Analysis

Farming on the verge of a workforce crisis

Agribusiness Bulletin

In 2012-13 the gross value of total Australian agricultural production was $48.0 billion, up from around $14 billion at the start of the 1980s (ABARES 2013). ABARES 2050 projections indicate significant increases for a range of Australian commodities exports to support China’s demand, which are estimated to become more than double for dairy products, nearly double for sugar and beef, 75% increase in sheep and goat from 2007, 61% increase for vegetable oil, and an 18% increase in coarse grains. This demand for Australian commodities is only a small part of the story of growing global food demand driven by the rise of the world’s population and rising incomes in emerging economies.

As reported in our Positioning for Prosperity report, the Australian agricultural industry has been identified as one of the key future growth engines for the economy. So what is the position of our Australian farms to support the world’s demand for food?

According to the Australian Bureau of Statistics (2013), there are approximately 135,000 farm businesses in Australia, 99% of which are Australian owned. 321,000 people are employed in agriculture (ABARES 2012 – 2013), with over 1.6 million jobs provided across the value chain.

However, Australia’s agricultural industry is facing a workforce crisis:

  • Farmers are aging with the average farmer aged between 53 and 59 years old (Victorian Farmers Federation, 2012), compared with the median age of 40 for the rest of the workforce (ABS 2103)
  • Supply of agricultural workers is currently not enough to replace the aging workforce; by 2015 the ABS predicts more workers will be leaving the industry than are entering it
  • 70% of the workforce is male, currently restricting the potential pool to tap into for talent (ABS, 2011)
  • All categories of agricultural labour are under supplied(Victorian Farmers Federation, 2011)
  • Whilst the mining investment boom is on the decline, the lure of financial gain is still attracting younger workers away from agriculture.

This article looks at some of the attraction and retention strategies that could be used by Australian agribusiness in seeking to realise the growing global demand for food.

Common perceptions seen in the mainstream media are that agribusiness offers less prosperous career options and outcomes, re-affirmed by limited study options and difficult points of entry. These perceptions can combine to significantly lower the desirability of a career in agribusiness.

The common barriers to entry for attracting workers into agriculture are also key areas for creating opportunity to attract talent into the industry. A number of key opportunities exist to increase the attractiveness and recruitment into agriculture. Six of these are described below.

Agriculture and rural work is commonly projected in one of two ways; either romanticised aka “The Man from Snowy River”, or denigrated as being for the uneducated and unsophisticated. Further to this farming can be portrayed as “masculine” with relatively low female representation in key farming roles. This branding of the industry does not reflect or promote the innovative, diverse, forward thinking and positive lifestyle factors that a career in farming offers. In fact, it undervalues agriculture’s contribution to the Australian economy and dampens the attractiveness and enticement of skilled workers into the sector.  A commitment to challenging current images and perceptions, in conjunction with promotion of the viability of agriculture is needed in helping attract workers to the industry.

Time for an image makeover

The breadth of skills, experience, education and business acumen required to undertake jobs within agricultural extends not just to on farm workers but across the entire value chain and rural communities. However, job advertisements for rural roles can lack an air of professionalism, a focus on technical primary production competencies. The opportunity to create an enticing first impression through job advertisements can broaden both the quantity and quality of the applicant pool, attracting a more diverse range of potential workers.

Improving the first impressions of job advertisements

Remuneration packages within agriculture are commonly compared to those offered within the mining industry; often with agriculture losing out in the financial pay offs. The average mining industry salary equals $120,739, compared to the average agricultural salary of $81,049 (Seek 2014 Annual Salary Review). So whilst the average financial reward offered in mining is approximately $40,000 above that offered in agricultural, there is opportunity to communicate the total rewards package offered in farming jobs. For example when agricultural positions offer on-site family-friendly accommodation, fuel, meat, vehicle, seasonal bonus, as well as base salary the total package for agricultural jobs become appealing, especially when this is combined with other lifestyle benefits. Being innovative in the type of rewards offered, such as investment opportunities and share farming arrangements can also benefit the attraction and retention of skilled workers into the agricultural sector.

The total remuneration package 

Cost of buy-in for new entrants is a financial deterrent, particularly for younger workers who don’t yet have the financial means to do so. In addition, the existing family owned farm, of which 90% of Australian farms are, also prevents those outside the family tree from entry. Different capital models that encourage, assist and promote entry by newcomers are needed. Options may include leasing alternatives (Op Co / Prop Co models), share farming, rural finance lending policies which support small scale and new entrants,  stamp duty relaxation for first farmland purchases, equity partnerships and models for purchase of non-land assets such as livestock. Institutional investment, private equity owners and foreign investors can have a positive benefit on creating opportunities for new entrants through the separation of farm ownership and farm operations.

Easing the entry into farm ownership

Opportunity for social cohesion and connectivity as well as career development and progression are important and expected aspects for rural workers, particularly younger workers. Social and professional development can be provisioned through the creation of off farm networking and skills development seminars and further formal education pathways, creating opportunities for social and professional growth. Programs such as this help stimulate innovation, connectivity, communication and career prosperity. Furthermore, social assembly offers broader community health benefits including reducing depression and feelings of isolation, the creation of inclusion and improvements to community liveability. 

Social networking and skills development

The numbers of young people attracted to farming has been on the persistent decline from the mid 1970’s (Victorian Farmers Federation, 2011; RMIT University, 2011). Engaging young people early in their middle secondary school years to showcase a career in agriculture is crucial in capturing young people into the industry. Agricultural careers need to be promoted as successful and respectable career options, not just for students who have a family farming background. It has been shown that creating positive, hands-on experiences (such as training placements), not only attract young people into the industry but also create strong advocates for careers within agriculture. [There is some good work done here already that we need to link and reference (such as PIEF). 

Introducing agricultural career pathways in schools

The above six opportunities to attract workers into the agricultural industry are only a sample of the transformation and progression required to address the current workforce supply crisis, which is identified by the National Farmers Federation to be greater than 100,000 workers. Acknowledging and investing in attracting workers to the agricultural industry has sweeping benefits for the Australian economy, farm gate returns, national productivity and innovation, as well as global investment and competitiveness. However, it requires proactive measures from multiple parties including the agricultural industry itself, government, communities, media, educational institutions and private enterprise.

Addressing the agricultural workforce supply crisis is an essential requirement in positioning Australian agribusiness to realise the opportunities for future prosperity.

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Conclusion

Authors

Stella Watts    
Manager | Human Capital – Consulting   
Tel: +61 409 110 026
Email
 

Julie Harrison
Partner | Human Capital – Consulting
Tel: +61 8 9365 7061
Email

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