Farmgate prices must increase to keep growers viable: Veg boss
THE spiralling cost of farm inputs such as petrol and fertiliser will drive up the prices of fresh produce to the consumer rather than the loss of fruit and vegetable crops caused by the recent flood and rain event in Queensland and New South Wales.
That’s the summation of Growcom CEO Stephen Barnard which was given in response to questions on whether the crop losses would have an impact on fresh produce prices on the supermarket shelves.
And he has called on retailers and buyers to ensure that farmgate prices that growers receive for their produce better reflect the current economic climate to ensure the financial viability of farmers.
“The effect in the grocery aisle [of the flood event] should be negligible as the crops grown in the hardest hit areas are also grown in other parts of Australia,” Mr Barnard said.
“Our markets are national in scale, and production is spread far and wide.
“In summary, it’s unlikely one natural disaster could be so catastrophic as to rock the horticulture industry, any one crop, or the supply chain.”
But he argued that prices for fresh produce should be higher and continue to increase.
“Recent analysis completed by Ausveg, the national peak body for the vegetable industry, shows growers are dealing with record prices for farm inputs, yet there remains virtually no movement on price at the farm gate and retail level,” Mr Barnard said.
“This means growers are continuing to bear the brunt of global trade conditions, absorbing rising costs of chemical, fertiliser, fuel, lumber and labour costs without any relief in price from buyers.”
The analysis revealed that key agricultural inputs, both fertiliser and fuel, have on average increased in price over the past two years by 110 percent.
“While all horticultural businesses vary in terms of their production costs, vegetable growers’ businesses are facing between 25 to 40 percent increase to their cost base,” Mr Barnard said.
“In the same period, a basket of the most common vegetables, carrots, potato, lettuce and broccoli, has only cost consumers 7.5 percent more, while other agricultural commodities like wheat, cattle and milk have risen by 39, 136 and 22 percent respectively.”