Farming wages well ahead of non-farm wages, Rabobank / Federated Farmers survey shows

While the recession continues to dampen wages and salaries outside the farm gate, inside it, farm workers recorded an overall average salary rise of 4.9 percent in the year to October 2010, according to the Federated Farmers/Rabobank Farm Employee Remuneration Report for 2010.

“With inflation running at around 4.6 percent in the first quarter of 2011, farm workers are better off personally and professionally with average wage and salary increases of 8.2 percent in the past two years,” says Don Nicolson, President of Federated Farmers.

“Over 2010, the 4.9 percent average increase for farm workers means they are slightly ahead of rising costs.  It contrasts with Statistics New Zealand’s (SNZ) Labour Cost Index for the March quarter (LCI), which recorded a 1.9 percent increase in the year to March 2011.

“At $45,410 per annum, the average farm employee earned $8,567 more than the average personal (mean) annual wage and salary income earner [i]. This was up from $43,294 in the 2009 report.

“The average total package value (TPV) for employees, including such things as housing and vehicles, mean the package value was $49,474.  In 2009, by contrast, this was $48,388.

“The squeeze has come at the managerial levels, especially in dairy, where mean TPV’s fell by 8.6 percent to $73,360. 

“Then again, senior dairy farm managers benefited from sizeable increases in 2008 and 2009.  The higher employees go, the more they seem to be expected to share business volatility.

“While salaries and TPVs for Dairy Farm Managers fell, overall wages and salaries for dairy workers increased by an average of 5.4 percent with a 0.5 percent increase in a worker’s TPV.

“By contrast, the improved picture for sheep and beef has translated into mean TPV increases for senior management of 7.25 percent.  Senior arable farm managers recorded a slight increase as well.

“Overall, wages and salary for sheep and beef workers increased on average by 2.3 percent, while TPV’s increased by an average of 3.8 percent. 

“The arable sector similarly recorded an average wage and salary growth of 2 percent, but there was a noticeable 3.3 percent decline in TPV’s. 

“Casual skilled farm labourers saw an increase of just under 2.5 percent to pass the $20 an hour mark.  The hourly rate for unskilled farm labourers continued a downwards trend and the increasing monetary gap between the two, highlights a focus on quality over quantity.

“These wage increases come at a time when employer margins have been squeezed by added costs and almost inevitable local authority rate increases.

“The Emissions Trading Scheme has increased electricity prices as well as many basic farm inputs.  That’s not all.  New compliance elements, like the National Animal Identification and Tracing Scheme, look set to impact farmers with cattle from November.

“Then again, it’s important not to place too much importance on wages alone. Output is key to farm income so farm worker productivity is something the wider economy should note.

“Some New Zealanders have a ‘right to a raise’ mentality instead of looking at their individual productivity.  Higher wages won’t close the gap with Australia, but productivity will.  As a farmer, employing staff boils down to a value for money equation.

“So agriculture should be a top choice for people looking at career choices.  The 90-day provision further allows farm employers to try people who may not have conventional farming backgrounds.

“I’d encourage people and career advisors to look at agriculture and websites such as www.ruraljobs.co.nz,” Mr Nicolson concluded.

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

“It’s been a very tough year for all employers, including agriculture, but despite this, the sector shines as an attractive sector to be working in,” said Mr Russell. 

“The dairy sector has benefitted from several positive seasons with many farm employers now targeting debt retirement while boosting productivity. 

“Farmers understand they need to provide competitive employment terms to attract skilled employees and this survey indicates they are doing just that.”

“Agriculture should be a top career choice because the overall package, not to mention the chance for advancement, is outstanding in the current labour market,” Mr Russell concluded.

REPORT HIGHLIGHTS

§  Farm workers earned an average salary of $45,410 (up 4.9 percent in the year to October 2010). The average total package value (TPV) for farm workers (with salary and other benefits) was $49,374 (up 2.2 percent in the year to October 2010) 

§  This compares with the average annual personal income, as recorded by the Statistics NZ Household Economic Survey (Income), being $36,847.

§  Casual skilled employees earned, on average, $20.29 per hour (up 2.5 percent) while unskilled casual staff earned $16.84 per hour (down 0.7 percent). 

OCCUPATIONS SURVEYED

[i] The Statistics NZ Household Economic Survey (Income) covers the year to June 2010.

THE REPORT

The Federated Farmers/Rabobank Farm Employee Remuneration Report was conducted between August and October 2010 and covers the year to October 2010.  Federated Farmers members will receive a copy of this report. A downloadable version will be placed onto the members’ area of the Federation website, but can also be obtained by calling 0800 327 646. Non-members have been able to purchase the report after 13 April, by visiting http://www.fedfarm.org.nz/ourshop or by calling 0800 327 646.