Middle East conflict: Good faith engagement on farm inputs and costs needed to maintain vegetable supply for Australians

AUSVEG is urging all supply chain businesses and participants to engage sensibly and constructively with the Australian vegetable growers they supply to ensure the burden of recent surges in key input costs flowing from the conflict in the Middle East can be equitably absorbed, to ensure Australian families have continued access to Australian-grown fresh vegetables.

Additionally, AUSVEG is emphasising the importance of coordinated, system-wide national planning and contingencies from government to address current, medium and longer-term impacts of the conflict, to protect the integrity of the Australian vegetable industry and supply chain, to protect Australians’ health and food security.

In ongoing representations to government, AUSVEG continues to highlight:

• Fresh fruit and vegetable producers must be considered as a priority sector for any government-directed fuel allocations.
• National efforts are required to ensure enough fertiliser is being secured, brought into the country and stockpiled, amid ongoing supply disruptions and fierce global competition.
• Where necessary, government should devote resources to cooperating with global supply chain companies to secure Australian access to critical farm inputs.
• Early planning is required to prepare for any future need for fuel or fertiliser rationing, due to a protracted conflict. If rationing is deemed necessary in future to protect food production, it is essential systems, plans and mechanisms are in place to ensure smooth implementation.
• Government should undertake an urgent and critical assessment of threats to national food security and engage across industry and the supply chain. This assessment must consider both on-farm and flow on impacts of any fuel shortages, such as workers’ capacity to travel to and from work at critical horticulture businesses, particularly in regional areas.

Concerns over fuel and fertiliser supply in the initial weeks of the conflict have already led to significant price increases in these key farm inputs, and shortages in parts of the country.

The ongoing volatility has also led to major cost increases for other inputs and services growers require to deliver their produce to market. Additional fees and levies charged by some service providers, has led to some costs for growers doubling overnight.

Business and operating conditions in the Australian vegetable industry were already extremely tight even before the Middle East conflict, and vegetable growers’ position in the supply chain as price-takers means most have limited to no capacity to pass on their own production or business costs increases to their customers.

Given vegetable growers have no capacity to absorb these latest production cost increases, AUSVEG is emphasising the importance of all participants in the supply chain engaging in sensible and good faith discussions that seek to ensure margins for all businesses are fair, and cost increases can be absorbed across the whole national supply chain.

These measures are critical to ensuring farmers are protected, that Australian families are shielded from the risk of food cost increases, and that fresh produce supply can be maintained for national health, and future food security.