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Costs of Wages

I watch with interest the argy-bargy between a Tasmanian meat processor and their work force over wages.

It seems to me if the processor gives a full increase or indeed any increase you can bet your bottom dollar the processor will ensure that he keeps his margin and as usual he will pass his extra costs back to the producer, who of course is bottom of a barrel and cannot hope to pass his increases on to anyone.

Everyone is entitled to a fair days pay for a fair days work, however it is worth remembering farmers burden a huge risk with prices, weather, interest rates, increasing production costs etc, all these variables farmers have no control over. However those working for a wage are assured a living wage, holidays, leave loading, workers Comp and sick pay the list goes on.

Australian workers are probably the best paid with great conditions than other developed countries around the world. Australia’s minimum wage coming in $32,000 New Zealand $18,000 and the USA $15,000 and add the penalty costs and conditions that Australian workers have come to expect, we could ask are we living beyond our means.

This is not meant to be nor is it a swipe at those working for a wage, however if our Governments continue to drive a free market economy you have to ask “can we continue to compete on a global scale and be competitive?”

I suggest farmers are irreplaceable and our economy would fold if we don’t have profitable the stable farmers.

Our so-called whingeing farmers are expected to compete against wages and conditions and our wage earners take as a right and expect more. As an added bonus a lot of our competing countries ensure that their farmers are subsidised in many ways.

At present we have open trade policy’s where highly subsidised products with lower production costs from overseas are freely available in our supermarkets, and the general public expect the cheapest possible product.

For the supermarkets point of view they continue to tell all sorts of government committees that the producer is getting between half and two thirds of the retail dollar. The fact is the producer is lucky in some cases to get 10% of the final retail price.

There are other obscure costs that many don’t see like the added burden of a producer with a large patch of Bush that simply can’t be cleared for pasture or cropping because of land clearing bans and the farmer is obliged to pay rates, maintain and fence it at his cost on behalf of the community.

In Europe and other countries the farmer is paid to keep their land in a natural condition, as an eco-system service for the community, why not here?

In Australia cattle producers are burdened with huge costs and we have every imaginable layer to ensure our beef is the best in the world, many would think it is fair that farmers get properly paid for this, believe it or not Australian beef producers get the lowest prices in the developed world for their stock.

As it stands a producer received $1.80 / kg in 2000 now in 2013 he receives $1.80 / kg for the same cattle however the spending power of the $1.80 is now worth $1.26 or so as a 400 kg beast was worth $720 in 2000 now brings in the princely sum of $504 in 2013 .I bet wages in Australia have not fallen like that.

The eastern standard indicator bought out by the MLA (to monitor cattle prices) suggest the price of cattle has dropped since this time last year, however prices of meat into Japan and USA have both seen significant price increases. It becomes apparent that everybody’s margin will continue to rise at the expenses of the producer. The quicker that our politicians and the general public realise that the whole food chain and the people employed in that food chain are totally reliant on the farmer working long hours for little reward. This includes veggie, dairy, meat producer, the list goes on. What is apparent is that people employed in the processing sector would have a lot more to worry about if farmers are forced out of business. Surely governments should be getting the appropriate information and acting to ensure that producers remain viable.

David Byard

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