Agricultural Labour in Australia Part 2: The Roots of the Problem
Giacomo Bianchino
03/11/2021
The situation in Australian horticulture is becoming dire for the people who work in the fields. We are used to complaints from farmers that they cannot find workers to pick their crops. But while they insist on a “labour shortage”, union groups are quick to retort that domestic unemployment is relatively high. Is there really a labour shortage, and what has led to this situation?
Approaching the history of any industry presents us with difficulties. Certain accounts place too significant an emphasis on developments within capital, ignoring the constituent role played by the resistance of labour. Those who look exclusively at the economic struggle fail to take account of the international developments that underlie strategic changes to capitalist organisation. In the struggle of groups for control over production, one also has to be sensitive to political machinations and the ways that they don’t always match up to a narrow conception of “class interest.” In what follows, I will try to navigate between these problems.
Agriculture and Australian Development
For the first 150 years, the British colonies that would later federalise and become “Australia” were deeply reliant on its agricultural exports. As Humphrey McQueen notes, it was partly the wealth from wool and wheat (and then gold) which allowed the colonies to develop with fewer of the social antagonisms than mother Britain [1]. This motivated the expansion of squatting and settlement which catalysed the frontier wars and the genocidal practices of the young colonies. It also created a protectionist movement among producers and the young labour movement to restrict immigration. Rather than resist the chauvinism of this movement, the new Labor party became its most vocal supporter. The combination of tariffs, internal expansion and “White Australia” policies meant that small-scale farming remained a possibility for many (white) Australians. A large rural middle class developed alongside the squattocracy, members of which became important leaders of the new party.
The newly formed Australian state intervened directly in the maintenance of the system of agriculture from 1901 onwards. This increased with the depression in the 1920s, particularly as Labor itself turned from a wage-raising platform to a social welfare platform (which included small producers). It largely abandoned the question of the agricultural working class, including the virtual enslavement of Indigenous and foreign workers in pastoral work. It was left to them to self-organise, with the assistance of some unions and the Communist Party, in the Pilbara Strike of 1946.
The assistance provided by the state to farms lacked a national plan. The policy, as it became known in the post-war period, was “stabilisation”— with the government providing individual industries with friendly market conditions [2]. This meant guaranteeing prices, providing bounties and subsidies, mixing output requirements, production controls and marketing assistance.
Though there wasn’t any plan, the focus in agricultural support was based on building the national income. Australia had, on one hand, to settle its import bill as its welfare schemes created a larger consumer base. On the other, the economic orthodoxy at the time was “protection all round:” a system by which surplus value generated in a protected agricultural export market was used to support the fledgeling manufacturing sector.
This patchy system lasted until the 1970s and the dawn of Whitlamism. Prime Minister Gough Whitlam’s developmentalist streak was based on the theory that the Australian economy was transitioning away from both rural production and manufacture to a service economy [3]. Stabilisation would no longer cut it. In fact, it was agriculture that provided the experimental ground for the market liberalisation that Labor would champion in the 1980s. A green paper commissioned in 1974 led to the creation of the Industries Assistance Commission, which scrutinised governmental support for productive sectors. It was to lobby against the IAC that the farmers formed a conglomerate known as the National Farmers’ Federation in 1979.
In the 1980s and early 1990s, Australian farmers barely clung to their market position. With the opening of the Chinese labour market in 1978 and the completion of the global “real subsumption” by which small agricultural production was universally subordinated to the commodity-export model, Australian agriculture struggled to compete. Our high wages robbed our product of comparative cost advantage on the export market when weighed against that of the low-wage economies. The growth of the supermarket duopolies at home, meanwhile, put pressure on the prices at which they could realise their capital domestically. In this context, government support was their lifeline.
Deregulation and the Re-Emergence of the Agricultural Proletariat
This crutch, however, was soon to be removed. In 1981, Prime Minister Bob Hawke commissioned the Campbell Inquiry into Australian finance, which basically recommended both tariff reduction and deregulation. This became the central plank of what Liz Humphrys calls Labor’s “neo-liberalism”; a spate of deregulation which also produced the Prices and Incomes Accord that proved so disastrous for the labour movement [4].
As treasurer, Paul Keating invited big business to assist the IAC in an investigation for removing the kinds of intervention that the government had used to make the market safe for Australian agriculture. When he became PM, Keating expanded this into the Hilmer Inquiry, which found that "there should be no regulatory restriction on competition unless clearly demonstrate to be in the public interest" [5]. The Inquiry also rejected any data offered by local or state governments that contradicted their own findings. On the basis of this rigorous review, Keating convened the National Competition Policy.
The NCP was introduced in 1995, and required the total (if gradual) deregulation of agricultural support systems at a state level. In an industry like the Wool trade, this meant the abolition of the Statutory Board which had once bought back all agricultural surplus at market price in case of market volatility [6]. In other industries, it made imports cheaper than domestic products. The NFF and the farmers they represent tried to fight back, but were ultimately the victims of a “shock therapy” which may have been a necessary accompaniment to Australia’s transition to a service economy.
The results were instant. Smaller farmers were unable to compete. They either tried to supplement their income with off-farm work, or left the trade. 40 000 farmers hung up their hats in the early part of the 21st century [7]. This was compounded by the onset of the Millennium drought around 1996, whose ten-year devastation withered any hopes small producers may have had of clinging to profits. In these conditions, a new kind of agricultural proletariat started to grow, relying on harvest work as a primary or secondary source of income.
This led to a huge concentration of agricultural capital in the hands of a small group of people. Between 1978 and 2019, the percentage of farms in Australia which were categorised as large (having receipts over $1000) quintupled in size. Their share of overall agricultural output grew from 25% of 58% of total output, marking a distinct rise in the economic power of the agricultural bourgeoisie [8].
Labour Markets in Australian Agriculture and the Exception of Horticulture
It is at this point, in the mid-2000s, that the different sectors of Australian agriculture came apart. One of the reasons that larger farmers were able to prosper is that those with large capital were able to mechanise. They lowered unit costs by mechanising and rationalising production and logistics. This mechanisation led to the number of jobs in broadacre farming (crops like wheat or barley) declining relative to the labour supply.
With this rationalisation and its attendant productivity increase, Australian broadacre farming became increasingly dependent on export to sell their surplus product. In fact, around 70% of agricultural output in Australia is now exported [9]. The bulk of this is wool, cotton, wheat and beef; commodities whose production is either easily automated or requires small amounts of labour.
This has caught certain sectors of Australian farming in a loop of financialisation. The profits in large-scale livestock and broadacre farming have attracted international capital. Many farms, following this lead, have transformed their operations into instruments for investment by selling to the bank. They then lease the property back and become one shareholder among many. Such a process encourages short-term profits, as one becomes responsible to the demands of investors. Such farms are uninterested in long-term labour force formation or strategic planning [10].
There are some areas of agricultural production, however, in which automation and rationalisation are more difficult. In horticulture, harvesting requires a huge amount of manual labour which cannot be readily substituted by machines. There is also lower international demand for Australian horticulture—only 31% was exported in 2019-2020 [11].
This means that, while other areas of agriculture are “disaccumulating” (using less labour), horticulture is in a stable state of “accumulation”. Horticulturalists are reliant on labour to plant, pick and pack their crops, so the demand for labour has remained relatively uniform compared to other sectors.
Because of barriers to automation, farmers tend to compete with one another by restricting costs via “labour devalorisation:” the moderating or lowering of wages. In fact, the industry has remained opposed to any wage inflation, and horticulture is among the slowest-growing awards in the country. Not only this, but the majority of farmers admit to underpaying the workers they do have [12]. As mentioned in the previous article, most farmers pay piece rates, which segment the workforce and attach wages to the volume of output rather than the collective demands of the workers.
Obviously, this doesn’t make harvest work very attractive for Australian workers who can find employment in urban areas, or even regional towns, where the pay and conditions are substantially better. Farmers, then, are faced with problems in trying to find the kind of labour they want. This is what the National Farmers’ Federation means when they refer to a “labour shortage": not an absence of workers, only an absence of workers who will agree to their unfair conditions.
In the next article, we will examine what these conditions are, and the various methods the government has used to try and accommodate farmers. This will mean looking at existing farmwork visas and the new “Agricultural Visa.”
References:
[1] McQueen, H., A New Britannia, Brisbane: University of Queensland Press, 2004, p. 145
[2] Botterill, L., “Agricultural Policy in Australia: Deregulation, Bipartisanship and Agrarian Sentiment” Australian Journal of Political Science, 51, 4, 2016, pp.671-673
[3] Botterill, “Agricultural Policy”, p. 673
[4] Humphrys, L., How Labor Built Neoliberalism, Boston: Brill, 2019
[5] Margetts, D., “National Competition Policy and the Australian Dairy Industry” Journal of Australian Political Economy, 6, 2007, p. 98
[6] Vanclay, F., “The Impacts of Deregulation and Agricultural Restructuring for Rural Australia” Australian Journal of Social Issues, 38, 1, 2003, p. 85
[7] Rosewarne, S. “The Making of the Agricultural Industry's Temporary Migrant Workforce: Beyond Explotiative Experiences?” Journal of Australian Political Economy, 18, 2019, p. 189
[8] Brown, A, De Costa, C & Guo, F, Our food future: trends and opportunities, ABARES, Research Report 20.1, Canberra, 2020, https://www.agriculture.gov.au/abares/products/insights/snapshot-of-australian-agriculture-2021
[9] “Agricultural Snapshot 2021”
[10] Rosewarne, “The Making of the Australian Agricultural Industry’s Temporary Migrant Workforce”, pp. 201-202
[11] Agricultural Snapshot 2021
[12] Rosewarne, “The Making of the Australian Agricultural Industry’s Temporary Migrant Workforce”, p. 195