THE federal government is under pressure to take a good look at its own actions and their consequences on high food costs rather than directing the spotlight entirely at supermarkets.
Prime minister Anthony Albanese's recent move to put supermarkets through a 12-month price probe conducted by the national competition regulator has been applauded by the horticulture sector as an important step towards better market transparency.
But the industry has also blamed Canberra for a succession of rulings which have contributed to production cost hikes of between 30 per cent and 65pc in the past four years, or will add new costs during 2024.
Margins are now so low, or in the red, that 2024 would be the "make or break year" for fresh produce supply chains, according to peak farmer body Queensland Fruit and Vegetable Growers.
After already copping extensive losses from unseasonably wet conditions in 2020, 2021 and 2022, plus soaring crop input costs and the labour and supply chain setbacks caused by the COVID pandemic, many growers were now struggling with far more complex and costly labour hire arrangements.
Government-related labour cost increases and extra administration demands, plus cuts to Canberra's backpacker workforce expectations, rated as the biggest reason for a predicted big exodus of vegetable growers from the industry Australia-wide this year.
Grower exodus
A SURVEY by industry body, Ausveg in the second half of 2023 found 34pc of producers were considering leaving vegetable production within 12 months and 72pc were experiencing workforce shortages.
Almost half rated their future viability with current workforce shortages as "poor to very poor".
Ausveg tipped frequent fresh produce shortages would be "the new norm" and shoppers would bear the brunt with higher produce prices if a third of vegetable growers stopped production.
"There's no doubt supermarkets play a substantial role in the challenges our growers face, but they are one part of a very complex puzzle," said QFVG chief executive officer, Rachel Chambers.
Queensland produces a third of Australia's fruit crop and 20pc of the nation's vegetables.
Ms Chambers said it wasn't just retailers' pricing tactics the industry wanted thoroughly scrutinised.
Strategies supermarkets adopted to secure often excessive supplies of perishable produce, also leaving growers carrying most of the market risk, were among a range of behaviours requiring investigation in what Ms Chambers described as a "broken marketplace".
However, more needed to be done than just have the Australian Competition and Consumer Commission examine relationships between farmgate, wholesale and retail prices and their impact on consumers or farm profitability.
Policies have impact
"WHILE the Prime Minister and treasurer Jim Chalmers are rightfully invested in putting the big players under intense scrutiny, let's not forget the government itself is responsible for higher costs to growers and causing consumer price pain," she said.
Typical of cost blowouts attributed to poorly thought through rulings was the Fair Work Commission's November decision to implement a minimum hourly payment rate for piece workers harvesting or planting seasonal crops.
"Incentives for good fruit pickers to work quickly have diminished because their piece work is no longer worth much more than a slower operator," Ms Chambers said.
"Farmers' labour costs have risen, the harvest is taking longer and many farms are less productive and re-considering their options."
Similarly, the Pacific Australia Labour Mobility (PALM) Scheme's on-farm labour costs had jumped from a typical $27 an hour to $38/hour, plus transport and accommodation, plus overtime if visiting Pacific Island labourers worked more than 38 hours a week.
The pay deal also requires PALM workers' minimum wage to be pegged above the entry level wage of other horticulture industry workers.
Labour pains
PACIFIC Islanders in Australia to work under the PALM visa scheme now number about 40,000 a year, but National Farmers Federation horticulture council executive officer, Richard Shannon, said the scheme's increased complexity and costs were undermining its appeal with farmers, despite the serious labour shortages plaguing the sector.
"Higher administration costs alone have forced labour hire companies to add at least a $1 an hour to the cost of contracting each PALM scheme worker to a farm," he said.
"That may not sound much, but 40,000-plus workers doing 40 hours a week adds up to a lot of extra industry expense to absorb.
"I think we can assume PALM scheme employment options have probably peaked."
He noted other government endorsed cost burdens such as the looming biosecurity levy on farmers, set to cost the agriculture industry $50 million a year to cover the cost of beefing up import surveillance and inspections to prevent disease or pest arrivals from overseas.
Canberra's new agricultural water licence buybacks from Murray Darling Basin added another dimension to the challenge of rising cropping costs and food production restrictions.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
