This is how the market responds to shortages of agricultural labour

The New Zealand Herald reported on Monday:

An Australian recruiter hopes the transtasman travel bubble will help fill huge shortages of labour on Australian farms.

In November the Australian Government began offering $2000 for New Zealanders to relocate to help with the shortage of horticulture and agriculture workers...

Like New Zealand, Australia is experiencing a huge shortfall in staff in the agriculture and horticulture sectors.

Incentives to attract workers such as free accommodation, food, increased pay rates and even cash bonuses are being offered.

The Queensland Strawberry Growers Association has offered cash prizes of up to $100,000 to entice workers to get involved in its winter harvest.

Think about the labour market for agricultural workers in Australia. If there is a shortage of workers, that means that the market wage must be below the equilibrium wage, as shown in the diagram below. The quantity of labour demanded (QD) exceeds the quantity of labour supplied (QS) at the market wage W1. There are more jobs available than there are workers to fill them. So, what do employers do? If they are willing and able to pay a higher wage, they could find themselves a willing employee, and offer to pay slightly more than W1, to ensure that they get that worker to work for them. So, employers will bid the wage up, until eventually the market reaches equilibrium at W0, where the quantity of labour demanded and quantity of labour supplied are both equal to Q0.

However, sometimes it isn't the wage that adjusts. Sometimes, the employer instead offers some other inducement to ensure that they aren't the employer who is short of workers. That's where the other incentives (free accommodation, food, cash bonuses, etc.) come in. If enough employers offer these additional incentives, that may encourage additional workers to enter the market, increasing the supply of workers. This is shown in the diagram below. The supply of labour has increased because of an influx of Kiwi agricultural workers, shifting the supply curve to the right at S1. Now the market is operating at equilibrium, with the wage at W1, and the quantity of labour supplied (and demanded) is equal to QD.

Of course, that would then have flow-on effects on the labour market for agricultural workers in New Zealand, where the supply will reduce and the shortage of agricultural workers will increase. That's going to make business very difficult for New Zealand farmers. So, it will be interesting to see if farmers in New Zealand are willing to match the incentives being offered in Australia, to prevent New Zealand-based workers from departing.