Australian vegetable growers are continuing to question their economic viability as more than a year's worth of low or negative margins threaten the long-term sustainability of the industry.
The insights are contained in a new Ausveg Vegetable Industry Sentiment Report, which affirms that 34 percent of commercial vegetable growers are considering walking away from the sector in the next 12 months.
Rising input costs, poor farmgate returns, workforce shortages, industrial relations changes, lack of funds to invest in innovation, and an overwhelming compliance burden have again been identified as the key factors leading growers to reconsider their future.
Ausveg conducts twice-yearly sentiment surveys, which have drawn responses from large, medium and small commercial vegetable growers from all Australian states and the Northern Territory to provide a current and cumulative picture of sentiment across the national industry.
Highlighting the intense pressure being felt by commercial vegetable growing businesses, 50 percent of respondents to the most recent survey indicated they were financially worse off compared to mid-2023, and almost 30 percent indicated they expected to be financially worse off in a further 12 months.
Challenging business conditions have led to almost 50 percent seeing their future business outlook as either very poor, or poor, and a further 37 percent ranking their outlook as average.
Workforce shortages and labour costs have continued to feature among growers' biggest challenges, with 46 percent indicating they were struggling to source enough staff in full-time, part-time and casual positions, and a range of skilled, semi-skilled and unskilled roles.
Labour costs have remained another major issue, averaging 38 percent of a grower's overall cost of production, and reaching as high as 71 percent.
Successive surveys have also reflected changes in the workforce mix. Following adjustments to workforce schemes relied upon by growers, engagement with the Pacific Australia Labour Mobility (PALM) scheme has reduced, and reliance on backpackers has increased.
More than 62 percent of grower respondents to the survey also indicated that the removal of the 88-day specified work requirement for working holiday visa extensions would have a severe or critical impact on their business.
The impact of some of these challenges on Australia's food security have been somewhat masked by recent favourable weather conditions and fewer supply chain disruptions. However, ongoing margin squeeze and difficult conditions, combined with any further set-back, could easily trigger a cascade effect that results in reduced production, higher consumer prices, and increased reliance on imported product.
Ausveg CEO Michael Coote, said the report presented a concerning picture. "While the economic challenges and uncertainty which have hit the wider Australian community have played a role in the difficulties facing commercial vegetable growers, many of the issues contributing to this crisis in vegetable farm viability are the result of legislative, regulatory and policy settings that have been imposed upon the industry," said Mr Coote.
"Our industry is in an extremely tenuous position, with growers leaving, considering leaving, or just one more set-back away from leaving. With more than a third of respondents continuing to consider leaving the sector, it is clear that growers have, and will continue exiting until the situation improves. Without that meaningful improvement, there are serious implications for the viability of Australia's vegetable industry, as well as our longer-term food security." said Mr Coote.
"Workforce is one example – with nearly half of growers this year experiencing workforce shortages, it is only due to their resilience and perseverance that they have managed to continue producing the vegetables, potatoes and onions that Australians depend on. A suite of carefully considered, fit-for-purpose solutions are needed from Government, to ensure Australia's vegetable industry remains viable, now and into the future. This includes recognising that growers need a range of workforce options given the significant geographic and production system diversity that exists in the industry." mentioned Mr Coote.
A focus on bolstering Australia's waning vegetable consumption is among the solutions proposed by Ausveg, to help reverse the industry's fortunes.
Recent industry research has identified that Australians may be eating as little as 1.8 serves of vegetables per person per day when wastage is taken into account – less than the already low average of 2.4 serves reflected in official statistics.
That same research has identified that by lifting vegetable consumption by just one serve per person per day by 2030, there is potential to achieve a $3.3 billion net vegetable supply chain economic benefit, and $1.4 billion in healthcare system savings due to reduced dietary-linked disease burden over time.
For more information:
Andrew MacDonald
National Communications Manager
Ausveg
Tel: 03 9882 0277
Mobile: 0406 836 330
Email: [email protected]
www.ausveg.com.au