Agribusiness

Alarm by dramatic fall in veg production

Peak industry body Ausveg is sounding the alarm over the impact of foreign vegetable imports on Australia’s vegetable industry, with the gross value of the vegetable industry in Australia declining over the past year.

New statistics released by the Australian Bureau of Statistics (ABS) show that the gross value of the vegetable industry declined by 5 per cent in 2014-15, with the number of vegetable growing operations in Australia declining by 15 per cent in the same period.

The past year also saw a decrease of nearly 12,000 hectares in the total area sown to vegetables.

Meanwhile, vegetable imports to Australia rose by over 7 per cent across the same period, prompting concerns that Australian growers are suffering from a competitive disadvantage against cheaper imported produce.

“This drop in the number of vegetable growing businesses is extremely alarming, and is a definite danger sign for the future of the Australian vegetable industry,” said Ausveg Economist Andrew Kruup.

“We are facing a flood of cheap imports from foreign vegetable producers that are having a detrimental impact on the Australian industry, with many growers being forced to cease operations due to an inability to compete in the domestic market,” said Mr Kruup.

Statistics collected from Global Trade Atlas show significant increases in imports across a wide range of vegetable products over the last financial year.

This includes an increase of 24,000 tonnes of frozen potatoes, 1,500 tonnes of whole tomatoes and 780 tonnes of frozen peas during 2014-15.

The growth in vegetable imports can, in part, be attributed to major agricultural exporting countries including China, Italy and the United States, which exported a combined total of 198,255 tonnes of vegetable produce into Australia in 2014-15 alone.

“The competitive disadvantage faced by Australian vegetable farmers is partially due to their higher costs of production compared to growers in overseas industries,” said Mr Kruup.

“Labour costs in Australia are significantly higher than those in other countries, representing almost a third of the total production costs for the average farm. This naturally has an impact on the ultimate price of produce.”

“The Australian vegetable industry is feeling the effects of this competitive disadvantage against cheap imports, and the overall size of the industry is in decline. If this trend continues, the overall viability of the Australian vegetable industry will be under serious threat.”

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