Australian small vegetable farms on the chopping block

A new report published by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) shows that the number of small Australian vegetable farms has reduced by over 24% in the past 12 months.

“Small business is the engine room of our economy. The lack of a thriving small business contingent within the vegetable industry can dramatically affect its long-term sustainability,” said AUSVEG Deputy CEO Andrew White.

The report, entitled Australian vegetable growing farm businesses, an economic survey, 2013-14 and 2014-15, was commissioned by Horticulture Innovation Australia using funds from the National Vegetable Levy and the Australian Government to conduct an annual survey of the industry.

“Small business provides jobs for 4.5 million Australians and produces over $330 billion of Australia’s economic output. Policy tends to be designed specifically with urban small businesses in mind,” said Mr White.

“The question needs to be asked, what can we do to help battling Australian small business farmers?”

Survey results suggest that of the bottom 25 per cent of farms, 61 per cent have indicated that increased farm input costs are the leading impediment to business viability.

“It is concerning that 13% of farms within this category have said they may leave the industry within the next 5 years,” said Mr White.

“Smaller sized farms do not have the ability to be able to benefit from economies of scale in the same way that their larger competitors can. Cost and price pressures are causing a lot of small business growers to exit the market completely.”

The ABARES report provides an in-depth analysis of vegetable farm cash receipts and costs by both farm size and state of operation.

“The cost to receipts ratio for farms less than 5 hectares in size is $0.86 per dollar of receipts. This means that for every dollar earned, 86 cents goes towards paying business costs. This is in contrast to those farms that are between 20 to 70 hectares in size and hold a cost to receipts ratio of $0.78 per dollar of receipts,” said Mr White.

AUSVEG is committed to working with all industry stakeholders including state and federal governments, vegetable growers and consumers in order to help support the long-term sustainability and economic viability of the industry.

The AUSVEG Economics program is funded by Horticulture Innovation Australia using the National Vegetable Levy and funds from the Australian Government.

AUSVEG is the leading horticultural body representing Australian vegetable and potato growers.   Ω

Posted 15 December 2015


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