Influential lobby groups have declared a program to encourage welfare recipients to work on farms a failure, putting new pressure on the Morrison Government to create a dedicated agriculture visa to fix labour shortages in the rural sector.

The $27.5m Seasonal Work Incentives Trial has only found placements for 333 people with six months left to go on the two-year program, falling far short of its 7,600 possible places.

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"It has been running for two years now and when you have a take-up rate of 4 to 5 per cent, that would suggest it won't improve dramatically, so I would have thought it was [a failure]," Ben Rogers, general manager for workplace relations at the National Farmers' Federation, said.

"It's been tracking low since the program was launched [in mid-2017] and it's consistent with the message we hear from our members — that the domestic seasonal workforce isn't interested in doing harvest work."

The low uptake rate comes despite Prime Minister Scott Morrison promoting the trial on a trip to South Australia in October, saying unemployed people could have their benefits reduced if they did not take up local jobs.

"If you're fit and you're able and you're available, then you should be working, not taking the dole," Mr Morrison said at the time.

The program, which was demanded by the Nick Xenophon Team in support for the Federal Government's controversial backpacker tax, offers those on the dole a cash incentive of up to $5,000 a year if they sign up for local harvest jobs.

It was designed not to affect welfare payments, in the hope it would lead to ongoing employment.

"The trial has been promoted pretty aggressively by the Department of Jobs and we have helped with that, we encouraged people to pick it up, but it just hasn't worked," Mr Rogers said.

"We applaud the Government for making the effort, we don't want to discourage them from trying new things, but this one doesn’t look like it's working."

Ausveg chief executive officer James Whiteside said it was hard to call it a success, as there were not a lot of people participating.

"The demand for [farm] labour in Australia is in the tens or hundreds of thousands, so 333 people is a drop in the ocean and doesn't move the dial at all," Mr Whiteside said.

Centre Alliance MP Rebekha Sharkie says there may be other issues at play as to why so few people are taking up the scheme. ( ABC News: Matthew Roberts )

"It just demonstrates the fact there's a whole lot of jobs in our economy that are very difficult to find Australians to do.

"What our industry needs isn't people who are begrudgingly there or because they are forced, but people who are willingly, ready and able to do the work."

A spokesperson for Central Alliance MP Rebekha Sharkie, who pushed for the program under NXT, said the program was "not a failure or a waste of money", pointing out that 90 of the 333 participants have found a permanent job through their placement.

"However, the uptake is disappointing and Ms Sharkie has asked for further analysis of why it hasn't been higher, to find out if there have been any barriers for job seekers, such as access to transport or accommodation," the spokesperson said.

The Federal Government's track record with addressing farm labour issues is set for further controversy this week, as international tax accounting firm, Taxnback.com, prepares to challenge the validity of the government's backpacker tax in the Federal Court in Brisbane on Wednesday.

The company argues the tax contravenes non-discrimination clauses built into tax treaties that Australia has signed with the UK, the US, Germany, Finland, Chile, Japan, Norway, and Turkey.

Reigniting the ag visa debate

In November the Coalition Government announced changes to existing backpacker and seasonal worker visas, in a bid to quell rising tensions in the National Party over the lack of progress on a dedicated agriculture visa.

A backpacker from Denmark picking apples on Queensland's Granite Belt. ( ABC News: Marty McCarthy )

The changes enabled foreign workers to stay in regional jobs for longer than six months, and to stay a third year in Australia if they did extra farm work. The requirement that these jobs only be in northern Australia was also scrapped.

The Government also relaxed the Seasonal Worker Program, enabling Pacific Islanders who come to Australia for farm work to stay three months longer.

However, Ausveg said these changes did not address the seasonal nature of harvest work, and has renewed calls for the creation of a more specialised visa for dedicated agriculture workers.

Backpackers harvest trail As harvest begins along the summerfruit trail, growers come to terms with fallout from the backpacker tax debate. Read more Read more

"If a farmer has a requirement for short-term work [these visa changes] don't work, because it's hard to move from one employer to another," Mr Whiteside said.

"We aren't hung up on names like an 'ag visa'. What we want is a bunch of visa settings that give us access to a flexible, willing, reliable, and competent workforce.

"We just want something that has been designed for our industry, not something cobbled together for something else."

The National Farmers' Federation agreed, saying it welcomed the recent changes to existing migration programs, but that a long-term solution was needed.

"[An agriculture] visa would not just address labour shortages but also the flow-on effects, like the stories of underpayment, mistreatment and abuse of workers, which we think is a symptom of the underlying problem of workforce shortages," Mr Rogers said.

At the National Farmers' Federation annual conference in October, the Prime Minister said the industry would get one, but did not say when.

"Yes, we will work to establish an agriculture visa, that is the long-term solution and even the medium-term solution," Mr Morrison said in October.

The Government said it first wanted farmers to register their labour needs with the National Harvest Labour Information Service, so that it could identify exactly where worker shortages existed, so that it could tailor the creation of new visas around that.

"One of the biggest frustrations I've had as a minister in this government and one that continues now as PM is getting an accurate read on labour shortages," Mr Morrison said.

"I hear plenty of anecdotes, but I don't get enough hard data. If we are going to make these changes — and we will — I am going to make sure they are targeted to the areas where the labour shortages are."

The NHLIS has identified 3,000 farm jobs since it was launched in mid-October, according to the Jobs Minister, Kelly O'Dwyer.

But the Opposition said the Government has had enough time to develop an agriculture or regional work visa model, and to identify where labour gaps were.

"This process really should have begun when the Government miss-stepped when it introduced the backpacker tax — something we opposed," Opposition Agriculture spokesman Joel Fitzgibbon said.

"So we have lost five years in effect under this government and we haven't got a moment to lose, so I would urge the government to act quickly.

"Labor has made every commitment to work with the sector and the Morrison Government to address both problems — the workforce shortage and the exploitation in the sector — and I hold out hope the Government might bring something of weight forward between now and the next election."

The creation of a new visa that addresses worker shortages in regional Australia is further complicated by the fact it crosses a number of parliamentary portfolios with competing agendas, such as agriculture, regional development, jobs, immigration, foreign affairs, international development and the Pacific.

Immigration Minister David Coleman, who is overseeing the task, has not responded to the ABC's request for an interview.