Thursday, March 28, 2024

Workshy threaten big investment

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Kiwifruit growers’ failure to find enough pickers this season is not because of low pay, Apata Group managing director Stu Weston says.
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Calls to pay more are well intentioned but simplistic with an incorrect conclusion, Weston said.

“I wonder if the public understand what this does to costs as it ripples through the economy.” 

Many pickers were now on well over $20 an hour and capable of earning more than $1000 a week.

“And we even have good pickers on $30 an hour. 

“The economic argument to just pay more presupposes some elasticity of supply which just is not there. It is in fact quite inelastic. 

“For years we have been told to pay more and the net effect is zero.”

In his packhouses, which account for about 10% of the country’s crop, he goes as far to encourage staff to just show up.

“We will say ‘here is the minimum rate but we will pay you extra if you continue coming at the end of the week, month or season’.

“However, what every packhouse finds is the guys who were always going to turn up will. For the target market for this bonus it does not make a scrap of difference.”

There is also the problem of having to tap a source far from work fit when it comes to physical work.

“A lot of people cannot get over the fact 120,000 people are still unemployed and ask ‘how could you not get them working?’”

He likened it to trying to get an unfit person onto a rugby pitch for 80 minutes of intensive playing.

“With this seasonal work you go from zero to 100kmh overnight and workers need to be up for that and most simply are not.”

Weston said the stars had aligned this season with high-quality fruit and high volumes and fortunately the weather had co-operated for the first half of harvest, helping ease the impact of the picker shortage. 

“So there will not be any dramatic television footage there of bereft growers looking at rotting fruit falling to the ground.”

However, things are unlikely to get better in coming years as greater volumes of SunGold crop come on stream, he said.

With 700ha a year going into the ground over coming years, about half that would represent a net gain in area or an extra five million trays a year.

“The problem is Green is a May crop and SunGold an April crop so, by changing from Green to SunGold, compresses the season more and more into a very finite time window.”

While the call for more SunGold was coming from Zespri, Weston had no beef with what the marketer wanted to achieve.

“Zespri is just there to give us feedback from the market and they are telling us SunGold is going nuts out there and the opportunity is there if you want it. 

“Of course, Zespri wants to see us succeed at this.”

The implications of the labour shortage the planned expansion are significant. 

“Every morning I wake up and know my whole business with $70 million of infrastructure and assets only works when people turn up. 

“Why would I spend another $40m to expand when no-one is there to work it?”

Already he is forced to run only three-quarters of his usual peak shifts and even those are not fully staffed. 

So the industry’s numbers for planned expansion are frightening.

The 700ha a year extra means his company will be required to invest $80m in plant and equipment, about 10% of the total new investment required throughout the industry.

“So, the industry is looking at the thick end of $1 billion investment to cater for it with no certainty over labour supply to work it.”

An increase in Recognised Seasonal Employer scheme numbers would help get over the seasonal hump each year. 

But the challenge is also to get more locals engaged full time in the industry and the year-round jobs are there.

“No one argues putting them to work picking is a great idea to transition them from unemployment but to go straight into hard seasonal picking – what a way to put them off.”

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