How Pacific labour reform will hurt farmers and help Chinese influence

Under the reforms, employers would have to pay Pacific Australia Labour Mobility (PALM) seasonal workers a minimum of 30 hours a week.

The agriculture industry says the proposal removes the flexibility seasonal workers are valued for and would force businesses to pay workers when conditions are too wet or hot, or the fruit is yet to ripen.

The National Farmers' Federation warned smaller businesses would not be able to bear the risk of carrying the cost of wages where no work is able to be done for reasons outside their control, and would likely pivot to other sources of workers with backpackers returning to pre-COVID levels.

The Albanese government views the PALM program as an important soft diplomacy tool, ramping up the scheme to increase Australia's ties to Pacific Island nations and ward off China's growing influence. The program is popular among Pacific countries, with many of its participants earning three to five times the average wage of their home country.

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NFF horticulture council executive officer Richard Shannon said during the pandemic, the PALM scheme was the only option for many farmers. But the return of backpackers to pre-COVID numbers has not gone unnoticed by employers.

Mr Shannon said although the industry was aware withdrawing support for PALM would damage Australia's international relations, many farmers would have no other option.

"Growers are readying themselves to walk away [from the PALM scheme] in big numbers," he said.

"We also don't want to damage Australia's relationship with the Pacific through a mass exodus of farms from the program, but at this point we'd have to encourage farmers to explore their options carefully."

There were just 6500 Pacific workers when COVID-19 hit. The program has doubled every year since, with more than 37,000 workers in the country - most of which in the agriculture and horticulture sectors.

Australian Fresh Produce Alliance chief executive Claire McClelland said the politicians in Canberra had to understand the variability in growing fresh produce.

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"A few hours of heavy rain can make it impossible to access paddocks for several days," Ms McClelland said.

"Employers who engage PALM workers will be at risk of breaching the program's conditions anytime there is a few days of bad weather.

"The only options will be for employers to reduce engagement in the program, and look to alternative sources of labour, like backpackers, which is an unfortunate outcome for industry, and the Pacific."

The agriculture industry - who criticised the rushed 10-day consultation period - has proposed a compromise of 30 hours achieved on average over an eight week period.

Agriculture Minister Murray Watt was contacted for comment.