Labor supply issues and oversupply of produce are causing “hard” economic times for farmers



We all love a good deal, but have you ever wondered how much you should pay for your food to make the person who produces it make money?

Recently, avocados have been advertised for as little as $ 1 each, which is great for buyers but not so good for growers like Russell Delroy.

Mr. Delroy has been cultivating avocados in southwest Western Australia since the late 1980s, long before they were all the rage.

In the years that followed, and probably thanks to the popularity of dishes like “smashed avo”, many other growers also planted avocado trees.

The fruits of their labor have now been reaped and this year will contribute to an overabundance of avocados.

Russell Delroy has been cultivating avocados since the late 1980s.(

ABC News: Eliza Borrello

)

Combine that with a lack of backpacker workforce, thanks to the coronavirus pandemic Mr Delroy has spent the past two years battling a horticultural storm.

“We are heading towards oversupply and very tough economic returns and on top of that we have had all the complications of labor supply, labor supply to be able to harvest and processing our crops has been incredibly difficult, ”he said.

Labor costs are very high

To complete this year’s harvest, Mr. Delroy paid to bring in 70 workers from the Pacific Islands as part of the Commonwealth’s Seasonal Workers Program.

According to the Western Australian government, it costs between $ 7,500 and $ 8,500 to accommodate each quarantined worker at the hotel.

A woman stands in a fruit packing shed.
Tongan national Meleane Moniati says she will use her salary to pay off a loan and support her family back home.(

ABC News: Eliza Borrello

)

Producers contribute $ 2,500 and the state uses taxpayer dollars to cover the rest.

Producers also cover about half of each worker’s place on government-run round-trip charter flights that cost about $ 3,000 per person, with workers covering the difference.

For Mr. Delroy, that meant a total expense of $ 400,000, including $ 175,000 for hotel quarantine, $ 105,000 for thefts and $ 120,000 in salaries for a new staff member to manage. the workers.

This is before he pays the workers’ wages and pensions.

So, back to the question of how much should consumers pay for producers to make money?

According to Mr. Delroy, at $ 1 a lawyer he loses money, at $ 1.50 he breaks even and at $ 2 he makes “very reasonable profits.”

Green avocados hang from a tree branch.
At $ 1 a piece, avocado growers aren’t making any money.(

Provided: Russell Delroy

)

Why can’t farmers find Australian workers?

In 2020, amid the COVID-19-induced backpacker shortage, the Washington state government launched an advertising campaign to encourage city dwellers to take up jobs in the regions.

The Work and Wander Out Yonder program included an accommodation discount of up to $ 3,360 and various travel allowances for workers moving long distances.

Thanks to the program, Mr. Delroy hired several long-term unemployed, but they did not last long.

“I really felt for some of those long-term unemployed who were really trying to get back into the workforce,” he said.

“Usually they lasted three or four days and found the work to be rather difficult and expensive… a lot of it is mental health and a lot of it is drugs.”

Five harvest workers stand behind a garbage can full of avocados.
Some of the workers who helped with this year’s harvest at Russell Delroy’s Pemberton Orchard.(

Provided: Russell Delroy

)

Aside from the long-term unemployed, Mr Delroy believed few West Australians were looking for work.

“Right now in Western Australia we have a booming economy and we have an unemployment rate of less than 5%, so there is actually relatively little unemployment,” he said.

He said that in Australia young people have access to “all kinds of professions and more highly skilled jobs”.

“There are so many opportunities, you know the idea of ​​wrapping avocados in a tray, eight hours a day, five days a week, six days a week, is probably not very appealing.”

University of Washington human geographer Fiona Haslam McKenzie said the trend towards depopulation of regional and urban Australia that began in the mid-1980s had also played a role.

“A young person living in the city who could be on extended university vacations or on school vacation, he will perhaps leave a job market which is probably quite lucrative in the city, he lives at home, if he is renting in the city, [there’s] very unlikely that they could be attracted for relatively short periods of time, ”she said.

A woman stands in a leafy university garden.
Fiona Haslam McKenzie says Australia has long seen a trend of depopulation from regional areas to cities.(

ABC News: Eliza Borrello

)

To guard against the difficult job market, Mr. Delroy has invested in robotic packaging machines and plans to eventually use robotic preparers.

“We plan to cut 80% of the workforce we currently use at this point. [packing] site, ”he said.

Have we underestimated the contribution of backpackers?

As a result of COVID-19, the number of backpackers in Australia has dropped from around 140,000 to just 30,000.

In the southwestern town of Manjimup, Ed Fallens houses seasonal workers from Vanuatu in what is typically backpacker accommodation.

A man stands behind a bar.
Tall Timbers Accommodation Managing Director Ed Fallens said Australians should appreciate the contribution of backpackers.(

ABC News: Eliza Borrello

)

He hoped COVID-19 would help Australians value the contribution of backpackers to our economy.

“The old adage of ‘Australia is riding on the back of a sheep’ is now that they have ridden on the backs of backpackers, they have been the backbone of the past 20 years and they have done a magnificent job,” did he declare.

Under the recently signed UK-Australia Free Trade Agreement, UK backpackers will no longer have to complete the 88 days of agricultural work required for a second-year working holiday visa.

But Federal Agriculture Minister David Littleproud is not counting on a resurgence of backpackers from other countries once COVID-19 restrictions are lifted.

Instead, the government announced a new farm visa, saying it would build on Australia’s highly successful seasonal worker and Pacific labor programs, adding that they are now the government’s “main method” to deal with shortages of agricultural workers.

An avocado orchard from above, in a golden light.
Russell Delroy’s Orchard in Pemberton, Western Australia.(

Provided: Russell Delroy

)

Littleproud said the agricultural visa would include a path to permanent residence for skilled, semi-skilled and unskilled agricultural workers and would target countries in Southeast Asia.

Most importantly, he said he would remain separate from the Pacific work regimes, meaning workers in Pacific countries would not be offered permanent residency.

“But it’s an important time for us to use this [Agriculture Visa], to bring about a structural change to the workforce in this country and to ensure that those who work there want to be part of our regional communities.

“We want to make them citizens, we want them to [people coming on the Agriculture Visa] come to Australia and get permanent residency and be a part of these little country towns, make the fabric of these little country towns – not just pass through. “

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