Fuel prices have been a dominant feature of conversations I’ve been having with our member organisations, producers and consumers alike over this past week. With diesel hitting close to $2.40 a litre over the weekend, there is grave concern in the agriculture sector as we assess the flow on effects on farm, at farm gate and for the consumer.
Quite simply we cannot continue to absorb spiraling input costs and this increase in fuel will have an impact at every level.
If you accept the oft quoted phrase ‘Australia runs on trucks’, it’s easy to see how these fuel spikes are going to play out. Every delivery of fertiliser, seed, stock etc will increase. On farm, the costs of operating machinery increases. And, getting produce to the consumer increases too.
Our colleagues from the Queensland Trucking Association have already come out this week saying that they ‘will keep delivering the goods, but the costs will be passed onto consumers’.
So where does this leave the agriculture sector?
Rising input costs are simply not sustainable. Agriculture cannot continue to absorb these costs at the rate we have been, and the recent fuel price increase (with no apparent end in sight) will be the straw that will break the back of many primary producers.
By way of example, there is data that shows producers are dealing with record prices for farm inputs, yet there remains virtually no movement on price at the farm gate and retail level.
One analysis by AUSVEG reveals key agricultural inputs, both fertiliser and fuel, have on average increased in price over the past two years by 110 percent – and this was well before the most recent spike in fuel. Yet, over the same period a basket of the most common vegetables, carrots, potato, lettuce and broccoli, has only cost consumers 7.5 percent more.
This is not a unique scenario. We are hearing similar stories from all our members.
QFF is working closely with government on these issues while also acknowledging that many broader levers need to be pulled to ensure sustainability.
One lever is to start a conversation with consumers. Higher prices for produce are essential for sustainability and QFF joins with our colleagues in calling on retailers and buyers to ensure that farm gate prices that growers receive for their produce better reflect the current economic climate to ensure the financial viability of growers.