Relentless margin squeeze continues to challenge vegetable industry viability

An ongoing cost-of-production crisis and lack of farm profitability has again led to a third of vegetable growers considering leaving the industry within the next year – with more still indicating they would do the same if offered a fair price to buy their farm.

The results of the survey, which was open from December 2024 to February 2025, affirm a range of worrying indicators that have been regularly recorded in the six-monthly surveys conducted by AUSVEG since 2023.

Key findings which continue to raise major questions about the future supply of Australian-grown fresh vegetables include:

• An average of 32 percent of growers across all sentiment surveys since 2023 considering leaving the industry.
• An additional third of growers in the most recent survey not currently considering leaving would change that position if they were offered a fair price to sell their farm – meaning two thirds of growers surveyed would stop growing vegetables if the right exit strategy arose.
• Almost 50 percent of growers were again financially worse-off than a year ago.
• Almost 40 percent of growers expected to be financially worse-off in another year’s time, compared to 28 percent in the middle of 2024.
• Growers are continuing to delay or reduce investing in capital infrastructure improvements (81 percent), innovation and productivity improvements (56 percent) and maintenance of assets (46 percent).

With the 2025 Federal election expected to be called any day now the survey results should ring alarm bells. AUSVEG is continuing to emphasise the need for all political parties to commit to the measures needed to secure the long term viability of a vegetable industry which Australia relies on for 98 percent of the fresh produce consumed here.

Future viability

The latest results mean on average, 32 percent of vegetable grower respondents to the sentiment surveys conducted each six months since 2023 have contemplated ceasing vegetable production within a year.

Of those who indicated they are considering leaving in the most recent survey, 58 percent indicated they would sell the farm, 32 percent would keep the farm but switch to different agricultural enterprises, and 10 percent indicated they would lease the farm to other growers or farmers.

In a further concerning sign, 47 percent of respondents to the most recent survey who were not currently considering leaving, said their position would change if they were offered a fair market price for their farm. This means two-thirds of respondents to the latest survey would consider leaving the industry if the right exit strategy presented.

In a continuation of the trend from previous sentiment surveys, rising input costs, poor farmgate returns, workforce shortages, industrial relations changes, lack of funds to invest in innovation, and an overwhelming compliance burden have again been identified as the key factors leading growers to reconsider their futures.

The protracted toll of the dire business environment on growers also saw mental health and wellbeing concerns feature prominently in considerations to leave the industry in the most recent survey.

From our regular engagement with vegetable growers around the country, AUSVEG knows some growers have already stopped producing vegetables and others will do the same unless conditions improve.

For many others, it has only been the lack of viable alternatives that has kept them producing vegetables, and for those remaining, many we know from survey feedback are reducing production capacity and/or diversifying into alternative income streams.

Losing vegetable growers at anywhere near the scale indicated by the surveys has major implications for future vegetable supply – causing consumer prices to increase and threatening food security in the longer term.

Lack of profitability and capacity to invest

Close to half of respondents again indicated they were financially worse off than a year ago. 39 percent of growers in the most recent survey also expected to be worse-off in another year’s time, compared to 28 percent in the mid-2024 survey.

The survey also recorded an ongoing trend of growers being unable to invest in their business with 81 percent reducing or delaying capital infrastructure improvements, 56 percent reducing or delaying investments in innovation and productivity enhancements, and 46 percent reducing or delaying spending on maintenance of assets.

Workforce shortages and costs

Nearly 50 percent of respondents indicated they were experiencing workplace shortages in full time, part time and casual positions, across skilled, semi-skilled and unskilled roles – compared to 33 percent in the mid-2024 survey.

25 percent of growers expected workforce shortages to continue into June 2025, with only 4 percent expecting conditions to improve. The dearth of skilled and semi-skilled employees in regional Australia also continues with 55 percent of growers with shortages, experiencing drastic (16 percent) or significant (39 percent) shortages in permanent full-time roles.

Labour costs also continued to represent a major proportion of overall business expenditure, averaging 41 percent of a grower’s overall cost of production, and reaching as high as 72 percent in the top 10 percentile, in the most recent survey.

AUSVEG election priorities

Last November AUSVEG launched its 2025 Federal election priorities, which were informed by the findings from previous Industry Sentiment Surveys, and aimed at addressing the many challenges growers are facing.

With Australian growers currently producing 98 percent of the fresh vegetables consumed nationally the election commitments are critical to preventing an exodus from the industry, and dire flow-on impacts for consumer prices and food security.
The priorities outline 21 specific commitments needed from all parties contesting the next election, under the pillars of

• Secure supply,
• Skills and workforce stability,
• Structural supports for business.
• Sustainable future.

Secure Supply

Consumption and Engagement
AUSVEG is calling for a bi-partisan, $125 million, five-year commitment to increase woefully low national vegetable consumption.

Recent industry research has shown that if we can get every Australian eating just one more serve of vegetables by 2030, then there is a massive, $4.7 billion in value to be added to the industry, and the economy.

That includes: a $3.3 billion economic benefit across the vegetable supply chain and vegetable growing regions; the creation of 13,000 additional jobs; and, $1.4 billion in healthcare budget savings, due to reduced, dietary linked disease.

Food Security 
A call on politicians to adopt the recommendations of the Australian Food Story: Feeding the Nation and Beyond report, which backs efforts to increase and maintain vegetable processing and food manufacturing capability. Australia must also increase sovereign production capability by investing in domestic production facilities for inputs like fertiliser, chemicals and other inputs.

Competition
Once the ACCC Supermarket Inquiry is completed AUSVEG is asking politicians to commit to immediately updating the new Food and Grocery Code with any relevant recommendations.

Skills and Workforce Stability 

Workforce
The industry is calling for the introduction of a properly resourced National Labour Hire Licensing Scheme to tackle unethical labour hire providers, supported by a well-resourced Fair Work Ombudsman, and Australian Border Force.

Migration
Horticulture relies on overseas labour for on-farm production. Commitment is needed to maintain the current status of the Working Holiday Maker Visa, including the 88-day work requirement, without additional compliance and regulation.

Commitment is also needed to reducing barriers and streamlining adaptability of labour agreements to help attract international workers.

Additionally, AUSVEG has called for the introduction of a short-term harvest or agriculture visa, and the introduction of a longer-term visa scheme which includes nations like India, Indonesia and Vietnam.

Structural Support for Business

Business
AUSVEG has called for the introduction of instant asset write-off with a $50,000 threshold for businesses with a turnover of $50 million or less, for investment in productivity-increasing assets like machinery and processing equipment, as well as capital assets like accommodation.

Resources including IT and software solutions are also needed to help growers comply with complex workforce schemes and payroll.

Trade and Market Access 
Higher priority must be given to vegetable commodities, including greater levels of ministerial involvement.

There must be increased resourcing for the Department of Agriculture, Fisheries and Forestry and Department of Foreign Affairs and Trade to focus on non-tariff trade barrier and red tape reduction.

Sustainable Future

Sustainable Eco-Systems
Commitment is needed to the introduction of a sector specific grant program to encourage investment that enhances vegetable farm sustainability. This includes renewable energy, biofuel plants and water efficiency initiatives.

AUSVEG is calling on all parties to heed the warnings coming from our sector, and to act now – before it is too late.

You can download AUSVEG’s election priorities here

For more information, contact AUSVEG National Public Affairs Manager Lucy Gregg at lucy.gregg@ausveg.com.au, or 03 9882 0277.