Farmers have warned that they could switch commodities or exit the industry if Labor's tinkering of temporary visa programs further restricts access to workers.
The news comes on the eve of a hike in visa fees and adjustments to rules carving out UK backpackers from needing to work in the regions to stay in Australia.
Meanwhile, Department of Employment and Work Relations data provided to a Senate standing committee reveals a drop of around 11 per cent in the number of Pacific Australia Labour Mobility Scheme workers employed in agriculture in the six months to January.
The figures show that while 28,352 PALM labourers were working in the industry in June 2023, this had dropped to 25,134 in January 2024. Most of the bleed came from the short-term, rather than the long-term, worker streams.
National Farmers Federation president David Jochinke suggested that, even allowing for seasonal-related adjustments, the decline points to farmers walking away from the PALM scheme.
He said increasing red tape was making it harder for farmers to access Labor's Pacific workforce solution and producers were being forced to turn to other sources for workers.
He said the situation made the availability of backpackers "an even more critical part of the agricultural workforce than ever before."
A new NFF survey released on Wednesday found many producers from nearly all commodities and from across Australia would be negatively impacted by the loss of UK backpackers as a source of labour.
The survey, that showed a third of the farm workforce was backpackers during busy harvest periods, found 40 per cent of respondents believed the phasing-out of the requirement for UK backpackers to work in the regions from July 1 would have a "catastrophic" impact on their businesses, while 32pc reported that it would make a "significant" dent in operations.
While 63pc said the removal of the 88-day work incentive, requiring working holidaymaker visa holders to complete three months of specified work before they qualify to apply for a visa extension, would have a "catastrophic" impact and 20pc said it would be "significant."
Meanwhile, 54pc said they would consider changing commodities or leaving the industry if access to workers was further reduced.
Mr Jochinke said the results "boil down" to fewer workers being available would potentially lead to a decrease in food and fibre production in the impacted commodities.
"We need the Government to stop debilitating farmers' access to overseas workers," he said.
"If they're not prepared to get serious about finding alternative pathways, they need to reinforce existing measures, rather than eroding and dismantling them.
"It is clear any further eroding of the 88-day requirement for backpackers to work on farms will have major ramifications for producers.
"Alarmingly, farmers are warning if access to backpackers is eroded further it will mean increases in food prices, a fatiguing workforce and, in the worst case, farmers walking away from the industry."
