The Government has announced a new median wage of $29.66 per hour to be adopted into the immigration system in February.
That’s up $1.90/hr on last year’s median and above the $21.20/hr minimum New Zealand wage.
National dairy chairman Richard McIntyre said that raised many concerns among farmers. Those unable to afford the increase would end up working more hours themselves.
"It’s $8 an hour above the minimum wage, but is effectively a minimum wage for migrant workers."
He said most new migrant farm staff were now being employed on the Accredited Employer Work Visa, which had 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 farm," he said.
"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 even 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."
Mr McIntyre said New Zealand had become a less attractive country for migrant workers, not because of pay rates, but because other countries such as Canada and Australia had fewer restrictions on pathways towards residency and reuniting families.
He said farmers would like to attract more Kiwis on farms, but it was difficult even in high unemployment to encourage job seekers to leave their family networks to go to rural areas.
Farmers were already struggling with farm working expense inflation of 16%, he said.
"It’s a struggle. Prices are high on the international market for meat and milk, but that won’t stay up for ever and we are worried about farm profitability if prices do ever come back. These increases fuel inflation for the economy at large and that’s something everyone is concerned about at this point."
Mr McIntyre said farmers were happily prepared to pay someone with five years’ experience $30/hr.
"But if it’s an entry level person without experience in New Zealand who may not apply themselves that well and may forget to shut the vat off then that’s a huge cost to pay. That’s $70,000 a year for just under 50 hours a week is incredibly attractive especially as inflation for farm workers is not that bad with accommodation, firewood and often meat and milk provided."
Finding good farm staff continues to be a challenge as rural and provincial employers compete for the same limited pool of staff while unemployment remains on its low base.
Average pay rates have risen in the sector with a Federated Farmers-Rabobank farm remuneration survey showing average incomes have grown 15% in the dairy sector, 14% in the sheep and beef sector and 7% in the arable sector.
Mr McIntyre said short-staffed farm owners were getting burned out and opening themselves to fatigue, stress and farm accidents.
"Our concern is that never-ending wage increases will add additional costs not just to farm employers, but also the downstream and upstream industries that service agriculture and businesses in the wider economy, driving up input costs and reinforcing a wage-price spiral that will drive inflation even higher. Ultimately it will be the New Zealand public who pay the price on the supermarket shelf."
