Efficiency Gains Reduced Labour Concerns
At the start of the last decade, GP1 forecast that human capital issues would be a major hurdle to the progress of Australian agriculture. In particular, the issues of labour and skill shortages, as well as ageing farmer populations.
According to one estimate at that time, Australia already faced a shortage of around 100,000 farmworkers. Based on this deficit, the report forecast that the flow of workers into agriculture could not keep pace with the sector’s expected strong growth.
Of particular concern was that a number of specific industries would be most impacted and would be unable to achieve their full production potential. The major sector highlighted was horticulture, where the ongoing challenge to attract enough casual labour led to short-term impacts like the inability to pick all fruit and vegetables, to the longer-term impact of deterring future investment in the sector. Similarly, the dairy industry was also challenged in its ability to attract labour to roles that usually involve early and disjointed hours, often in colder conditions.
Clearly these challenges remain, with the labour shortages as a result of COVID-19 disruptions quite apparent. However, the developments over the past decade have somewhat mitigated this concern.
Importantly, developments in agtech have increased the level of work that can be automated, whether in horticulture, dairy, or other industries.
While these technological developments have great potential, there is still much room for improvement, as well as on-farm implementation of agtech until labour requirements are significantly reduced.
The consolidation of farms and the growth in efficiency measurements has seen an ongoing reduction in the labour requirements of the major agricultural sectors. ANZ modelling has shown that for both the broadacre and dairy sectors, total labour time for each sector overall has fallen over the past 30 years. This is largely due to rapid advances in agricultural technology.
A further change to the ability to attract labour to the sector has come about through an ongoing shift in the approach to agricultural employment. The growth in corporate farming structures during the last decade continues to modernise the labour structure of agricultural operations today.
Many larger family farms and corporate farms offer employees better terms and conditions, the opportunity for career development and greater job security.
Ongoing developments in technology and farm management are leading to greater efficiency, reducing the number of workers needed per unit of output.
The growth in value and outlook for the sector have encouraged a new generation of employees to enter the industry.
The onset of COVID-19 in 2020 provided a strong reminder to the industry as to why the process of automation must be sped up. The COVID-19 disruptions exacerbated labour shortages, highlighting the high reliance by some parts of the agricultural sector on itinerant or cross-border labour.
Losing foreign labour, including backpackers and other short term visa holders, had a significant impact on horticulture as one example, while difficulties experienced by shearers in getting across state borders also created concerns for the sector.
Looking toward 2030, it is likely that the continuing rise in investment into agriculture will play a major role in the increase of automation in different subsectors. The increasing emphasis on achieving new sustainability metrics, such as reduced water and fossil fuel usage will further speed up this change.
It is likely that the continuing rise in investment into agriculture will play a major role in the increase of automation in different subsectors.
The age demographics of Australian farmers was considered another challenge. When GP1 was published the median age of farmers was in the mid-50s and only a minority had family working in their business, yet many farms did not have succession plans in place.
The subsequent decade proved that not only were many of these concerns unfounded, but that the situation changed markedly.
As discussed in the previous section, the changing structure of the Australian family farm, with growth in multi-generational operations and larger farms leading to increases in both efficiency and family labour, has also reduced labour shortage concerns for Australian agricultural operations, as family members increasingly pro-actively fill many of the essential roles.
