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Aust vegetable growers struggle in "challenging environment"

09 July, 2014

Australian vegetable growers are continuing to do it tough, with average profits plummeting, according to the latest data released by the Australian Bureau of Agricultural Resource Economics and Sciences (ABARES).

In 2012-13, Australian levied vegetable growers' average profit was estimated to have fallen to $5,000, a reduction of more than 90 per cent or around $60,000 from the previous financial year.
"This new data re-iterates previous AUSVEG messages that Australian levied vegetable growers are currently operating in a challenging environment," said AUSVEG, Economist, Shaun Muscat.
Increasing production costs
"Although many variables are contributing to this added financial pressure, increasing production costs are undoubtedly one of the major reasons," said Muscat.
Since 2005-06, Australian levied vegetable growers' cash costs have increased by over 140 per cent, whilst cash receipts have only grown by less than 95 per cent. 
"This means that Australian levied vegetable growers' cash costs have outpaced their receipts, causing significant financial pressure and hardship," said Muscat.
AUSVEG is the leading voice in Australian horticulture, representing 9,000 vegetable and potato growers.
However, these messages are not unique to levied vegetable growers as this is largely consistent with previous reports undertaken on behalf of the entire vegetable industry.
The National Vegetable Levy covers over 100 different vegetables including, carrots, pumpkins, sweet corn, peas, beans, lettuce, broccoli, cauliflower and capsicums. 
Long-term initiatives
"Whilst the majority of growers are undoubtedly experiencing difficult conditions, growers must continue to actively pursue initiatives and opportunities that reduce the total cost of production over the medium to long-term," said Muscat.
"Such opportunities could include re-negotiating existing, or entering new, energy contracts for lower prices, and purchasing machinery that will increase productivity, and substitute for labour," said Muscat.
"Furthermore, Australian vegetable growers should explore export opportunities, particularly in Asia. Affluence and population in Asia is expected to continue growing, resulting in significant increases in demand for premium quality vegetables from Australia," said Muscat.
This project has been funded by HAL using the vegetable industry levy and matched funds from the Australian Government.
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Martin Moran | Wednesday, July 9, 2014, 11:50 AM
The Australian farming industry is one of the most efficient sectors in the world however Farmers are price takers not price makers and the industry will continue to decline until such time as people are left with only imported vegetables with unknown providence. The big two buyers dictate the market prices by their contracts and pressure to accept the price offered or they will not buy from the growers. Until the duopoly is broken into a dozen retailers then the decline in the industry will continue. A very sad state of affairs.