Out of workers: Horticulture asks ‘what is the Government thinking?’

“I cannot for the life of me see why a government would put in place barriers to growing an industry New Zealand is going to rely on in future.”

The speaker is NZ Apples and Pears chief executive Alan Pollard, and though he doesn’t claim to speak for the $6.6 billion horticulture export industry, he’s voicing what other leaders in the migrant labour-dependent sector think as they await formal tallies of the dollar damage wrought by Covid-closed borders.

Recent government announcements increasing the flow of workers from the Pacific under the Recognised Seasonal Employer (RSE) scheme and a six-month extension of seasonal employment and working holiday visas have been of small comfort to a burgeoning sectorthat’s grown in value by 64 per cent in the past 10 years.

“The prime minister said in November last year when launching the primary industry blueprint for the future that post-Covid, the recovery would depend on the primary sector,” Pollard recalls.

“You can’t say that on one hand and on the other put in place barriers likely to put those sectors at risk. It’s inconceivable.”

While the Government has challenged the primary sector to make a long-term plan for a transition to a balanced workforce that doesn’t heavily rely on migrant labour and embraces technology, Pollard, like other horticulture sector leaders, must look for solutions now to the loss of traditional migrant and tourist labour pools.

“Our aim is to work with the Government to find a different solution to bring a larger number of Pacific Islanders back to New Zealand.

“It makes no sense to us to bring in workers from Covid-free countries and put them into the one place in New Zealand where we know there is Covid – MIQ facilities. There has to be a better way and that probably involves a programme of vaccination as well to create that mobility of workforce.

“We certainly can’t sustain another season like this one. A number of growers have said they won’t do that.”

Just under 80 per cent of his sector’s seasonal orchard labour is migrant workers – people that will do the physically demanding work that Kiwis either won’t or can’t do, Pollard says.

The sector, which posted $920m in earnings last year and is considered the world’s best quality and most reliable apple producer, is still to tally the amount of fruit “left behind” this harvest. Pollard thinks it will be close to the forecast export shortfall of three million cartons, or 14 per cent below the 2020 result.That’s a $95m-$100m drop in export earnings.

Off orchard, in the post-harvest packhouses and cool stores where there is automation, 80 per cent of the workforce are New Zealanders.

Appropriate automation is a long way off for orchards. Apples bruise, pruning is a skilled job and robotics have yet to nail those issues at scale and cost-efficiently.

Want to make Pollard mad? Call the migrant labour “unskilled”.

“That’s nonsense. RSE workers are highly skilled, highly productive and highly valued.

“Having that workforce has allowed us to pick our crops on time at optimal value, which means better export returns and investment back into New Zealand orchards which creates more jobs here.”

There’s also a misconception that low pay keeps Kiwis away, Pollard says.

“We’re finding wages are not the driver for getting people into the industry. The Government challenged us to create as many opportunities as we could to put in unemployed people. But we found they tend to be clustered into large metropolitan areas which is not where we grow and they’re not mobile.”

Very few people took up a government offer of a $5000 lump sum for people to move region to pick fruit and stay 91 days, he says.

“People have their own accommodation and the whole whanau or family around them – they’re not going to move for six to eight weeks’ work.”

Many orchards still pay piece rates – payment for how much is picked.

In the past two years those rates have increased significantly, says Pollard.

Someone who could pick 1.5 bins an hour could earn well over $30 an hour. And in a constrained, highly competitive market, non-piece pay rates have also lifted.

In the $2.5b export kiwifruit sector, the labour outlook is grim.

Colin Bond, chief executive of national kiwifruit growers advocate NZKGI, says this season the sector had around half the usual number of RSE workers as well as fewer other seasonal employment visa holders.

Despite running its biggest ever labour attraction campaign, it struggled to source the 23,000 workers required for the seasonal labour peak from Kiwis alone.

New Zealanders make up almost all the sector’s permanent 10,000 employees and before Covid, around 60 per cent of seasonal employees, Bond says.

“To meet our ambitious growth targets we estimate we need around 1000 additional workers per year over the next five to six years, yet the pool of available labour is shrinking.

“The lack of labour will have an ongoing impact as critical seasonal tasks are delayed as the season progresses, impacting on vine management and therefore production for next season.”

Bond says most industry employers have committed to paying at least the living wage this season, while on-orchard harvest wages have typically been much higher.

Che Charteris, chief executive of horticulture developer and manager Craigmore Sustainables, says the labour shortage pressure will increase in the next 12 months as RSE workers return home, backpackers are shut out, and new conversions mature.

“[Worst] case we could be missing a workforce the size of Gisborne.

“The demand for workers is growing rapidly as we convert land use from farming to horticulture. This land-use change is part of New Zealand’s solution to climate change, improving productivity and social inequality in rural communities – but it needs a strong labour supply to be successful.

“There is a wall of work coming and this is urgent.”

Charteris says building a connection with communities to create long-term stable employment is the critical success factor for the sector’s growth.

“Proper” wages, using technology where available, changing to modern orchard designs with more plants per hectare to enable more efficient harvesting, and building orchards near under-invested rural communities where people need work were among long-term solutions.

The $2b wine export sector employs thousands of RSE workers and right now they are critically needed for highly skilled pruning work, says New Zealand Wine chief executive Philip Gregan.

The sector, which earns an additional $500m from domestic sales, would not know the loss impact of unpruned or not-optimally pruned vines for another month or so.

OUT OF WORKERS: A Business Herald Series

• The tech sector’s new pain point

• Worse than Covid: Hospitality’s battle for staff
• Kate MacNamara: Immigration and the puzzle of New Zealand’s tight labour market

• ‘Ridiculous’ shortage of MIQ spaces for construction workers
• Covid-19 highlights labour shortage in seafood industry

• Tourism: 90,000 jobs lost last year- 80,000 vacancies now
• Economic fallout and the human toll
• Solutions: What should the Govt be doing, how firms are adapting

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