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Political Bonanza

We hear from our politicians the mantra, we have to stand on our feet, the market will determine the best use of the dollar, market forces will prevail, we have to become efficient, and a range of other catch cries.  

A free market, I think it is called and I gather this applies to people who don’t believe in subsidies and tariffs etc.

In Australia tariffs and subsidies are a dirty word, maybe this is good thinking however the problem starts when the playing field is not on level terms.

Australian agriculture has many links to the production chain, there is the farmer, cartage contractor, agents, processors, manufacturers, shippers, etc, all who are taking a bite out of the pie before the consumer finally buys the product.

One major component of the chain are the Australian processors and manufactures who have a huge impact on the price of our agricultural goods and are trying to compete on a very competitive playing field with one hand tied behind their backs.

Producers in Australia are at a huge disadvantage competing against imported agricultural products, in most instances we are competing against produce that is highly subsidised arnd has very low costs of production.We compete for market share with Asia it is worth comparing the cost we compete with that is wages I have done a comparison of Southeast Asia and other countries Australian producers and processors compete with and we are simply not in the game.

                                                AUST    N.Z.     USA    EUROPE           THAILAND         

HOURLY RATE                     $26.82   $12.15 $14.57 $16.11                       $1.25  

PENALTY RATE W/E            $26.82   $0.85      0        $8.06                          0

TOTAL ON COSTS               19%       4.3%    15.5%  14.6%                       4.0%

TOTAL HOURLY COST FOR AN AVERAGE AUST. – WORKER  –  $52.00/hour (according to one processor operating in Australia and other countries)                    

It is easy to see our wages are double that of our nearest competitor, I certainly don’t advocate we try and chase wages to the bottom of the barrel, but we have to remember that wages are not the only cost impediment on our sector.

Supermarkets make sure that Australian producers have well recognised QA programs and ensure everything is tested to make sure that chemicals had been used correctly, the right sort of fertilisers are used and everything is documented, the list goes on and the farmer in most cases will bear this cost.

When we look at the practice of some of the countries that we import products from one must wonder whether or not the supermarkets that  apply such rigid standards for Australian local producers apply the same sort rigid testing and QA standards that they enforce local producers.

I also note on the Australian food and grocery council web site there is a vision that states “To sustainably and ethically source products and materials, to minimise ecological impact and support communities”   I don’t understand how that rings true when Australian supermarkets and retailers are importing food by the container load that does not mirror Australian standards, and what communities are they talking about, are they local communities?

When producers complain they are losing money the supermarkets are quick to point out that they will buy from the cheapest source and if it’s outside Australia they will buy from overseas, which they do

We as consumers like to receive high wages and have a high living standardwhilst our producers are expected to produce at below cost and our processors are in some cases forcing farmers off  their land as they are price takers .

Unfortunately what this culture leads to is consumers end up buying clothing shoes and food that is made in places that don’t have the same standards, benefits and cost structure that Australian hasor we as Australians are used to.

To me this sort of two stage buying will surely catch up with society in the future. The fact is we cannot let our manufacturing go offshore to create wealth from other countries which have much lower wage structures then we have become used to.

Now we see manufacturing sector jobs going overseas on a monthly basis and what hasn’t gone is looking closely at overseas options.

What’s the answer I simply haven’t got one however if we don’t protect what processing we have left in Australia then we will find we will have no manufacturing left in this country.

Surely we should be looking closely at what the answer is and try to find to find a solution in food processing and manufacturing and even worse forcing producers off the land.

Reminder: anyone wishing to send their submission by fax to the senate hearing into the cattle levy inquiry the number is  02 6277 5811

David Byard

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