Vegetable growers expect cost and food price increases from Carbon Tax

The release of the Gillard Government plans to put a tax on carbon is likely to spell bad news for vegetable and potato growers around the country as the industry faces further increases in electricity costs on top of already extraordinary increases.

AUSVEG Chair, John Brent, said that there seems to be little understanding of the difficulties already facing growers around Australia who have been hit with massive energy increases before the tax was even announced.

AUSVEG is the National Peak Industry body for Australia’s 9,000 vegetable and potato growers.
“Electricity is critically essential to food production; without it irrigation can’t be operated and produce can’t be refrigerated. Any increase to electricity prices will have further adverse impacts on the bottom line of these businesses” Mr Brent said.

While agricultural emissions have been excluded from the carbon tax and the fuel excise has been left in place for a short while, the ‘storm’ for vegetable and potato production will be the increasing costs of power and in 2014 the increases in our transportation costs.
“The prospect of further substantial capital outlays for farm transport equipment in 2014 by growers shows little appreciation of the current reluctance of banks to provide the necessary finance facilities for most growing operations” said Mr Brent.

“I acknowledge there are many programmes being announced to help educate and explore new energy options, but the ability of growers to extricate themselves from the energy spiral is not immediately apparent.”

“We are pleased that some assistance will be forthcoming for the food processing sector that is rapidly diminishing and moving offshore. We are worried, however, that our overseas competitors will have another advantage when selling produce into the Australian markets.”

“When you walk down the aisles of at least one major supermarket chain, you will now struggle to find any Australian produce amongst their frozen vegetable selection. Is this what we want-a total dependency on overseas suppliers for Australian food?”

“I doubt that the people in Canberra appreciate the critical reliance we have on energy for irrigation and refrigeration. I fear that this will lead to more growers failing as a result of their inability to pass on the anticipated increases,” said Mr Brent.


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