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TAS Country : March 29th 2012
8 Tasmanian Country Friday, March 30, 2012 Opinion Price takers get rough end of deal CHEWS theFAT David Byard BOUNTY: Farmers absorb cost of production. WATCHING a current affairs program recently I listened intently to an interview with an investment banker who had bought $10 million worth of water in one of Tasmania's water schemes. He also was interested in buying more and felt there was a possibility of buying land to go with it. This man has a fantastic repu- tation from buying into a fish farm enterprise and turning it around to make it an immensely valuable business. Farmers are unique in more ways than one. A producer is a price taker not a setter. This makes a vast difference from people in other walks of life who can set their prices and can increase prices if wages or their inputs go up. On the other hand, the farmer is expected to absorb all cost increases and accept the price that is offered. In the program, it was mentioned that water allows farmers to have guarantees. What touched a nerve is that there are are no guarantees that a crop grown and harvested will cover the cost of production. However, everybody talks about new crops that may be developed in the future. I have no doubt that we will get new crops, whether they be broadacre or small niche crops -- will they be an economic proposition? Who knows, time will tell. Onions are a great example. This has been a very valuable crop over the years and in 2008-2009 Tasmania grew 99,000 tonnes of onions. This year we have seen a glut of onions particularly in Europe and this has led to the processors looking for every excuse to get out of their contracts. This has led to some companies looking for things like white root rot which is common in onions. One producer had hundreds of tonnes of onions and spent a great deal of money spraying his onions in an effort to keep white root rot at bay. This included advice from the company field officer and then this company decided his onions were not suitable as they had root rot. This farmer was left with no other choice but to disc them back into the ground. Some farmers believe that processors should have better mar- keting intelligence and should know the risks before letting out contracts. Another grower I spoke to felt the company he dealt with would nor- mally have sorted out the problem onions and taken the whole crop. Specifications by supermarkets are another problem. The perfect shape is a must and if produce does not look the part then it will be knocked back. People growing veg- etables in the backyard don't seem to worry about the perfect shape and it hasn't done anybody any harm. When speaking to a producer about the costs associated with his onions, he pointed out that he grows a variety of other vegetables and other produce. There are other costs associated with growing vegetables including auditing. For this farmer they are in excess of $15,000 per year and on top of this is the cost of compliance. Another of the many problems farmers have is that they must rotate crops. For example, potatoes cannot be grown in the same soil year after year, and it is felt that with a warmer climate rotation will become more important. On top of this, shipping costs and the price of fuel and fertiliser is certainly hitting our farming sector and making it hard for our vegetable farmers I didn't find one farmer who didn't feel that they could grow 10 times more than they grew now. However, most I spoke to were scratching their heads as to how they could grow those crops profitably. Clearly irrigation schemes will give those farmers who can tap into them a greater choice of crops. I am sure driving around in 10 years time many farms will look very different from today. However, surely the time has come to put the horse before the cart and start to work out what the true costs are to the farmer; whether we can grow these crops economically. We also need to know and have a comparison of growing costs. All costs compared to the mainland and, in fact, overseas. What would be a disaster is to have any gains made through irri- gation strangled out of the farmer through government increases in red tape, costs, and crumbling infrastructure. With two thirds of the world's population residing in two countries, then things may change and supply and demand will ensure that food will become a valuable source. Meanwhile, perhaps the time has come that the DED, TIAR and DPI get their heads together and do a proper analysis of what economic value the irrigation push will bring. As all farmers know, they buy retail, sell wholesale, and pay the freight both ways. Perhaps some equity in the profit pie would help. TASMANIAN ALKALOIDS 2067106-120323 FIELD OFFICERS Do you enjoy working outdoors in a rural environment? Enjoy meeting and dealing with farmers? Want to be part of Tasmania's leading value adding agricultural company? If so, this position may interest you. As we are significantly expanding our growing area we are looking for self-motivated people, with proven ability and lots of common sense, to work as part of our dynamic team in Field Operations. Candidates should have a background in the Agricultural sector. Qualifications in Agricultural Science or similar are desirable. Computer skills an advantage. For a copy of the position description, please contact us on 6393 5202. If you feel you meet the above criteria, written applications should be forwarded either by email to firstname.lastname@example.org or post to: Organisational Development Coordinator Tasmanian Alkaloids Pty Ltd PO Box 130, Westbury, Tas 7303 Applications close on Friday, 13th April 2012
March 22nd 2012
April 5th 2012