Horticulture NZ CEO says industry could employ 8,000 New Zealanders if they wanted the work and could do it; Foreign workers used instead

Horticulture NZ CEO says industry could employ 8,000 New Zealanders if they wanted the work and could do it; Foreign workers used instead

By Alex Tarrant

If enough Kiwis are willing and able to work full harvesting seasons in New Zealand's horticulture sector, there will not be such a need to source up to 8,000 overseas workers a year for the work, an industry body says.

But employing motivated workers from the Pacific has allowed businesses in the sector to increase productivity and expand their operations, leading to the employment of more Kiwis in full-time positions. Kiwis were often not well placed to take on seasonal harvest work, meaning being able to employ workers from the Pacific had been a vital part in keeping businesses in the horticulture and viticulture sectors alive over recent years.

Interest.co.nz spoke to Horticulture New Zealand CEO Peter Silcock about the sector's employment of Pacific workers for harvesting work, why they were required, and what benefits they brought to the sector.

This was in light of comments made by political parties opposed to the government's welfare reform programme, which will put tougher requirements on beneficiaries to find work. This has opposition parties challenging the government on where jobs are going to come from for beneficiaries looking for work.

Prime Minister John Key has been defending his government's stance by pointing to the ANZ jobs report for January, which showed 30,000 positions available, while Work and Income received 1,300 to 1,500 vacancies a week, and had on average 3,500 jobs on offer.

And on Tuesday, Key raised the point that New Zealand's horticulture industry had to employ thousands of overseas workers a year for harvesting work as an example of an industry where there were job opportunities for Kiwis.

Harvest work

Although the majority of workers in the horticulture sector are New Zealanders, the sector's need to source extra labour for harvest seasons, which last for two to three months, has constantly raised questions of why New Zealanders are not sourced for the work.

Anecdotes abound from the industry that Kiwi harvest workers often lack the motivation and drive of those brought in from Pacific nations, who would use money earned from the work for a range of initiatives back home, such as paying for school fees, repairing community facilities or as capital to start up small businesses.

Up to 8,000 workers from overseas, mainly the Pacific, are allowed into New Zealand each year for up to seven months under Immigration New Zealand's Recognised Seasonal Employer (RSE) scheme, which was introducted in 2007. For its first year, the cap of the number of workers brought into New Zealand via the RSE scheme was set at 5,000, but this was increased to 8,000 to meet the expected increase in demand for labour to harvest projected bumper crops in both the horticulture and viticulture industries a couple of years ago.

On average, about 6-6,500 workers come per year through the RSE scheme, and the 8,000 cap has not yet been hit. In the year to June 30, 2011, 7,100 workers arrived under the scheme, according to figures provided by interest.co.nz by the Department of Labour.

Employers were signed up to receive RSE workers must show a committment to New Zealand workers first. About 140 employers were signed up to take part in the scheme.

The New Zealand Council of Trade Unions supported the scheme when it was introduced, saying labour shortage was a serious threat to business viability in the viticulture and horticultural sectors.

“If the RSE hadn’t happened some growers would have gone out of business, with consequences for New Zealand workers,” Peter Conway said in an overview of the scheme in late 2010.

And Horticulture New Zealand said the RSE programme was the single greatest improvement in the sector that Horticulture NZ had been involved in.

"The good supply of workers for harvesting has allowed growers to increase production and expand their businesses - buying more land and planting more trees. This has meant they can hire more Kiwis to work in permanent roles, for example supervising. It has also resulted in more employment opportunities in packing and freight - there have been very positive effects right through the supply-chain,” Horticulture NZ said in the 2010 overview.

Subsequent visas being granted to the same worker has been one of the key successes of the programme. “Being able to hire motivated workers who are already skilled is great for the growers,” Horticulture NZ said.

“There is still a ‘Kiwi-first’ approach to employment in the sector. Even though the economic climate is very different to when the policy was introduced, and unemployment rates have sharply increased, the Pacific seasonal workers are still needed, and the number of seasonal workers can be adjusted according to labour demands," it said.

Why can't Kiwis take the jobs?

Peter Silcock of Horticulture New Zealand told interest.co.nz that the majority of people working in the horticulture sector were Kiwis, with about 15% of the workforce consisting of RSE workers, who were mainly from Pacific nations.

Due to seasonal peaks in demand for labour, the sector needed to find people willing and able to harvest crops for the full timeframe of a harvest, which lasted two to three months. It had always been a real challenge to find these types of workers.

“What we find for instance with a lot of backpackers, is they want to do three or four weeks work, and then keep travelling. Then you have to train more people. For some of the Kiwi workers it’s like that as well," Silcock said.

“A lot of people traditionally come into this industry for specific reasons. For instance they might be university students on their holidays, or they might be parents of young families who want to earn a certain amount of money to do something – it might be to buy new school uniforms or go on a trip – and they might stop after they’ve done that,” he said.

The industry was looking for good, keen, reliable people who were going to do that work for the full season. If New Zealanders had those traits, there was certainly work available in the horticulture industry for them.

"From the industry’s point of view, if there were enough New Zealanders who were willing and able to do the work, and stayed for the season to do that, then there wouldn’t be so much of a requirement to hire the RSE workers," Silcock said.

If the government was to cut the amount of RSE workers allowed without insuring those New Zealand workers were there, it would have a big impact on the industry.

“Things are pretty tight right now. It’s not so much that without these workers stuff won’t get harvested, it’s around timing of harvest. If you harvest or prune at the optimum time, then you’ll get more productivity or you’ll get more shelf-life for your fruit," Silcock said.

“If you harvest at the wrong time, it costs you money. It’s not necessarily that the fruit’s left on the tree, it’s more the quality of that fruit will reduce,” he said.

Need to be in the right place

People needed to be in the right places for the work as well.

"If you’ve got a whole lot of unemployed people in Auckland, and we’ve got work in Bay of Penty, Hawkes Bay, Nelson and Otago, there’s obviously not a direct match-up there. There are definitely social issues around having people move away from their families and things like that," Silcock said.

“I know the Pacific Islanders are doing that, but they obviously do that voluntarily, and it’s an opportunity for them to earn some money and make things better for their community or their family,” he said.

The RSC scheme provided some certainty for employers who would know the workers were there for a certain period of time and were motivated to do the work.

“They see it as a huge opportunity to work. Some of the people coming from places like Tuvalu and Vanuatu might never have done paid work in the past at all, because they’re living on a subsistence lifestyle. Often they’ll come in community groups as well – they’ll be funding a new church or a new roof for their school between them,” Silcock said.

And it wasn't exactly easy or cheap to source workers through the RSE scheme either. Employers had to go through “quite a process” to get workers, and the number of workers they wanted, approved.

They had to pay half the airfare for RSE workers' travel to and from New Zealand, and were also responsible for accommodating the RSE workers, and providing medical care. Some employers offered accommodation to New Zealand employees as well, although there was often a different attitude amongst Kiwi workers who might prefer a more freedom from the rules for staying on a grower's property.

And RSE workers must be paid at the same rates New Zealand harvest workers would be on. Workers were paid in piece rates - per unit of output. If a worker earned less per hour than the equivalent of the minimum wage, the employer would top up their pay to the minimum wage.

"The good thing about piece rates is that if you’re willing to put the effort in, you can earn more money. We’ve got workers in the industry working on piece rates who are earning well above the minimum wage on those piece rates," Silcock said.

Studies on RSE workers showed they were earning between NZ$15 and NZ$17 an hour on average.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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yes and no....If you are in the area then yes I think declining to do such work should be a stopper for WINZ...I cant see how if you have to travel and live somewhere else on the minimum wage for 3 months  it makes any economic sense.
 
regards
 

The Islanders are used to keep wages down, the pay is horrible. Hort is a low wage industry, they could not cope without a little help.

Yes terrible. Much better to increase wages so that kiwis will deign to do the work and watch the industry shrink as people buy other, cheaper products?

Its just not the case, the wage structure is appaulling, my children have all had holiday jobs in orchards. One day its too wet, then no work till thursday, then you are on contract but it works out at below min wage. The islanders all live together one cooks they save and go home, NZ is an expensive country and apples need a low cost country which we are not and the industry has been in decline all my life.
 The dairy industry brings in Filipinoes, they pay them a basic salary and make them work 70 hours a week. I've friends who found themselves in just this position and now they work in the Aussie mines.

Sorry, my comment was a little trollish. Also its probably hard for them to keep the really useful ones.
I remember working for a few weeks thinning apples while traveling around NZ on my bike. I wanted to just make the most money possible in the time, so I worked every available daylight hour and slept in the barn next to the orchard. They really really wanted me to stay but they would have been ditching everyone in 6 weeks anyway.
All this is fine If you are a single youngun who can move around knows they can eventually get a "real" Job.
A standard of living acceptable to working NZ'ers living in NZ is not possible on fruit picking wages. We've all been led to believe our economy can sustain our standard of living when really atm It can't. 
That said the agriculture industry can't simply raise wages to fix this. it just makes more problems.

It was after a concerted effort, by interested parties, labour laws were changed, which allowed cheaper labour costs, which increased profitability, which was "priced in" to the price of orchards, debt levels now reflect the new price, and wages have been stuck down.
Folly.
Hort never used to be a low wage industry, 17 years ago I was making $9.25 p/h picking onions, and bagging potatoes, while all my mates were going back to school. 

That's my impression too. The business income goes in debt service payments rather than wages.
I cannot make any sense of rural land prices.

All to the benefit of the banks. Then land prices go up, the cost of serviceing the debt goes up, and the bank posts another 35 Billion in proffit.
 
And the band played on...

i can't work mon thru to friday because i watch reruns of shortland street and doctor phil.
saturday and sunday i study the best bets so those days are out.
if only there were 8 days in a week.

high effective marginal tax rates
 
Address this and the incentives will be right for locals to take the work - it's discussed in this other article posted here today;
 
http://www.interest.co.nz/personal-finance/58189/damned-if-you-do-damned-it-you-dont-tax-specialist-terry-baucher-recounts-twi
 
Very surprised the guy from Hort NZ didn't mention it - given it's been understood as a major stumbling block for ages.
 
 

Straight up!  I worked picking apples 15 years ago, there were no "foreign workers", the pay was a good $500+ pw after taxes.  Adjust that for (the lowest measure) CPI, and tell me what has changed?  Is it the "work ethic"?  Get real! 

$500 pw after taxes in 1997 sound like quite a bit considering that the min wage at the time was only $7/hr according to http://www.dol.govt.nz/er/pay/minimumwage/previousminimum.asp (for an adult anyway, even less for a youth). Does it mean that you worked 80hrs/week or that you were paid twice (or more) the min wage?
 
Anyway, I agree with other comments who say that it's all right if you're on location and/or young/single. But for someone with a family, especially if they have to move away from home and pay rent elsewhere for what is after all a very temporary job, I don't see how it can make financial sense (also taking into account the marginal tax rate mentioned by Kate).

Yep, it was good money, hence people wanted to do it.  As the article states, you get paid for how much you pick.  I was above average, but not the fastest.  It's seasonal work, so it should fetch a premium.  For the very reasons you state, but in a world of profit maximisation the premium goes to the business.  There is probably an economic theory that explains how it all works. 
I would still have been on youth rates at the time if it was hourly pay.  I was living large, good times.  Not sure how to verify it for you, but you could try asking around.

Skud says "Hort NZ could employ 8,000 kiwis if they paid a decent wage"

My daughter worked thinning apples this year for  Mr Apple, for the first week they paid by the tree she did 16 a day the slowest did 4, She by the end of the week was motoring along making reasonable money. On Monday she was informed that due to some being slow and earning below min wage thay had decided to pay min wage for the last two weeks, she left in discust. Then she got a job in a shearing gang, but wasted 1 1/2 hours a day driving to work for $16 an hour, except it was always wet and she needed more consistant income for Uni, ended up working for me painting my sheds, I paid her Uni fees and no one needed to pay tax, all happy.

Tell the apple growers to organise their fruit maturity to be even throughout the year.
... and the asparagus, apricots, cherries etc.
Either that or put the onus on them to provide work elsewhere in the same geographic area.
Great ideas come from those pious lawyers who rort $500/ hr from their "clients"
Fantastic cartoon in the latest Listener shows a more than podgy Paula Bennett sitting on a doric column with a ladder and rungs broken at the top
Paula holds a fishing rod with a carrot on the end and saying " Why not stand for parliament, ladies"
 

BH should talk to some of those foreign workers and see what they have to say.  From what I have heard they are brought in so the employer can make more money out of them than they could by employing a NZer.  From what is said those foreign workers are exploited so that can be achieved.

They dont like talking as they need the money back home, there is  lot of pressure from family for money to be sent, and they are scared of losing their job, which is one hell of a lot better than would get at home.
 

The minimum wage still applies, however the number I have talked to all say the say thing they work you to death....So NZers and OE's put up with it for so long before moving on, the Pacific and asians have less choice on the matter....Also they like to employ "middlemen" / supervisors who take on the risks (IRD claims etc) and paperwork for a "commission"....
What's laughble is the employers/federation say they have "improved" productivity....if the industry can only survive by working ppl like dogs for peanuts its not a healthy situation to keep going.
regards

I have worked with about 600 asians and a couple of hundred RSE employees I can say that they get paid the same as NZers under the same conditions and alot of them like to return every year even tho they miss their family etc. If it was all bad they would not return. They are there to solely fill the gaps in staffing that NZers cant or wont fill. 90% of the jobs where i worked were still NZ residents. The Malaysians earn about 4 times what they can get back home and the RSE Islanders well how to you compare $14 an hour to the nill back at home.
If the jobs could be filled with NZers then they are usually employed first as there are no language and cultural barriers, but some areas have far more jobs than local NZers can fill eg Te Puke during the kiwifruit harvest. So hence the need for extras. If Nzers who are unemployed moved to Te Puke during April  they would get at least 3 months work but few do. 

 

Fantastic discussion, it goes to the heart of what is happening in New Zealand. First up some simplistic blame the poor type responses. But then it got really interesting. Great comments about the poor wages being built into the future value/cost of the property etc.
Probably NZ Hort Industry should move to the Fishing Industry model of actual slavery. Brilliant

I think Mr Speaker had some angle on this subject not too long ago !

Hi guys, yep good discussion. A bit further to go on this one - will have a chat to some growers, and hopefully get in touch with some workers too. This was just to get things moving following the PM's comments.
Next up is the Dairy industry. Just in preliminary research, I came across this paper from Vic Uni's Institute of policy studies, which says because farming is moving towards the large-scale corporate operations from family farms, the need for foreign workers will increase.
http://ips.ac.nz/publications/files/254c2a424af.pdf
They say something similer to the RSE scheme would be good for the dairy industry.
Have a good weekend all. Hope the 'weather bomb' isn't too bad, I'm flying Auckland to Welly at 8:30 tonight, and see they've cancelled all InterIslander ferrys from 6:30pm.......should be fun.
Cheers
Alex

The recent FCV scandals in the fishing industry are a portent.
And how heavily mechanised is the fruit picking industry, by chance?

Russia is the world second biggest importer of Dairy products, its looking to be self sufficient. I would take them seriously they did the same with chicken and pork over a few years. Do we really want to encourage investment that is depentent on cheap imported labour?
>>>>>
 
http://www.agrimoney.com/news/trigon-begins-dairy-splurge-with-estonia-p...
 
http://www.agrimoney.com/news/glanbia-mulls-dairy-expansion-to-exploit-e...
 
 
'Prices will soften further'
The comments come the day after Trigon Agri, the Russian farm operator, revealed plans to become the top milk producer in Europe, including Russia.
Singapore-based cashews-to-wheat group Olam International last month unveiled plans for expanding in Russian milk production, while in Brazil, JBS two weeks ago announced the spin-off of its dairy unit to boost the business's growth prospects.
But they come amid dairy price falls which Glanbia forecast were set to continue, given strong growth in world milk production, while demand remains constrained by weak economic growth.
"The current view on global dairy market performance is that prices will soften further in the first half of 2012, relative to the second half of 2011," the group said.
"The second half of 2012 is forecast to be moderately weaker again."

And the Uk is now a net exporter of Lamb
 

UK - UK becomes net exporter of lamb
25 Feb 2012

The UK has become a net exporter of lamb, according to new figures published by EBLEX.
 
Figures show that in 2011 sheep meat exports from the UK saw an 11 per cent increase on the year, totalling 98,500 tonnes product weight. During the same period, UK sheep meat imports fell 13 per cent to 88,000 tonnes product weight. Product weight imports have exceeded exports for the vast majority of the last 50 years.
 
The rise in exports last year was mainly driven by very strong demand on the continent with a number of EU member states increasingly looking to the UK. Exports to France accounted for 60 per cent with an increase of 3.1 per cent volume. Shipments to Germany and Ireland both increased by around two thirds year-on-year.
 
Significantly, exports to non-EU markets for the period were up 41 per cent year-on-year at 5,800 tonnes to destinations such as Switzerland, Norway, various African states including South Africa and Congo, Hong Kong and other Far East markets. Further growth in non-EU markets is also expected to drive an overall increase in sheep meat exports in 2012.
 
Peter Hardwick, head of trade development at EBLEX, said: “Figures for 2011 show that the UK has become a net exporter of lamb. The UK is a major sheep meat producer, the largest in the EU and third in terms of global trade behind only Australia and New Zealand.
 
“While becoming a net exporter of lamb is a significant milestone for the industry in the UK, exports remain largely limited to trade within the EU with non-EU exports for the period representing 5% to 6% of the total.
 
“The key challenge in terms of lamb exports remains access to target markets such as China, North Africa, South Africa, Russia, the USA and several Middle East markets.  Population growth and growing affluence is presenting new opportunities for exports in developing markets in particular but these simply cannot be exploited without market access.”
 

Meat Trade News Daily Supporting British Pig Farmers

 

 

dont  you just loved the ill informed spouting on about situatuions they know nothing about.
Try being an apple grower competing with Chilean producers with an overinflated New Zealand doller to help you out. Try to understand the macro economics of the carry trade which has nothing to do with economic fundamentals but all to do with U.S treasury enabling large banks to swamp the NZ currency in cheap funding.  Blame it all on the grower trying to survive ask any banker how much growers make see them laugh about the deficits good luck you pious non performing commentators who dont emply anyone good luck to you all

Fair enough, the headline blames the unemployed for not wanting to work, the ill informed blame it on the growers for not paying enough, the orchardists blame the exchange rate, we are missing a couple more opinions but it sure sounds like a mess.
"I want to know has the answers, so I know whos ass to kick"---Obama

dug - absolutely agree with everything you've pointed out - these are all matters that the government should be acting on in order to protect our growers/producers and manufacturers. 
 
But, instead they hang you out to dry in the name of their neo-liberal doctrine/globalisation agenda - and subsequently give good people like you no option but to exploit labour as a means to (try to) derive a profit.
 
Evenutally you too will be forced off your land - a global 'entity' will acquire it and you too will end up selling your labour at a similar globally determined "price" and it will by that stage likely be much less than you are presently paying your workers. 
 
 
 
 

Thats  hitting the nail, why are our costs so high, how do we compete with low cost producers like Chile? What do we have to do to make labour intensive rural industries competitive or is it not possible? Why has other industry not stepped in and taken over from agriculture as a major employer, instead the government has stepped in and passed costs onto producers.
 Why is producer inflation running at over %7 ? Why is agriculture in decline, except for the odd real estate buble? Why is farming about capital gains, when returns are low and risk factors high? Apple growing has a high capital cost and a high labour content worst of both evils. When I started farming in the mid 80's costs were %35 of gross income, when I exited in 2007 my costs were %80 + of gross income. We will see many industries forced out of the country due to very high costs, apples, Kiwifruit, grapes  come to mind. Dairy is also going down the high cost, production to the max, stairway to hell. A profit is the gap between income and expenses and thats getting perilous in NZ today.
 A friend purchased a dairy farm in Chile last year, he paid 270k US for 670 acres, spent 100k on improvements and is getting a %20 return, very low income taxes but high capital gains tax. To compare that with here, I have a friend who just spent 360K on effluent disposal on a dairy farm returning %6.

True dug, you guys are suffering with a high nz dollar, but this 70-80c US dollar is a pretty recent occurence, so I don't think your argument is that strong. Yes it is crippling for exporeters at the moment, but when that settles back down to where it used to be 40-50 cents it will just go back to proffits and the land will cost more for the next buyer etc, etc...

In New Zealand, if you want to own a pharmacy you have to be a pharmacist. Why not have the same rule for fishing boats. If you want quota you have to do the fishing, sounds honest to me. If you want to own a Dairy farm you have to farm it yourself. Now you could say it does not work- but it works for pharmacies. So why do you need people owning and doing themselves. Because corporate farming/fishing etc simply does not work . This is explained very well and in great detail in the latest GMO newletter- Feb 2012. When will New Zealand wake up.
 
 
 

Best thing about our kids growing up in Te Puke was they could get work in kiwifruit, they earnt money sure but they also learnt that getting an education and better job was the go cause working in kiwifruit really sucked. 

dug,kate and andrewj: you all have it spot on. I am a grower and I know the value of the RSE workers. THEY ARE NOT EXPLOITED. They work hard and long for good rates of pay AND they are available every day for the length of the season.

How labour-intensive (read: non-mechanised) is horticulture in NZ as opposed to othe comparable nations?

Picking fruit is very difficult to mechanise. It has to be "eyeballed" for maturity characteristics. Most crops are picked several times as maturity is achieved. Research is being done on Near Infared (NIR) sensors to help identify correct maturity. When this technology is perfected the next step will be to mount it on a machine which will pick only the mature fruit. At present we are limited to "elevated cherry pickers" - specialist machines made in Hastings by Hydralada which enables more efficient picking of the tops of apple and stonefruit trees. We are no more or less labour intensive than other fruit growing nations, it is just the difference in the cost of the labour!
 
 

"We'd employ more Kiwi if they wanted to work".........we'd employ more if they had to work..!