Australia's vegetable industry shrinking under pressure from cheap imports

Monday, 04 April, 2016

Statistics showing a 5% decline in Australia’s vegetable industry have prompted a warning from industry body AUSVEG over the impact of foreign vegetable imports.

Figures released by the Australian Bureau of Statistics (ABS) show that the 5% decline in the gross value of the vegetable industry in 2014–15 coincided with a 15% decline in the number of vegetable-growing operations in Australia and a decrease of nearly 12,000 hectares in the total area sown to vegetables during the same period.

Meanwhile, vegetable imports to Australia rose by more than 7% across the same period, prompting AUSVEG to voice the concern 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.”

AUSVEG quotes statistics collected from Global Trade Atlas which show increases in imports across a wide range of vegetable products over the last financial year, including 24,000 additional tonnes of frozen potatoes, 1500 tonnes of whole tomatoes and 780 tonnes of frozen peas during 2014–15.

Kruup attributed Australia’s competitive disadvantage in part to the higher costs of production for Australian farmers compared to overseas growers.

“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.”

Originally published here.

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