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TAS Country : August 5th 2010
Friday, August 6, 2010 Tasmanian Country 7 TFGA DIMINISHING RETURNS: Farms costs rise as shelf prices fall. Food security at heart of matter TFGA matters with Jan Davis ' The biggest falls in prices in the quarter were for --- guess what? ' THE latest statistics spelling out the cost of living in Australia demonstrate the bizarre situation facing farmers. We have an inflation rate of just over three per cent, as measured by the Consumer Price Index (CPI), with the last quarter, to the end of June, of 0.6 per cent. Significantly, from the point of view of Tasmanian farmers, is that the biggest falls in prices in the quarter were for --- guess what? Fruit and vegetables, down 4.8 per cent and three per cent respectively. I didn't actually notice our costs of production reducing by 4.8 per cent or three per cent, did you? In fact, automotive fuel rose 2.1 per cent in the same period. The irony continues with the biggest CPI increases being for fast foods and restaurant meals. The great divide for farmers between costs and revenues continues to widen. This then at a time when we should all be sharply focused on the question of the role Tasmanian farmers should play in the critical concept of food security. In other words, how we help sustain ourselves and the world in the most vital commodities, food and water. The Tasmanian Farmers and Graz- iers Association has been a vocal advocate of the quest for Australia's food security in light of climate change, population growth and the globalisa- tion of markets. At the same time we have to reduce our reliance on imports while also enhancing our own prospect of produc- ing greater food exports. In our view, it requires a network of initiatives that includes agricultural research, enhanced biosecurity, re- formed water policies across all governments and improved road, rail and port networks. In Tasmania, it starts with the Food Bowl vision being implemented. Australia is one of the few countries that is able to feed its own population from its own land and still export food. It is small but significant. We con- tribute less than two per cent of the world's food production and only 0.4 per cent of fruit and vegetables, but we can't take the continuation of that situation for granted. The little players in Australia are important here. Food security starts with the farmer who, as the latest CPI figures demonstrate, is a price taker and has little capacity to pass cost increases up the supply chain. The related question is the mainten- ance and, preferably, expansion of the area of arable land in Tasmania. There is a critical mass, which depends on the development of the irrigation schemes here that hold the key to what we can do in the future to secure supply. Price, the cost to the farmer, is everything. Also related is the issue of labelling --- the branding of our produce to tell the market where it comes from and what standards have applied in its production. That goes for niche pro- duce as well as bulk commodities. In this context, reputation is everything. I come back to my initial point, though. It is bizarre that our farmers can be among the most efficient in the world yet they face a seeming law of diminishing returns for the effort they put in. We need a plan. ANZ Australia s best value agribusiness bank. As awarded by CANSTAR CANNEX 2009 and 2010. Financial Services Research Group CAN STAR CANNEX compared 15 major agribusiness banks, credit unions and building societies to determine the bank that o ered the best value to agribusiness. Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. ANZ s colour blue is a trade mark o ANZ. CSAATC ANZ772 15 C We understand that you re not just looking for a bank. You need a partner who understands your business and the unique challenges you face. That s why we re proud to introduce more specialists to our constantly growing Agribusiness team. And with ANZ in over 300 regional and rural locations, there s a good chance there s someone close to you. Whether it s on your property, at your o ce or over the phone, make an appointment with an ANZ Agribusiness Manager. Visit agribusiness.anz.com or call 1800 462 474 today. To help you grow, we ve stocked up with 100 new ANZ Agribusiness anagers and Assistant anagers.
August 12th 2010