The National Farmers Federation says high labour costs and an uncertain global economic agriculture outlook must be considered by the Fair Work Commission (FWC) when determining the minimum wage in the next financial year. 

The FWC has been taking submissions from the nation's leading industry, union, and advocacy groups as it conducts its annual region review. 

National Farmers' Federation (NFF) Chief Executive Officer Tony Mahar said the FWC must "strike a balance" between workers' needs and a farm businesses' capacity to pay for a wage increase. 

In its submission to the wage review, the NFF said, "Australian farmers have battled through a range of serious challenges that have plagued sustainable and profitable outcomes for their businesses. These include severe floods across Northern Australia, shortages and rising input costs such as fertilizer, diesel and chemicals, and labour". 

It told the Commission, which delivered 5.2 percent pay increase last year, that's $40 a week for workers on the minimum wage – to proceed with caution in raising minimum wages for the nation's 180,000 lowest-paid workers. 

"Labour is comparatively more expensive in Australia than international exporting counterparts," it argued while adding wages are the "highest cost on the agricultural sector." 

Unions are pushing for a 7% pay rise.

The Albanese Government promised to advocate for an increase for the lowest paid before it came to power.

Still, it can only do so at arm's length to the independent FWC - whose bench, not parliament, determines the minimum wage rate.

The Government has said in its submission pushing for an unspecified rise in the minimum wages that "While nominal wages growth has lifted, high inflation has seen real wages fall behind.

This is having the greatest impact on Australia's low-paid workers and their families – many of whom don't have the savings to fall back on or wages that cover the rise in living costs." 

Image: Fair Work Commission. 

Last year, Australians experienced their largest real wage decline on record, with overall wages growing by 3.3 percent in 2022, inflation at 7.8 per cent - a 4.5% gap.

The general consensus among the submissison is that inflation will finally drop, the differing groups use this same probability to support opposing views.

The NFF and business groups say this means it should temper pay rises downwards.

The ACTU wrote, "If inflation drops further, as it seems to be, this claim would then also begin to address the record deep cuts to the real wages that low-paid workers have suffered over the past two years". 

Australia's most prominent union also said last year's minimum wage rise had no impact on raising inflation. 

The ACTU secretary Sally McManus, said "a 7% pay increase is essential" as it would "help working people keep their heads above water". 

"It is simply about survival for the lowest-paid workers in our country," she said in a statement. 

However, the National Farmers Federation points to many big-picture economic factors- the drop in agricultural commodity prices, concerns about the price of food, drier conditions, natural disasters and crop abandonment, which it says will account for 16% of planted area in NSW. 

"In the medium-term, Australian farmers face a decline in gross production value, with a return to drier conditions and weakening global commodity prices. The NFF recommends that the Commission seriously considers these issues when making their determination until economic conditions for agriculture have stabilised, market volatility decreased, and the level of financial risk reduced," it said.