Working Paper Callister and Tipples - Institute for Governance and ...

“Essential” workers in the dairy industry
Paul Callister and Rupert Tipples
INSTITUTE OF POLICY STUDIES
WORKING PAPER 10/10
July, 2010

INSTITUTE OF POLICY STUDIES
WORKING PAPER
10/10
MONTH/YEAR
AUTHORS
“Essential” workers in the dairy industry
July, 2010
Paul Callister
Institute of Policy Studies
Email: paul.callister@vuw.ac.nz
Rupert Tipples
Lincoln University
Email: Rupert.Tipples@lincoln.ac.nz
ACKNOWLEDGEMENTS
We would like to acknowledge the Emerging Issues
Fund in supporting this research, which is part of a
larger project on low skill migration.
INSTITUTE OF POLICY STUDIES
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Email: ips@vuw.ac.nz
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Fax: + 64 4 463 7413
Website www.ips.ac.nz
DISCLAIMER
The views, opinions, findings, and conclusions or
recommendations expressed in this Working Paper
are strictly those of the author. They do not
necessarily reflect the views of the Institute of Policy
Studies, the School of Government or Victoria
University of Wellington, or the reviewers. The
aforementioned take no responsibility for any errors
or omissions in, or for the correctness of, the information
contained in these working papers. The paper
is presented not as policy, but with a view to inform
and stimulate wider debate.

“Essential” workers in the dairy industry
Abstract
Over the past decade the dairy industry has grown in land area, number of cows, milk
production and dairy exports to the point where it is New Zealand’s premier exporter. This
growth has been associated with significant structural changes to the industry. In particular,
there has been a widespread conversion from small, family-owned and managed farms that
were traditionally characterised by high levels of self-employment to large-scale “factory”
style farms that are dependent upon non-family, mainly casualised, and partially seasonal
labour who typically work long hours. Not surprisingly, the industry has been plagued by
issues of recruitment and retention of employees and its social sustainability has been in
question.
The future of the dairy industry to a large degree depends on its people. In both the shorter
and the longer terms a migrant component to the dairy farm labour force will be essential.
There is a question as to whether this migrant labour can be provided in a way that gives
benefits to all stakeholders as has been achieved so far via the Recognised Seasonal
Employer scheme for horticulture and viticulture. A profound change in the dairy industry
may be necessary to ensure that stakeholders make the effort necessary to negotiate such a
multi-win outcome. That needs to be supported by an evidence base to ensure an enduring
rather than a temporary solution.
Key words: low skill migration, dairy industry, seasonal work
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“Essential” workers in the dairy industry
Introduction
New Zealand has been attempting to move to a high-skill, high-income economy.
Nevertheless relatively low-skill workers remain a key part of many sectors of the economy.
This includes tourism, construction, and most areas of the primary sector. Examples of such
jobs include making beds in the hotel industry, alongside highly skilled jobs such as chefs;
caregivers, working with higher skill doctors and nurses, in retirement homes; and farm
labourers in the dairy industry, part of a chain of production that includes many highly skilled
occupations, including food technologists and international marketeers.
While many of the jobs described as low skill do require a range of capabilities, for most of
them there are low barriers to entry and the jobs can often be filled by people with few formal
qualifications. But perhaps more importantly these are jobs that are generally relatively low
paid, sometimes near or at the minimum wage. In many overseas countries workers in these
type of jobs are often new migrants, sometimes working illegally or, if working legally, often
on temporary work permits. Reflecting a combination of migrant status and low pay, the
somewhat euphemistic term ‘essential worker’ has developed in economies such as the
United States.
In this paper we consider essential farm workers in the dairy industry. We reflect on the
changing characteristics of such workers, especially a greater reliance on temporary migrant
workers. In doing so, we make some comparisons with policies recently put in place to attract
workers for the horticulture industry. In particular we focus how the horticulture industry has
turned to the Pacific for workers whereas dairying has turned more towards Asia, particularly
the Philippines. In doing so we use three main datasets: Census data, Linked employeeemployer
data (LEED) and information from the Department of Labour on temporary work
permits.
Background
The dairy farming industry has been expanding rapidly and for a number of years has been
New Zealand’s top export earner (Figure 1). Exports topped over $2.6bn of exports to the end
of 2008 before dropping back to just under $2.0bn by the end of 2009 (Statistics New
Zealand, 2010). The next highest merchandise export has been meat and meat products, with
exports worth just over $1bn in 2009. Another growth sector has been fruit and wine, up from
just over $100m in 1988 to a peak of over $680m in early 2009.
3

Figure 1
Source: Statistics New Zealand, Infoshare
Much of the recent growth of the dairy industry has been stimulated by high world prices.
This growth has been associated with significant structural changes to the industry. In
particular there has been a widespread conversion from small, family-owned and managed
farms that were traditionally characterised by high levels of self-employment to large-scale
“factory” style farms that are dependent upon non-family, mainly casualised, and partially
seasonal labour who typically work long hours. The industry has also been plagued by issues
of recruitment and retention of employees and its social sustainability has been in question.
Employment conditions in this major sector have been problematic since the early twentieth
century. The prevailing culture of the industry has been anti-union and one of cost saving,
particularly of labour. There has also been concern over the increasing rate of occupational
injury, illness and death within an already notoriously hazardous industry. Agricultural
workers and their families are at high risk of occupational injury and disease.
The horticulture industry has been changing too, with some shift in cropping (for example
growth in the wine industry) and some move to larger corporate farming. For a long period
the horticulture industry has also been plagued by labour problems, particularly around the
peak of harvesting. While both dairying and horticulture are seasonal work, the peaks and
troughs of horticulture labour demand are greater. Much attention has been given to solving
the labour supply problems with one key policy initiative being the Recognised Seasonal
Employer Scheme (RSE) which came into being in 2004 (Swain and Maharey, 2004). Unlike
the dairy industry, the RSE has been subject of intense academic and policy scrutiny
(examples include, Ramasamy et al, 2008; Gibson, McKenzie and Rohorua, 2008; Luthria et
al, 2006; The Horticulture and Viticulture Seasonal Working Group, 2005; Maclellan, 2008;
McKenzie, Martinez and Winters, 2008). That scrutiny stemmed from interest and
encouragement of the RSE policy initiative by both the United Nations and World Bank to
see whether such policies could have other applications (Tipples and Whatman, 2009; Luthria,
2008).
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Trends in dairy worker employment
Two datasets are used in this analysis, the five yearly census of population and dwellings and
data from LEED. Each has its strength and weaknesses. The census is self completed and this
has the potential to generate a number of errors including people not filling in particular
questions. In addition there needs to be some caution with census data as it is usually resident
data. As such it is a count of all people who usually live in a given area, and are present in
New Zealand, on a given census night (early March). 1 This usually resident population count
of New Zealand excludes visitors from overseas who live in New Zealand for less than
twelve months. It is therefore possible that these data exclude many temporary workers.
LEED is a longitudinal database that has been developed by Statistics New Zealand. It is
based on the integration of monthly data on employee earnings (derived from Employer
Monthly Schedules filed by employers) with data on employers and firms (derived from the
Business Frame). The LEED dataset covers all individuals (‘employees’) who receive income
from which tax is deducted at source. 2 The key basis of the LEED quarterly measure is ‘jobs’.
A job is defined as a unique employer-employee pair in the reference quarter. Unlike the
census LEED data provide an on-going measure of employment as the data is continuously
being collected. However, there are also major limitations to the data. For example there is no
information on ethnicity or country of birth
Beginning with census data, Wilson and Tipples (2008) used data from 1991 to 2006 to track
the evolution of the dairy farm labour force. These data combine ANSCO codes ‘Dairy cattle
farmer’ and Dairy cattle farm worker’ 3 . The data show a decline in numbers from 28,134 in
1991 to 24,992 by 2006. However, there was some geographic variation in this change with,
at a broad level, decline in the North Island from 25,326 to 18,780 while in the South Island
growth from 2,808 to 6,012. These changes correspond to the decline in traditional North
Island family farming with little employed labour and the growth of large herd dairy farming
in the South Island, often of a corporate nature. Correspondingly there has been a large
growth in the number of employees (Table 1).
Table 1: Dairy farming population proportions (%) by Status in Employment (Censuses
of Population 1991, 1996, 2001, 2006)
Status (% of status group) 1991 1996 2001 2006
Paid employee 18 21 24 37
Employer 25 26 32 29
Self-employed and without employees 52 41 38 27
Unpaid family worker 4 10 5 6
Not stated 1 2 1 1
Total 100 100 100 100
Source: Census of Population and Dwellings, Statistics New Zealand
1 Early March is near the end of summer so employment of dairy seasonal workers will still be relatively high.
2 LEED data include social assistance payments such as paid parental leave, student allowances, benefits,
pensions and ACC payments.
3 121313 and 841512
5

Table 2 splits the dairy farming workforce into two groups, the farmers and the workers and
shows country of birth in terms of main region and New Zealand.
Table 2: Geographic region of birth of dairy workers and all other employed, 2006
Occupation Birthplace Under 30 Years 30 or older Total 15 and over Under 30 30 or older Total 15 and over
Total numbers %
Dairy Cattle Farmer New Zealand 4,167 15,330 19,500 92.0 91.2 91.4
Dairy Cattle Farmer Australia 57 135 192 1.3 0.8 0.9
Dairy Cattle Farmer Pacific Islands 9 33 45 0.2 0.2 0.2
Dairy Cattle Farmer United Kingdom and Ireland 96 561 657 2.1 3.3 3.1
Dairy Cattle Farmer Europe (excl. UK and Ireland) 93 408 501 2.1 2.4 2.3
Dairy Cattle Farmer North America 12 48 60 0.3 0.3 0.3
Dairy Cattle Farmer Asia 27 144 168 0.6 0.9 0.8
Dairy Cattle Farmer Other 69 147 216 1.5 0.9 1.0
Dairy Cattle Farmer Total specified 4,530 16,806 21,339 100.0 100.0 100.0
Dairy Cattle Farm Worker New Zealand 1,512 1,368 2,877 90.3 85.7 88.2
Dairy Cattle Farm Worker Australia 30 27 54 1.8 1.7 1.7
Dairy Cattle Farm Worker Pacific Islands 6 3 9 0.4 0.2 0.3
Dairy Cattle Farm Worker United Kingdom and Ireland 24 78 102 1.4 4.9 3.1
Dairy Cattle Farm Worker Europe (excl. UK and Ireland) 33 42 75 2.0 2.6 2.3
Dairy Cattle Farm Worker North America 6 3 9 0.4 0.2 0.3
Dairy Cattle Farm Worker Asia 30 30 57 1.8 1.9 1.7
Dairy Cattle Farm Worker Other 33 45 78 2.0 2.8 2.4
Dairy Cattle Farm Worker Total specified 1,674 1,596 3,261 100.0 100.0 100.0
All Other Occupations New Zealand 362,064 1,037,949 1,400,016 79.1 75.4 76.3
All Other Occupations Australia 10,224 21,195 31,419 2.2 1.5 1.7
All Other Occupations Pacific Islands 14,880 49,311 64,191 3.3 3.6 3.5
All Other Occupations United Kingdom and Ireland 13,950 119,526 133,473 3.0 8.7 7.3
All Other Occupations Europe (excl. UK and Ireland) 5,940 27,339 33,279 1.3 2.0 1.8
All Other Occupations North America 3,450 11,403 14,856 0.8 0.8 0.8
All Other Occupations Asia 35,061 76,830 111,894 7.7 5.6 6.1
All Other Occupations Other 11,991 32,799 44,790 2.6 2.4 2.4
All Other Occupations Total specified 457,560 1,376,352 1,833,918 100.0 100.0 100.0
Source: Census of Population and Dwellings, Statistics New Zealand
6

A number of patterns stand out in the Census data summarised in Table 2. These include:
Most dairy farmers and workers were born in New Zealand (over 90%) whereas,
depending on age group, a quarter to a fifth of other workers were born overseas.
A very small proportion of dairy farmers were born in Asia (0.8% overall) with a slightly
higher proportion of dairy workers born in that region (1.7%). This is in contrast to over
6% of all other New Zealand workers being born in Asia and just under 8% of those
under 30.
Relatively few people working in dairying were born in the Pacific.
As with other occupations, if born overseas the most likely area to have been born in was
the UK.
A more detailed breakdown of country of birth shows that as of 2006 there were few workers
from the Philippines, only 24 reported (data rounded to nearest 3).
The census can also provide an ethnic breakdown of the workforce. Ideally both country of
birth and ethnicity should be considered at the same time, but quickly one gets into
confidentiality issues. Therefore Table 3 considers just ethnicity in relation to the dairying
industry. In this table there is no indication of what proportion of each ethnic group was born
in New Zealand. In addition, the ethnicity data uses total counts. That is where someone
records more than one ethnicity, they are counted in each ethnic group.
In all age groups and for both dairy farmers and workers, European ethnicity is the most
common response. In the older age groups, the next most common response is “other
ethnicity’ which will be primarily a “New Zealander’ type response. In the younger age
groups Māori is the second most common response and this is of a similar magnitude to the
rest of the population. Table 3 however illustrates the relative under-representation of Asians
and Pacific people in this area of work.
Table 4 shows the highest educational level of both New Zealand born and overseas born
dairy farmers and workers. Wilson and Tipples (2008) have already demonstrated that those
with either no formal qualifications or school qualifications made up the majority of the dairy
farming workforce. Table 4 shows some complexity to this. Overall, the overseas born,
working on dairy farms, are better qualified than the local workforce. This fits with Outcome
2 from the Strategy for New Zealand Dairy Farming 2009/2020: ‘Talented and skilled people
are attracted to, and retained by the industry’. Perhaps they are also using dairy farming as a
route to gain ‘residence’ to practise their preferred occupation, but that does not fit readily
with the Immediate Skill Shortage List 4 on which they were granted their visas.
4 The Department of Labour use the Intermediate Skill Shortage List (ISSL) only in relation to temporary work
policy. If migrants come to work in New Zealand based on meeting the ISSL requirements, there is no direct
link to residence. Four occupations are related to dairy farming – Assistant farm or herd managers and full farm
or herd managers, requiring a mix of 2-3 years experience and National Certificates equivalent to New
Zealand’s Level 2 or Level 4. Immediate Skill Shortage List: Effective 26 November 2009. Link:
http://www.immigration.govt.nz/templates/custom/SearchskillshortagesPopup.aspx?NRMODE=Published&NR
NODEGUID=%7b17CCA408-8572-4E07-80EB-
26FAC203D4F7%7d&NRORIGINALURL=%2fmigrant%2fstream%2fwork%2fskilledmigrant%2fLinkAdmini
stration%2fToolboxLinks%2fessentialskills%2ehtm%3flevel%3d1&NRCACHEHINT=Guest&level=1
7

Table 3: Ethnic group of dairy workers and other occupations, total counts, 2006
Occupation Ethnic Group 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59
Dairy Cattle Farmer European 84.9 85.3 83.3 79.5 80.9 79.5 79.8 78.7 83.4
Dairy Cattle Farmer Mäori 14.6 10.9 9.0 7.9 5.3 5.1 5.1 3.7 2.5
Dairy Cattle Farmer Pacific Peoples 1.0 0.9 0.6 0.7 0.4 0.3 0.4 0.3 0.1
Dairy Cattle Farmer Asian 1.2 1.1 1.5 2.1 1.5 1.3 0.7 0.6 0.8
Dairy Cattle Farmer Middle Eastern/Latin American/African 0.2 0.2 0.5 0.7 0.1 0.1 0.1 0.0 0.1
Dairy Cattle Farmer Other Ethnicity 10.2 10.3 12.5 15.4 16.8 17.9 18.4 20.2 16.2
Dairy Cattle Farmer Total 100 100 100 100 100 100 100 100 100
Dairy Worker European 83.9 79.4 80.3 78.9 79.8 78.5 76.8 84.6 84.9
Dairy Worker Mäori 13.3 15.0 13.4 11.0 10.6 7.5 13.4 7.7 3.2
Dairy Worker Pacific Peoples 1.6 1.1 0.8 0.9 0.0 2.2 0.0 0.0 0
Dairy Worker Asian 0.4 2.2 4.7 2.8 4.8 1.1 1.2 0.0 2.2
Dairy Worker Middle Eastern/Latin American/African 0.4 1.1 1.6 3.7 1.0 1.1 0.0 0.0 0
Dairy Worker Other Ethnicity 10.0 12.2 8.7 12.8 10.6 16.1 13.4 17.3 12.9
Dairy Worker Total 100 100 100 100 100 100 100 100 100
Other Occupations European 75.4 67.4 65.0 66.5 67.0 67.6 69.3 71.2 76.8
Other Occupations Mäori 17.5 14.7 14.0 12.9 11.7 10.8 10.0 8.6 6.5
Other Occupations Pacific Peoples 5.8 6.9 7.0 5.9 5.3 4.4 3.7 3.2 2
Other Occupations Asian 6.2 12.3 12.4 9.8 9.2 9.0 7.5 5.7 2.9
Other Occupations Middle Eastern/Latin American/African 0.7 0.9 1.1 1.0 0.9 0.7 0.5 0.4 0.2
Other Occupations Other Ethnicity 8.9 9.5 11.5 13.3 13.7 14.0 14.8 15.8 15.8
Other Occupations Total 100 100 100 100 100 100 100 100 100
Source: Census of Population and Dwellings, Statistics New Zealand
8

Table 4: Highest educational qualification of dairy workers and other occupations, 2006
Occupation Birthplace Highest Qualification Total Under 30 Years Total Over 30 Years Total 15 Years and Over
Dairy Cattle Farmer NZBorn No Qualification 38.4 44.5 43.2
Dairy Cattle Farmer NZBorn School Qualification 60.0 54.8 56.0
Dairy Cattle Farmer NZBorn Other Non Degree Qualifications 33.6 37.7 36.8
Dairy Cattle Farmer NZBorn Degree or Higher 6.3 7.5 7.2
Dairy Cattle Farmer NZBorn Total 100.0 100.0 100.0
Dairy Cattle Farmer Overseas Born No Qualification 12.3 16.0 15.2
Dairy Cattle Farmer Overseas Born School Qualification 50.0 45.1 46.2
Dairy Cattle Farmer Overseas Born Other Non Degree Qualifications 33.0 38.1 36.8
Dairy Cattle Farmer Overseas Born Degree or Higher 17.0 16.7 17.0
Dairy Cattle Farmer Overseas Born Total 100.0 100.0 100.0
Dairy Cattle Farm Worker NZBorn No Qualification 50.8 67.7 58.4
Dairy Cattle Farm Worker NZBorn School Qualification 63.6 55.0 59.8
Dairy Cattle Farm Worker NZBorn Other Non Degree Qualifications 31.7 39.6 35.1
Dairy Cattle Farm Worker NZBorn Degree or Higher 4.7 5.4 5.2
Dairy Cattle Farm Worker NZBorn Total 100.0 100.0 100.0
Dairy Cattle Farm Worker Overseas Born No Qualification 15.6 14.1 15.0
Dairy Cattle Farm Worker Overseas Born School Qualification 44.4 43.8 43.9
Dairy Cattle Farm Worker Overseas Born Other Non Degree Qualifications 35.6 37.5 37.4
Dairy Cattle Farm Worker Overseas Born Degree or Higher 20.0 18.8 18.7
Dairy Cattle Farm Worker Overseas Born Total 100.0 100.0 100.0
All Other Occupations NZBorn No Qualification 18.8 27.9 25.4
All Other Occupations NZBorn School Qualification 55.7 39.5 44.0
All Other Occupations NZBorn Other Non Degree Qualifications 25.8 38.8 35.2
All Other Occupations NZBorn Degree or Higher 18.5 21.7 20.8
All Other Occupations NZBorn Total 100.0 100.0 100.0
All Other Occupations Overseas Born No Qualification 8.0 12.4 11.4
All Other Occupations Overseas Born School Qualification 47.0 34.3 37.2
All Other Occupations Overseas Born Other Non Degree Qualifications 22.2 30.6 28.7
All Other Occupations Overseas Born Degree or Higher 30.8 35.1 34.1
All Other Occupations Overseas Born Total 100.0 100.0 100.0
Source: Census of Population and Dwellings, Statistics New Zealand
9

The following figures are drawn from the LEED dataset. The data presented focuses on
growth in employee numbers, worker turnover and incomes.
Figure 2 compares numbers employed in dairy farming and horticulture and fruit growing. In
this context horticulture and fruit growing will cover a wide range of workers including those
growing for food production as well as amenity horticulture. Figure 2 indicates a growth in
the number of dairy farm workers so by the end of the period the numbers employed are
higher than horticulture workers. For reasons that remain unclear, the growth in these data
between 2001 and 2006 is in contrast with the census which shows a decline. Figure 2 also
shows some relatively strong seasonality in employment in both areas of employment. For
dairying the peak each year is in the fourth quarter. The second quarter, effectively winter, is
always the low point in employment. This phenomenon may be explained by the practice of
‘Gypsy Day’, which happens on 31 st May/1 st June each year (Tipples and Lucock, 2004). It
is the period when share tenancies come to an end and new ones begin, and similarly for
employment contracts. The new staffs are then supposed to be ready for calving in the third
quarter, full production in the fourth, and the commencement of a new dairy farming year.
Figure 2
Source: Infoshare, Statistics New Zealand
When employment growth is converted to an index and compared also with overall
employment growth across the whole economy, the strong growth in dairy employment
shows up in contrast to the shrinkage in the census based data (Figure 3).
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Figure 3
Source: Infoshare, Statistics New Zealand
The worker turnover rate is calculated using the counts of accessions and separations, which
are defined using a reference date concept. Other workers may join and leave during the
reference quarter but not be present at the reference date. These workers are not included in
the counts of accessions or separations and are therefore excluded from the worker turnover
rate. Figure 4 shows that turnover rates always peak in the third quarter for dairying, that is
the spring quarter. The third quarter would correspond to calving, the highest workload
period and the most stressful time in the dairy farming year. It is when new employment
relationships from Gypsy Day are most tested and tend to fall apart, resulting in turnover.
Figure 4
Source: Infoshare, Statistics New Zealand
11

In terms of earnings the following data (Figure 5)
represent quarterly earnings.
are inclusive of tax.
include payments reported as lump sums to the Inland Revenue.
Figure 5 shows that those working on dairy farms have seen their quarterly earnings grow
over time and they are higher than for horticulture workers. However, earnings are still well
short of quarterly earnings across the whole economy.
Figure 5
Source: Infoshare, Statistics New Zealand
When the long hours worked by dairy workers are taken into consideration, they are very low
at an average level. However, once advancing up the dairy career structure rates do improve
quite quickly, as do the hours of work (Federated Farmers/Rabobank, 2010). Nevertheless,
only 39.4 percent of farmers record staff hours, leaving considerable scope for paying an
hourly rate of pay below the minimum hourly rate of pay set for a normal 40 hour week
(Minimum Wages Act 1983). They claim average hourly rates range from $14.67 for Farm
Assistants to $26.69 for Operations Managers. The statutory minimum rate is $12.75 or $510
for a 40 hour week.
Dairy farmers are very quick to count free housing as part of their employees’ rewards.
Anecdotal comment about housing in Mid-Canterbury suggests the stock of employee
housing has improved in quality over the last twenty years. However, that may be slightly
misleading as motel-type accommodation for young families with children does not work
well when parents need sleep and children are awake crying. Counsellors in the area report
relatively high rates of drinking and domestic violence among dairy workers (Rawlinson,
2010). Three quarters of farm workers are provided with accommodation. Some pay rent
(15 percent), some are taxed on the notional value of the accommodation (63 percent), and
for 19 percent it is part of their total remuneration package (Federated Farmers/Rabobank,
2010).
12

Temporary migrants
We now turn to looking at how the dairying industry is increasingly relying on temporary
migrants, particularly those from the Philippines. The following data are drawn from the
Department of Labour’s Application Management System. The department’s database
contains information about whether the applicant is the principal or secondary applicant, the
applicant’s sex, age, and, for the principal applicant, their occupation at the time of their
application. Here we just focus on country of birth and sex for temporary migrants. The data
are for June years and can involve a person being counted more than once. For example
someone may be given a one year temporary permit but then be recorded again when the
permit is renewed for a further period. Therefore the data should be treated as indication of
trends rather than absolute patterns of people.
Table 5 shows trends in temporary work permits for dairy farm workers. While the data from
2003/04 to 2006/07 are based on NZSCO classifications and the remaining data ANZCO the
overall patterns each year are comparable. Table 5 shows the number of temporary work
permits has been increasing.
Table 5: Number of temporary work permits issued for dairy farm workers
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Permits 516 650 641 880 1741 1957
Source: Department of Labour
Table 6 shows the nationality of permit applicants with the main countries listed. While
permit holders come from a wide range of countries a couple of patterns stand out. First, is
the very large increase in the number of permits issued to Filipino workers. But also
important is the number of permits issued to those from South American countries. These
data contrast with the 2006 census data that contains few workers from Asia or South
America and especially few Filipino workers. A substantial colony of Filipinos has taken
residence in Mid-Canterbury, around Ashburton (Wylie, 2009) with one estimate being more
than 200 Filipino families living in the area (Cropp, 2010). In Ashburton Sam Bruzo has set
up an organisation called the Filipino Dairy Workers in New Zealand Inc, an advocacy group
with 300 members (ibid). But no union appears to be active in the Canterbury dairy industry
at the present time, although there does seem to be some Amalgamated Worker Union
activity in Southland (McLaughlan, 2010). A local dairy farmer said they help find other
workers to fill jobs where there is a vacancy where one of their community works. That
would tend to explain why a local dairy farm employment agency was not keen on them and
preferred Indonesians, because it was largely putting them out of business. A number of the
problems facing migrant dairy workers in the South Island have been discussed in a recent
newspaper article entitled Muddy Waters (Cropp, 2010).
13

Table 6: Nationalities of dairy workers issued with temporary work permits, Main
countries
Nationality 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Philippines 16 40 74 278 806 898
South Africa 75 114 100 89 139 166
Fiji 1 3 18 22 75 130
Brazil 3 7 41 45 105 128
Chile 7 21 15 24 45 100
Great Britain 126 111 97 74 111 96
India 16 21 28 42 70 72
Sri Lanka 7 20 21 21 30 43
Uruguay 12 25 23 31 47 42
Nepal 7 7 2 8 13 33
Argentina 20 12 13 21 31 26
Ireland 39 26 28 24 16 26
Germany 8 9 10 14 27 20
Source: Department of Labour
In terms of gender, the temporary dairy workers are mainly men. For example of the 896
permits issued to Filipino workers in 2008/09 831 were issued to men. This is in contrast to
other streams of Filipino migration, such as for nurses and caregivers, which is female
dominated (Badkar, Callister and Didham, 2009).
Comparing with the RSE scheme
The number of temporary permits issued to dairy workers and where the workers come from
can be compared with the Recognised Seasonal Employer Scheme. In the year ended March
2009 a total of 7,158 workers came to New Zealand through the RSE Scheme. Of these most,
5,559 came from the Pacific, predominantly from Tonga, Vanuatu and Samoa. Of the
remaining 22%, most came from Asia. The largest number came from Malaysia (637),
followed by Thailand (529) and Indonesia (305). In contrast to dairying, only 75 came from
the Philippines.
Some options for securing a future diary worker labour supply
In a simple supply and demand model, if the terms and conditions for dairy workers were
sufficiently favourable then there would not be labour shortages due to local people wanting
to undertake such work. However, for the reasons already discussed, this is no longer a job
strongly sought after by many New Zealanders. In many other industrialised countries,
migrant workers, both legal and illegal, are increasingly filling the lower skilled jobs in the
primary sector.
There are four main ways of potentially drawing on migrants to fill low skill, low paid jobs.
One is through developing a stream for low skill permanent migration, another is through
standard temporary migration schemes and the third is through the development of a
specialist seasonal temporary worker scheme, perhaps along the lines of the Recognised
14

Seasonal Employer Scheme. The forth, which we will briefly discuss, is drawing on illegal
workers.
In terms of migrants who are working illegally, there are two main types. The first are
migrants who are illegally in New Zealand. Unlike countries such as the United States with
its relatively porous borders, New Zealand has little direct illegal migration. However, legal
migrants, even those with work permits, can become illegal if they overstay the length of
their permit. The other source is where a person comes in on one basis, such as for a holiday
and then undertakes paid illegal work. It is difficult to assess how many dairy workers may
be in either form of illegal work.
It would be possible to develop a set of criteria that would allow dairy workers to migrate to
New Zealand as permanent migrants. This gives the potential for a long term workforce to be
developed. The downside is that once in New Zealand, given the wages and conditions
offered such workers may not wish to remain in the dairy industry. In addition, once they are
permanent residents they would be able to migrate to Australia and undertake generally
higher paid work there, perhaps even in dairying.
Temporary work permits can be used to bind workers to a particular industry. Overseas there
are a number of examples of temporary worker schemes for primary sector workers. Williams
(2009) notes that in the US, the H-2A programme authorises employers to bring temporary
migrant workers into the country to perform temporary or seasonal agricultural work.
Williams outline how the Department of Labour oversees compliance with labour laws and
requires certification with, in theory, applications from growers being only made when there
are genuine shortages of domestic labour. Williams notes that the programme has been
criticised for being “notoriously unwieldy and underused” approving only about 75,000 jobs
for foreign workers a year, in a labour force of about 2.5 million seasonal and migrant farm
workers, well over half of them undocumented.
Williams notes that in theory the host of protections and benefits provided by the
Immigration Reform and Control Act 1986, are impressive including: housing, round trip
transportation, higher than federal minimum wage pay rates, and a guarantee of work for at
least three quarters of the contract period. However she highlights accusations of a bondagelike
system where, by law, the workers cannot change employers, remedies for labour law
violations are limited, and termination of employment subjects them not only to loss of jobs
but to deportation. Williams suggests there have been numerous documented abuses and
court cases in areas such as pesticide safety violations; poor housing conditions; provision of
dangerous transport; and violations of minimum wages and hours.
Williams also outlines Canada’s Seasonal Agricultural Workers Program (CSAWP). This has
operated to bring temporary workers from the Caribbean since 1966, followed by Trinidad &
Tabago, Barbados and Mexico in 1974, the Organization of Eastern Caribbean States in 1976
and Guatemala in 2003. According to Williams, the large majority (over 80%) of whom go to
Ontario for up to eight months (average is four) working on fruit, vegetable and tobacco
farms.
Williams comments that farmers must provide the migrant workers with free housing
(including meals or cooking facilities) and must guarantee them a minimum of 240 hours
work over six weeks at or above prevailing minimum wage rates. Employers must take out
workers compensation insurance to cover the migrants in the case of industrial accidents, and
15

must pay the cost of the migrants’ international airfare, which can be partially recouped.
While working in Canada the migrants pay local taxes, are entitled to pension plan
contributions, holiday pay compensation and are covered by Canada’s universal healthcare
system. However, Williams notes there is no right of family unification or settlement in
Canada permanently, even after many years of participation in the programme. In contrast, a
domestic worker scheme in Canada allows temporary workers to apply for permanent
residence (Williams, 2009).
The dairy industry may also be able to draw on workers who are in New Zealand on working
holiday permits. In Australia much of seasonal labour required for horticulture relies on those
in Australia on working holidays and this also remains an important source of labour for New
Zealand’s horticulture industry.
A final option is to develop a specific migration stream for dairying. Just like the RSE
scheme this could involve
focussing on triple win – ie having development objectives
focussing on the Pacific
have major supports for ‘pastoral care’ of workers
be closely monitored by researchers and policy makers
Developing such a scheme would require leadership from within the dairy industry, a point
we will return to.
There are costs and benefits associated with each type of migration for not only the host
country but also employers and for the workers themselves. Some of these are set out below.
16

Some of the impacts of low skill migration: advantages and disadvantages of Permanent
and Temporary schemes 5
Host
country
Sending
country
Low
skilled
migrant
Permanent migration
Temporary migration
Advantages Disadvantages Advantages Disadvantages
- Potential for long term
workforce
- Decreased transaction
cost
- Good, cheap &
available source of
labour.
- Development through
remittances
- Incentive to train
- Opportunity to
develop & learn new
skills
- Opportunity to earn
much more money,
especially if decide to
change jobs
- Improved standard of
living.
- - Unemployment & wage
impact on local & resident
workforce.
- Fiscal loss, as low skill
migrants may receive more
in public services (e.g. health
services) than what they
contribute in taxes.
- Intergenerational
transmission of
disadvantage, adding to
unemployment & social
exclusion.
- Unfavourable education &
labour market outcomes for
many children of loweducated
& low-skill
immigrants.
- Cutting into the high skill
residence quota.
- No certainty that people
will remain in those roles
once permanent residence
means they can seek work
anywhere in the economy
- Loss of skill (the most able
leave)
- Disruption of extended
families & social structures
- Initial and ongoing family
disruption.
- Overall low cost.
- Under a certain salary
/ wage, unable to bring
in dependents - this can
be associated with
increased cost in health
(disease burden) &
education.
- Development through
remittances.
- Skill gain through
return migration.
Potential for prime age
workers to remain
connected to their
communities
- Opportunity to
develop & learn new
skills
- Opportunity to earn
more money.
- Improved standard of
living.
- Ability to remain
connected into
community.
- Difficulty in protecting
temporary workers, who
could be geographically &
linguistically isolated (may
live on site with employer).
- Increased administrative
& logistic costs.
- Higher risk of
overstaying.
- Lack of continuity in
income through a
disruption in income from
remittances.
- Unable to change
employer as most
temporary migration
schemes prevent & limit an
employee’s right to change
employer.
- Exploited migrant
workers might be afraid to
complain for fear of losing
their sponsorship & being
sent home before
recovering their
investment.
- Cost associated with
migration may prevent a
prospective migrant from
considering NZ as a shortterm
stay may not be
enough to recover costs.
- Isolation from their
family & social ties in the
sending country.
5 Adapted from Badkar, Callister and Didham (2009)
17

Employer
Permanent migration
Temporary migration
Advantages Disadvantages Advantages Disadvantages
- One-off training cost
(but note disadvantage).
- Supply of low cost
labour.
- Migrant employee can
easily move jobs.
- Supply of low cost
labour.
- Migrant employee is
unable to move jobs
easily.
- Unwilling to accept
workers for short periods.
- Increased cost associated
with recruitment,
transportation, housing etc
- Increased costs associated
with training new cohorts
of temporary migrants, or
disruption if regular “in and
out”
A research and policy agenda
It is suggested that a combined research and policy based approach is needed to help solve
labour challenges in the dairy industry. As outlined in Tipples (2010) a precedent for the
type of research envisaged has already been set with the research underpinning the
development of the New Zealand Recognised Seasonal Employer (RSE) policy for the
horticultural and viticultural industries (Hill. Capper, Wilson, Whatman & Wong, 2007;
Tipples and Whatman, 2009). This approach was founded on a Finnish ‘change laboratory’
learning process and work research techniques such as Developmental Work Research (DWR)
and Cultural Historical Activity Theory (CHAT) (Engstrom, 1987, 1999, 2000, 2001). These
were underpinned by what has been called in New Zealand, the ‘pure business’ model, a
radical new inside-out approach to policy development (Whatman, Wong, Hill, Capper &
Wilson, 2005). It essentially involves achieving an understanding of all the activites and
parties involved in policy making and in enterprises in their historical context. Then from the
disaggregated parts, with a clear view of what is to be achieved, bringing those parts back
together in a more logical and supported way.
Conclusion
In Future Dairy Farm Employment Tipples et al. (2004) began:
“We know more about individual dairy cows than about individual farm staff, yet
they are the key to the future success of dairy farming in New Zealand.” (p.2)
Six years later we know little more and the problems have become so acute that the gaps are
being filled with a temporary migrant labour force. It has been suggested those gaps will get
bigger rather than smaller (DairyNZ, 2009).
We have encountered some problems with the clarity of definitions if different data,
particularly the LEED series, which need further exploration, but we now have a better
picture of the overall employment situation for the dairy industry.
Over the past decade the dairy industry has grown in land area, number of cows, milk
production and dairy exports to the point where it is New Zealand’s premier and a growing
exporter. Thus in a very small, fragile, peripheral economy, in world wide terms, the future
of the dairy industry is vital and that to a large degree depends on its people.
It appears in both the shorter and the longer terms that a migrant component to the dairy farm
labour force will be essential. There is a question as to whether this migrant labour can be
18

provided in a way that gives benefits to all stakeholders as has been achieved so far via the
Recognised Seasonal Employer scheme for horticulture and viticulture. A profound change in
the predominant anti worker culture of the industry is probably necessary to ensure all main
stakeholders, including governments, dairy companies, dairy farm employers, dairy farm
employees of all socio-economic statuses (whether or not migrants), contractors, service
personnel of all types, and the public at large, gain sufficient benefits to motivate them to
make the efforts necessary to negotiate a multi-win outcome. That needs to be supported by
a good research foundation, as suggested in the previous section, to ensure a lasting rather
than a temporary solution to the people needs of the industry and the future wellbeing of New
Zealand.
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