2. Dr Michael Callaghan’s claim that the horticultural industry’s inability to pay its labour force properly shows that the industry was “unsustainable” is spot on.

    This is a complex issue with no easy quick-fix answers, certainly not ‘more innovation and automation’ the tiresomely repetitive catch cry of MB. The sad fact is that factory farming has destroyed soils and farm land the world over for the last 300 years, with topsoil and aquifers disappearing at a frightening rate while farmers now confront an ever deteriorating and erratic climate. The only way farms have been able to keep producing for decades now is with ever more costly applications of fertilizer and chemicals, the soil having been reduced to lifeless dirt – a medium to hold roots, but provide no nutrition. God help the world if oil and gas become scarce as we’ll witness mass starvation on a scale never seen before.

    There is a solution to paying farm workers a decent wage – increase food prices to those comparative to the 50s & 60s. City people have no conception of what is involved in bringing food to the cities, particularly in Australia which has paved over it’s thin coastal strip of fertile soil and is fast running dry.

      • It now takes 10 calories of oil to produce one calorie of food. More mechanisation and automation is hardly going to fix that. And many are saying oil has peaked.

        We sold off our oil by the early 2000s, have let our refineries fold, have only 2-3 weeks storage, and few friends in the region.