As the Middle East conflict continues severely impacting and disrupting vegetable growers across Australia, AUSVEG continues to advocate for necessary short, medium and longer-term government commitments and action.

These commitments are urgently needed to help growers weather and navigate the immediate severe impacts and challenges, and to protect the viability of Australian vegetable producers, and supply of Australian-grown fresh vegetables for all Australians into the future.

AUSVEG policy priorities for government commitments

Immediate-term

• Horticulture as an essential industry: Confirm Australia’s vegetable industry as an essential sector of national importance to enable priority access to inputs like diesel (through the Liquid Fuel Emergency Act 1984.) and other critical inputs such as energy and fertiliser.
• Expand the Economic Resilience Program to primary industries: While the announced $1 billion National Reconstruction Fund Corporation program providing interest free loans of up to $5 million for eligible businesses with annual turnover of up to $100 million may be accessible to some growers depending on the nature of their business, it more specifically targets logistics and manufacturing businesses. This program should be expanded to specifically include primary producers.
• Real-time fertiliser availability dashboard: Uncertainty over fertiliser availability continues to undermine confidence in the horticultural sector, as growers continue planning planting schedules over coming weeks and months. A real-time dashboard is required to advise of current and forecast fertiliser stock levels to provide growers with confidence to proceed.
• Commit to a behaviour change campaign to increase vegetable consumption: The risk and perception of higher fresh vegetable prices flowing from the conflict are shaping consumers’ purchasing behaviour. With consumption already critically low at 1.8 serves of vegetables per person, per day, historic evidence suggests this will fall even further without proactive action. AUSVEG continues to advocate for government support for a national, evidence-based, multi-channel behavioural change campaign to increase domestic vegetable consumption by one serve per person per day.
• Reduce compliance and regulation burden: The burden and cost of compliance remains a key area where major productivity-enhancing reform could be implemented quickly, with immediate economic benefits to the industry that also mitigates risks of future consumer price increases. Compliance costs growers an estimated $213-$250 million annually, representing 4.3% of farm costs. For an industry with average EBITDA margins of just 9%, this represents a crushing 42% drag on profitability.AUSVEG continues to advocate for the adoption of 34 recommendations from its Horticulture Compliance and Regulation: Reducing the Burden by 2030 report aimed at reducing duplication, improving certification and audit process efficiency, moving towards more results-focussed compliance, and a streamlining of government processes and support services.AUSVEG is also advocating for the delaying or pausing of implementation or reporting of non-critical government compliance and regulation, such as annual sustainability reports and climate related financial disclosures.
• Finance industry support: Given the unprecedented surges in production costs and businesses’ inability to pre-plan amid the immediate crisis, AUSVEG urges banks and other financial institutions to support vegetable growers with initiatives such as loan repayment deferrals, waiving fees and charges, and increased client support to assist growers navigating unforeseen cost surges, and budget stress.
• Maintain workplace attendance:  Acknowledging fuel costs and availability concerns, AUSVEG urges State and Federal Governments to plan for measures that responsibly maintain workplace attendance to protect food production and supply chain integrity.
• Regulator scrutiny: As growers continue facing challenges passing severe production cost surges on to their customers, AUSVEG is urging greater regulatory scrutiny on the retail sector from the ACCC to ensure evidence-based cost increase requests from growers to their customers are enacted in good faith. AUSVEG supports the current ACCC investigations and surveillance into fuel prices and surcharges and seeks similar ACCC scrutiny for other supplies and services to prevent opportunistic price gouging across the supply chain.

Short to medium-term

• Productivity improvements through infrastructure upgrades: The cost-of-production crisis and lack of farm profitability, which has worsened since the Middle East conflict, has severely curtailed growers’ capacity to invest in their horticultural businesses. Stagnant investment represents a major risk to the productivity and viability of individual farms and the vegetable industry. AUSVEG is calling for the establishment of an Innovation Grant Program funded via a dedicated interest free loan allocation through the National Reconstruction Fund, to help growers replace ageing machinery and other farm assets with more modern technology, to improve productivity and mitigate production cost surges.
• Taxation incentives for productivity initiatives: AUSVEG is recommending an enhanced Instant Asset Write-off scheme with a $50,000 immediate deduction threshold for businesses with a turnover under $50 million, to mitigate major risk to the productivity and viability of individual farms and the vegetable industry.
• Competition reform: As retailers remain the most significant consumer outlets for fresh vegetables, grower-retailer relations remain pivotal to maintaining supply of fresh Australian-grown vegetables. AUSVEG continues to advocate for continued reform in competition policy and the Food and Grocery Code of Conduct to ensure equity in the grower-retailer relationship and adherence to the Code.
• Energy cost relief: The Middle East conflict has again reinforced ongoing industry concerns over escalating energy prices. Growers continue reporting further increases in gas prices, and widespread nervousness over potential further electricity price increases. A more coordinated approach to regional energy infrastructure is needed, paired with stronger pricing transparency and regulatory oversight to address structural issues in energy markets. Ensuring an adequate supply of affordable gas for commercial and industrial users is also essential.For an industry reliant on energy-intensive operations like irrigation, cooling, processing and storage, relentless energy cost increases are eroding profitability and undermining long-term viability, and AUSVEG is calling on State and Federal governments to cooperate to stabilise energy pricing.

• Horticulture-specific sustainability grants: The current fuel crisis has highlighted the vulnerability of the supply chain across horticulture. Direct funding to foster adoption of farm sustainability-enhancing infrastructure, including renewable energy, biofuel plants, and water efficiency is needed in the form of allocations from the Future Made in Australia Fund.

Medium to long-term

• Sovereign capability of essential inputs: The Middle East conflict has once again exposed the lack of strategic investment, or ongoing support of, domestic facilities manufacturing critical farm inputs such as fertiliser, agricultural chemicals, and packaging to insulate the industry from geopolitical supply chain shocks. COVID-19 exposed the vulnerabilities of the supply chain for critical farm inputs, and whilst industry has called for increased sovereign manufacturing capability for six years there has been no increased capacity. Further allocation from the National Reconstruction Fund (over and above the current allocation for fertilisers) is needed to increase sovereign capability for essential inputs such as packaging, and crop protection products.
• Maintain food manufacturing capability for long-term food security: AUSVEG continues to raise significant concerns about the acknowledged trend of consumers increasingly purchasing cheap, imported processed vegetables. While this may be a response to the cost-of-living challenges, it continues to impact the viability of Australian fresh vegetable growers and existing vegetable processors. AUSVEG continues to emphasise the importance of Federal Government leadership to support local food manufacturing as part of the National Food Security Strategy, and advocates for an interest free loan scheme through the Future Made in Australia Fund for capital investments that improve productivity, and manufacturing sustainability.