The program, introduced by the Howard Government, had been undersubscribed, a spokeswoman for Education Minister Julia Gillard told the Australian Financial Review.

The cost of continuing the program could be covered from within the existing budget, she said.

The National Farmers’ Federation says the farming sector needs 100,000 more workers and the apprenticeship grants were helping to plug the gap.

“As farmers come out of drought, they’re going to need a higher skilled workforce than ever before,” spokesman Brett Heffernan said.

“It’s 100,000 workers that we’re going to need.”

Labour shortages would be most acute in the grains, sheep and cattle industries. Farmers had been dismayed at the government’s original decision – announced in February – to cut the program.

Nationals Member for the Riverina Kay Hull said she is pleased the Labor Government has decided to reverse its decision to scrap incentives for agricultural and horticultural apprentices.

“Our rural industries are doing it tough enough as it is without the loss of this program and I am pleased that the Labor Government has recognised that its retention will encourage people to stay and work in regional areas strengthening the sustainability of towns in these regions such as the Riverina,” Mrs Hull said.