Federal Agriculture Minister Tony Burke said the scheme would allow up to 2,500 people from Kiribati, Tonga, Vanuatu and Papua New Guinea to work here for seven months in any 12-month period.
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The guest workers would be sent to help pick fruit and vegetable harvests and would be filling "a chronic labour shortage in some parts of Australia", Burke said.
"For too long Australian farmers have become sick to death of watching their own fruit rotting on the vine because they couldn't get a worker there to pick the fruit," the minister told reporters in Sydney.
The announcement comes ahead of Prime Minister Kevin Rudd's attendance this week at the annual leaders' meeting of the Pacific Islands Forum in Niue.
The guest worker pilot scheme, which is set to begin later this year, has long been requested by Pacific Island nations.
Burke said the guest worker programme was not a matter of finding cheaper workers to solve chronic labour shortages.
"This does not allow for the