There’s much more to the $1.40 Vs. $1.00 that consumers are paying for Australian grown tomatoes, according to those in the industry. Recently the hashtag #ABCfoodfuture encouraged Australians to discuss why they refuse to buy Australian Grown, with one tweet in particular asking which 400 gram can of tomatoes people would pick; the Australian Grown for a higher price, or tomatoes imported from Italy or China. Farming methods may vary from the smaller plots in Italy to the broad open paddocks in Australia, but tomato processing methods are similar, whether one is in California or Turkey, Italy or Australia according to those in the industry.
Italy will produce some 5 million metric-tonnes in 2015 compared to 300,000 metric-tonnes of processing tomatoes in Australia. Italy averages some 75 metric-tonnes of fruit per hectare, while Australia achieves 100 metric-tonnes - which is comparable to the world's largest producer California (12.8 million metric-tonnes this year). "If Italian tomato producers choose to dump their products in Australia with impunity, there is little that local companies can do to compete long-term," KAGOME Australia CEO John Brady says.
KAGOME Australia produces around 45% of the processing tomatoes consumed in Australia, from their Echuca based plant. Findings by the Anti-Dumping Commission support Mr. Brady's assessment but he is pushing for a debate which discusses more than the price on the pack. "How safe is the imported food which Australian shoppers find on retail shelves?" he asks.
Farming methods, hygiene standards and food processing practices considered common overseas would be unacceptable in Australia, Mr Brady argues. “Many would not comply with FSANZ (Food Standards Australia & New Zealand) requirements. In some countries from where food is imported, crops are grown in soils that have been sprayed with pesticides, which are illegal in Australia.” Mr. Brady believes that the debate should focus on food safety and security.
KAGOME is a vertically integrated horticulture company harvesting tomatoes and carrots over some 3,000 hectares in northern Victoria and southern New South Wales. With Fresh Care and FSSC 22000 Certifications it's farming methods are deemed sustainable and processing plants meet world standards. "So many Australians have travelled aboard over the last 5 years, that most would know instinctively how wholesome home grown foods are," Mr. Brady believes. "The market is growing for food products that claim product provenance, and for brands which support local sourcing. Not only can the consumer feel better about the choice they make, they can taste the difference too".
Agribusiness needs to address competitiveness
There are three issues which face most if not all agribusinesses in Australia; Water, Energy and Logistics. Together with eight other agribusinesses, KAGOME Australia has made submissions to the Federal Government's Agriculture Competitiveness White Paper. Mr. Brady says "Water is the key issue facing all farmers at present, with the price for Temporary Water recently spiking at $200 per mega-litre, compared to last year's average of $75". Food producers may have to pass-on such significant in-put price hikes in the form of water levy increments, if such water premiums continue. "We are not looking for a hand-out, fixed prices or special treatment," he says. "We simply need reform of some of the regulations governing water availability, so that there is a level playing-field for everyone."
Energy is also a source of tension amongst agribusinesses, especially those processing fruit and vegetables. The price increases over the last 5 years (even without the Carbon Tax) make Australia an expensive place to add-value. Natural Gas now exceeds A$6.00 per giga-joule compared to California at A$5.25. Yet it’s these food processors located in regional Australia (close to the farms) providing sustainable employment and future careers in those regions, Mr Brady says.
Closely tied to energy is logistics and the transport of crops and finished goods. “Why can’t we get more freight on the rail?” asks Mr Brady. “If food production in Victoria is supposed to double in the next five years, does that mean we'll have twice the number of trucks on the road? I hope not!"
For more information
John Brady, CEO
KAGOME
Phone: +613 5482 0700
E-mail:johnb@kagome.com.au
Website: www.kagome.com.au