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TAS Country : May 3rd 2012
32 Tasmanian Country Friday, May 4, 2012 News Food issue unpalatable truth Globalisation tilts the playing field OVER the FENCE John Rich IMPORTED: Chinese garlic; farm workers are paid a low wage. A MUCH experienced international business friend recently asked for my views about globalisation and, in par- ticular, was this good for Australia. My initial reaction was to try to make a comment of a positive nature --- along the lines that Australia is part of the world and that our future relies on us being active and holding our place in that world. The politicians seem to like to trot out the globalisation word on regular occasions, always implying that this is good for Australia and it is up to industries to accept the realities of the global economy and adjust accordingly. Politicians refer to globalisation as it relates to trade but globalisation is across a range of topics --- political, economic, cultural and technological. Instead, I turned my focus to an industry I have been associated with in Tasmania for more than 30 years, the vegetable industry. I came to the conclusion that trade globalisation for the Tasmanian, and the Australian, vegetable industry was not a good thing at all. It allows trade from external sources to reduce our ability to increase farm production, and reduces our opportun- ities to add value to our local economies. The issue, as I see it, is that the playing field is tilted very much against Australia. We are required to compete in a global economy where the rules and regulations in competing countries are significantly different from those that apply here. The law requires Australian farmers to pay farm workers a minimum wage, plus all sorts of add-ons. The last time I looked at this, the all-inclusive rate for unskilled farm labour was around $25 an hour. When talking with some German farmers recently they ex- pressed amazement at how high this was. Their labour cost was about $5 an hour --- paid to immigrant workers, from Eastern European countries. The president of Horticulture New Zealand recently wrote that the two main reasons NZ could export fruit and vegetables to Australia was largely due to the exchange rate and lower labour costs. Australian farmers cannot do any- thing to reduce farm labour wage rates and they have no influence over exchange rates. I suspect that the NZ exporters to Australia also may have the benefit of favourable shipping freight rates. The playing field is not level. China is another issue altogether. Chinese farm and factory workers are paid an extremely low wage. Even though reports indicate that the wage rates are increasing, it is noted that the base is so low that any noticeable increased wages impact on prices for commodities will be around 20 to 30 years away. China has a massive cost advantage in labour when compared to our regulated situation. Millions of Chinese people and immigrants from neigh- bouring poor countries, are employed in rural situations and reports indicate there are also millions of people seek- ing employment. A personal observation from visits to China is the apparent lack of regulation for farm chemicals and pesticide use. There are plenty of reports of food safety issues emanating from China that support that view. The lack of Chinese occupational health and safety issues also would indicate that China is a long way behind what our farms and factories are required to adhere to, by law. Once again, the playing field is not level in the context of globalisation. There is no way we can ever hope to compete with China. Australian auth- orities require our farms and factories to rigidly adhere to rules and regu- lations and at the same time the same authorities appear to take no interest in the fact that food produced in China does not have to conform to anything slightly resembling our food safety and other regulatory requirements. Globalisation is also now having an impact on Australia's ability to main- tain food security. We only have to look at the level of imports of food items in the supermar- kets. Imported canned foods, frozen foods and other packaged foods have replaced many Australian-produced items. Every single food item imported into Australia replaces food items that we can produce and weakens our ability to have self-sufficiency with food production. The new leader of the Greens, Senator Christine Milne, recently stat- ed that the Greens' policy was to make sure Australia had food security. While this is exactly what Australia needs, it is now incumbent on Senator Milne to articulate the full mechanical details and time frame regarding how the Greens' policy will be implemented within the framework of the Labor/ Greens Government. The time is now urgent for positive action to be taken by the relevant decision-makers on the issue of food security for Australia. We also need to know where Tas- manian food producers will fit into the scheme of things. I am reminded of what seems to be numerous vegetable industry develop- ment, strategic and marketing plans that have been written during the last 10 years at the national and state levels. Perhaps it could be interesting to have a report card on the outcomes and progress to date of these documents. The latest is that the ''Australian Government is developing Australia's first ever national food plan which will ensure that the government's policy settings are right for Australia over the short, medium and long-term. The aim of the plan is to foster a sustainable, globally competitive, resilient food supply that supports access to nutritious and affordable food. The government envisages that the natio- nal food plan will better integrate what it already does, and help identify if and where a better approach might be needed''. I wonder what this will actually do and when. In the meantime, we are rapidly going down the gurgler because we are high-cost food producers, having to deal with a myriad of rules and regulations, not forgetting the very uneven playing field, over which pro- ducers really have no control. And remember, primary producers will be facing increased costs from July 1, as a direct flow-on to farm input costs from the Gillard Government's Carbon Tax. The cost of fuel and electricity and probably the cost of many other inputs will surely increase and farmers will not have the ability to recover such cost increases. This is yet another blow to farmers' competitiveness. Tasmanian farmers are good at food production and any action taken to assist with movement towards food security can only be done if the farmers have direct input and complete involve- ment/commitment to the outcomes.
April 26th 2012
May 10th 2012