Vegetable growers lack confidence in the industry’s future

Results from the Grower Confidence Survey, conducted by national peak industry body AUSVEG, show that grower confidence in the vegetable industry has declined by 3.5% during the July to September 2015 quarter when compared to the previous quarter. The survey involves a selection of 10 questions relating to how confident growers feel about key economic indicators, including macroeconomic confidence, investment confidence, market confidence and confidence in government policy.

The confidence index has been constructed on the basis of these survey results in relation to an initial survey conducted for the quarter ending March 2015.

“Australian vegetable growers are becoming more uncertain about the sustainability of their future within the industry,” said AUSVEG CEO Richard Mulcahy.

“Producer confidence levels are found to be strongly correlated with, and a leading indicator of, turning points in economic activity. If growers lack confidence in the industry they are less likely to invest and expand their operations, in some cases resolving to leave the industry all together.

“These results are concerning for all stakeholders in the industry, as the most recent data on the gross value of the vegetable industry shows that it has declined by over 6.88%.

“A reduction in investment can have detrimental effects on industry jobs growth and production.”

The results show that confidence levels in government and investment have both declined over the survey period, supporting the overall decline in grower confidence. The government confidence index has declined by 28.4% over the quarter and the investment confidence index has declined by 6.3%.

“Investment confidence is measured through survey questions designed to understand grower sentiment towards future input costs such as labour, fuel or freight costs,” said Mr Mulcahy.

“The most recent report conducted by the Australian Bureau of Agricultural and Resource Economics and Sciences shows that production costs have increased by an average of 4% since 2012-13. These latest survey results prove that production costs may now be having an impact on grower confidence and therefore continued investment and growth within the industry.”

AUSVEG is the peak industry body representing Australian vegetable and potato growers.

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

Posted 18 November 2015