Recession Hits Incomes But Future Is Bright

NEW ZEALAND - While the international recession has impacted growth of agricultural wages and salaries, the 2010 Federated Farmers/Rabobank Farm Employee Remuneration Report shows farm workers are still considerably better off than their urban counterparts.
calendar icon 1 February 2010
clock icon 3 minute read

“Agricultural wages and salaries seem to reflect the roller coaster year that employers have faced,” says Don Nicolson, President of Federated Farmers.

“Working on a farm remains a top-paying choice in what is truly, the world’s biggest industry. I’d seriously encourage anyone looking for a personally and professionally fulfilling career to go farming.

“At $48,388 per annum, the total package value (TPV) for the average farm worker was $5,227 more than the average personal (mean) annual wage and salary income. Clearly you’re much better off on-farm than in a factory. More so as managerial positions paying north of $80,000 are available.

“Agricultural wages and salaries have kept touch with the prevailing rate of inflation, which has been 2 percent over the period we measure. But that said, the TPV did increase at twice that rate. I still feel that our workers have tightened their belts every bit as much as we have as employers.

“While domestic stimulus has definitely helped people ‘get through’ the recession, it’s done little for exporters. The opposite in fact, as we’ve faced a high dollar with increasing pressure on interest rates to rise sometime over 2010,” Mr Nicolson added.

Ben Russell, General Manager Rabobank New Zealand, agrees the international economic crisis has impacted rural wages and salaries.

“It’s been a very tough year for farm employers and that shows through in these wage increases,” says Mr Russell.

“The dairy sector, which arguably suffered the wildest fluctuations over the past year, saw wages and salaries increase by an average of 2.1 per cent and 4.4 per cent in respect of the TPV. This rate of wage and salary growth is only one-third of what it was in 2009.

“We’ve also seen a role reversal over the 2009 survey, as sheep and beef employees got increases twice the average recorded for their dairy counterparts. With an average increase of 4.4 per cent for wages and salaries, it’s also double that recorded back in 2009. The TPV increase at 3.3 per cent, however, was in line with last year’s survey.

“Yet it’s workers in the arable sector who have again recorded the highest average wage and salary growth of 8.1 per cent, with a 10.3 per cent increase in their TPV. The real pressures on arable employers has seen the rate of wage growth fall sharply over what it was in 2009.

“There has also been a fall in the level of remuneration being paid to casual farm labourers. Unskilled farm labourers saw their hourly rates fall by almost a dollar and, while they had a much smaller decline, even skilled casual workers saw a fall in hourly rates.

“This arguably reflects a sharp pruning of farm operating costs with employers moving resources to retain skilled permanent staff at the expense of casual staff,” Mr Russell concluded.

Federated Farmers felt policy uncertainty and a focus on debt reduction by employers would temper wage and salary growth for the foreseeable future. That said, agriculture provided a clear career path with senior positions on packages comparable to the professions. Given the future of New Zealand is the future of farming, both Rabobank and Federated Farmers believe the long term will be bright.

TheCattleSite News Desk

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