AUSVEG is calling for greater urgency and clarity on plans to relieve surging input costs and shortages for vegetable growers, as widespread uncertainty continues to destabilise the sector and threaten supply of Australian-grown fresh produce for Aussie families.

Following today’s National Cabinet meeting, the Government has announced a National Fuel Security Plan, comprising four levels of response. With the Government having confirmed the response is currently focussed on level two of the plan, Keeping Australia moving, a halving of the fuel excise for three months, and pausing of the heavy vehicle road user charge has been announced.

These measures may provide some short-term cost relief particularly for consumers and transport businesses, however urgent, targeted action is still needed to address compounding pressures on vegetable producers, and to provide clarity on how growers will be prioritised for access to critical farm inputs like fuel, fertiliser and freight.

As vegetable growers continue to be squeezed between surging production costs and challenges passing these costs on to their customers, AUSVEG is also calling for greater scrutiny on the retail sector from regulators, such as the Australian Competition and Consumer Commission (ACCC) to ensure evidence-based price increase requests from growers to their customers are enacted in good faith. Current reports from growers indicate they are only receiving incremental increases, a fraction of their total increased costs.

A week-long, snap survey of more than 200 vegetable growers by AUSVEG, which closed over the weekend, shows 28 percent have reduced or stopped planting schedules due to severe operating uncertainty flowing from the Middle East conflict, and a further 16 percent are actively considering their options. Growers who have opted to reduce planting schedules have done so by an average of 35 percent.

As widespread uncertainty from surging input costs and supply concerns in parts of the country continues putting vegetable producers under immense pressure, the survey’s findings highlight the urgent need for targeted and immediate measures to address the severe challenges that are jeopardising the 10,000 tonnes of fresh produce that Australian vegetable growers supply to market each day.

These include:

• 76 percent of growers indicated they have just three weeks or less of diesel supply, with 15 percent having a week or less worth, 34 percent having just two weeks’ worth and 27 percent having just three weeks’ worth.
• Growers indicated their diesel costs on average have increased by 75 percent since the end of February.
• Growers indicated current fuel surcharges on freight are averaging almost 40 percent.
• 47 percent have just three weeks or less of fertiliser supply, with 7 percent having a week or less worth, 19 percent having two weeks’ worth and 21 percent having three weeks’ worth.
• Growers indicated their average fertiliser costs had increased by 53 percent since the end of February – although some were yet to place new orders as they worked through existing stock, meaning the full extent of price pressure and shortages may not yet be captured.
• Of these significant production cost increases, growers indicated they had only been able to pass an average of 9.7 percent to their customers.

AUSVEG CEO Michael Coote said: “The ongoing uncertainty and instability is not sustainable if supply of safe, fresh, quality Australian vegetables is to be maintained for all Australians. All governments need to understand the crucial importance of the national vegetable industry to Australia’s basic food security, as well as the industry’s specific needs as part of an urgent national response.

“Australian vegetable growers produce 98 percent of the essential fresh vegetables consumed by Australian families, and supply 10,000 tonnes of fresh produce into the market each day, so it is critical for Australia’s food security for vegetable producers to continue operating.

“To maintain production in businesses that operate 52 weeks of the year, growers must have certainty over the availability and cost of the key inputs they need to inform their weekly planting and harvesting decisions. Governments need to take all available steps to provide that certainty, not only immediately, but well into the next few months given the often-short, cyclical nature of vegetable production.

“AUSVEG’s survey found growers on average require more than 5,200 litres of diesel in a typical week. This amounts to almost 2.7 million litres across the vegetable industry each day, almost 19 million litres a week, and almost a billion litres a year.

“Without greater certainty over supply and costs of fuel, Australia’s vegetable industry cannot function, and the same goes for other key inputs like fertiliser, freight and packaging.

“The nature of Australia’s national vegetable industry means impacts are being felt differently in different vegetable growing regions of the country, and the overall national picture remains very concerning as growers reconsider their planting schedules and options. While fuel, freight and fertiliser are key cost pressure points, growers are reporting that price rises, or additional surcharges are affecting all areas of their businesses, from packaging, crop protection products and new fuel surcharges on service call-outs, which are all leading to further financial pressures.

“When you add the additional challenges growers are facing passing on their recent major cost increases to their customers, we can expect more will adjust their plans accordingly – particularly when there are no guarantees a crop planted today will be able to be harvested in few weeks, and even if it is, there is no guarantee of a viable price.”

AUSVEG acknowledges recent government plans to underwrite delivery of additional fuel shipments, the commencement of a National Food Supply Chain Assessment, and the National Fuel Security Plan.

“In all of these responses it is fundamental that Australian vegetable growers, as an essential sector for the health and wellbeing of all Australians, receive the reassurance from government that they will be provided with priority access to critical inputs like diesel, fertiliser and freight.”

Key priorities for government must include:

• 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.
• Urgent release of plans explaining how vegetable producers will be prioritised for access to critical inputs like fuel, fertiliser and freight as part of the Government’s response.
• Establish a fertiliser taskforce, and urgently outline plans including government efforts to ensure enough fertiliser is being secured, brought into the country and stockpiled, and how vegetable growers will be prioritised for access.
• In the event fuel and fertiliser rationing is deemed necessary, confirm plans outlining the systems and mechanisms to be implemented, including how vegetable growers will be prioritised as an essential sector.
• To ensure supply of essential fresh produce, detail how priority access to freight and refrigerated transport for vegetable growers will be achieved.
• The National Food Supply Chain Assessment must consider both on-farm and flow-on impacts of all supply chain weaknesses or shortages impacting vegetable growers.
• Delay or pause the implementation or reporting of non-critical compliance and regulation, such as annual sustainability reports and climate related financial disclosures.
• Delay the implementation of any export cost recovery fees and charges.
• Ensure that the banking sector supports vegetable growers with initiatives such as loan repayment deferrals, waiving fees and charges, and increased client support to assist growers navigating unforeseen additional production costs.