Coles to source all frozen veg products from Australia

Supermarket giant Coles has announced that from this month all its private label frozen vegetable products will be grown and packed in Australia.

The vegetable products will be sourced from Aussie farmers and packed by Australian based food processor, Simplot.

Last month Callum Elder, executive general manager of Simplot, discussed the difficulties for food companies trying to stay afloat in Australia.

''Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you're unable to properly plan,'' he told the Sydney Morning Herald.

''Our productivity hasn't increased in the past three to four years, as an industry, but yet we've been paying 3 to 4 per cent increases [in wages], which is a large part of the cost.

“It's very expensive to put people into Australian factories.''

Coles merchandise director John Durkan said the latest decision by Coles will make it the only Australia’s supermarket private label to offer 100 per cent Australian-grown frozen vegetables.

Coles’ total sales of frozen vegetables is almost $200 million each year, and the  private label range accounts for about 20 per cent of  that; more than $40 million annually.

“At a time when most other frozen vegetable brands are being sourced from overseas, we’re very pleased that, through our partnership with Simplot, we’ve been able to continue supporting Australian vegetable growers,” Durkan said.

More than 90 per cent of Coles’ private label frozen vegetable products is sourced from Tasmanian vegetable growers.

This represents over $37 million in sales for the supermarket, which growers will no doubt be hoping will be filtered down to their operations.

Simplot Australia’s Executive General Manager of Retail, Graham Dugdale has welcomed the supermarket’s decision.

“While other frozen vegetable suppliers have moved their sourcing and manufacturing off shore, Simplot Australia has continued to invest in relationships with the Australian farming community and factory capability, and is now the last remaining frozen vegetable manufacturer in Australia.

“Our strategic relationship with Coles gives consumers the choice to purchase Australian grown frozen vegetables from both ‘Birds Eye’ and Coles brand.”


Federal Budget 2012: Did the government forget the food sector?

The Gillard government has left the food processing industry reeling with its Federal Budget, channelling little money to the sector and ignoring calls for a Supermarket Ombudsman.

Farming groups have slammed Prime Minister Julia Gillard’s declaration that Australia can be a ‘foodbowl’ for Asia, saying current policies are killing their businesses, not helping them.

Despite the fact that hundreds of workers in the food processing sector have lost their jobs in the last two years as SPC Ardmona, McCain, Heinz and National Foods, amongst others, close their doors or scale back their businesses, Gillard announced earlier this week that the future for Australian food should be in export.

The high Australian dollar, supermarket price wars and lack of new recruits in the sector are making it impossible for food manufacturers to make a profit, or in many cases even break even.

Dairy, produce industries in trouble

The infamous milk price wars is leading dairy farmers to leave the industry in droves, and with the average age of an Aussie farmer about 65 and no new workers coming through the ranks, the future of the farming sector looks dire.

With the dairy industry still reeling, Coles slashed the price of produce in half in Fenruary and AusVeg spokesperson Simon Coburn told Food Magazine it “had the making” of the milk price wars.

“Long term this could deliver lots of damage to the industry,” he told Food Magazine.

“Depending where the reduced retail price is going to be absorbed, whether it’s a small grower or a big business, this will damage them long term.

“Eventually it will come back to growers and that’s where they’ll get into trouble.

“These prices aren’t sustainable if they’re passed onto growers, small operations and even big ones won’t survive this.

When asked whether the price cuts shows a lack of knowledge or respect for growers from Coles, Coburn said that will be determined by Coles’ behavior going forward.

“It depends on how these costs will be set up,” he said.

“If they absorb the costs within their own structures, it could be good, but if it is going to be passed onto growers, which it probably will, it shows mass disrespect to growers.

Murray-Darling Basin impacts

Australian Dairy Farmers Association Chris Griffin voiced similar concerns about the impact of the supermarket when he spoke to Food Magazine in the same month, saying the dairy industry is not only losing workers, but will be further damaged by the carbon tax and Murray-Darling Basin plan.

“The carbon tax will also cause problems when it’s implemented on the 1st of July; we’ve done work to find the costs that will be incurred and they are largely electrical costs,” he said.

“The average increase for dairy operation will be between $5000- $7000, and that will be an overall direct increase in cost that will have to be passed on somewhere.”

The cost increase cause by the carbon tax will have to be absorbed by the farmers in the milk export market, Griffin told Food Magazine.

“It will have to be absorbed by the farmer because our price is governed by a royal export set price.

“Australia has come out ahead of the game in a way with implementing the carbon tax, but farmers can’t go to their overseas customers and saying ‘we need extra money because Julia has put on a carbon tax,’ the customers would just go elsewhere.”

The Murray Darling Basin plan, which is tipped to see farmers sell 2750 gigalitres of water back to the Government, will mean less water available for the same number of farmers in the region, Griffin explained.

“Given that the government has a national food plan they’re trying to roll out and we believe the dairy industry is a massive part of that, we would like to consult with them about the plan,” he said.

“Australia has been very fortunate that we have been able to produce enough dairy products not only for domestic consumption, but also for export, which then generates wealth for the country.

“This plan is going to jeopardise that.”

“At this stage we say a certain amount of water has been taken out already and we need to have a strategic look, working with the government to see where it is going to come from in the future rather than using the ‘Swiss cheese approach’ currently being used.

“It means less water for the same amount of farmers, and maintenance costs will be higher because there are not as many people contributing to the maintenance.”

National Irrigators' Council chief executive Tom Chesson said if the Gillard government wants to feed the Asian middle class, it will need to ensure "water to produce food,” and  “unless government gets its act together, we won't have a food processing industry left.”

Declining produce output

AusVeg chief executive Richard Mulcahy voiced similar concerns about the government’s view of exporting to Asia, saying there simply isn’t enough.

"Only 7.7 per cent of our ]vegetable] production goes offshore,” he said.

“We need to address that before coming up with ambitious plans about feeding hundreds of millions of people in Asia.”

In the last two years fruit and vegetable exports have declined $200 million to $497 million.

The Federal Budget, announced this morning, revealed funding for the Murray-Darling Basin will be reduced, and the Commonwealth Environmental Water Office, which manages the government’s water rights, will be slashed by $13.2 million over the next seven years.

The Caring for our Country program, which aims to improve biodiversity and sustainable farming, which many feared would be cut in Wayne Swan’s budget, was retained.

A further $2.2 billion will be invested into the program’s second phase, to run until 2018.

Part of the money will concentrate on ensuring the health and sustainability of the Great Barrier Reef, which will get an extra $12.5 million over four years to fund research on the impact of climate change and how to deal with global warming.

Over six years, $58 million will be delivered to develop and maintain marine reserves to protect oceans surrounding Auustralia.

But submissions to the senate inquiry into food processing are painting a bleak picture for the rest of the industry, saying the sector is "going backwards at a rate of knots".

The Australian Food and Grocery Council has also been lefty disappointed by the Budget, after calls for funding for a Supermarket Ombudsman were not delivered on by the government.

The AFGC wants an Ombudsman to oversee the anti-competitive and bullying behaviour of the major supermarkets to ensure a future for Australia’s food sector.

PM doesn’t understand true realities of farming industry: opinion

The government needs to support its farmers if it wants to be the food superpower Prime Minister Julia Gillard wants it to be.

 As a farmer, marketer and writer, Sophie Love understands the realities of life on the land and how the politicians’ mission to get the “good soundbite” does not translate to a better life of business for Australian farmers.

She writes for ABC’s The Drum:

Julia Gillard is absolutely right that Australia is on the brink of becoming the global economic superpower as the economies of Europe and the US falter, dip, double-dip and recede in the wake of the rampant consumerism of the eighties, nineties and noughties.

The shift has already happened, it is just the global consciousness that needs to catch up. Gillard is also correct in her prediction that Australia has the potential to be the food bowl of Australasia.

The potential is there, but the reality is that federal and state governments are going to have to markedly shift their attitudes, funding allocations and support for farmers if Australia is ever going to be anything other than a dust bowl importing all its food from Asia. That's the way we're headed.

Farmers are leaving the land in droves, frustrated with government treatment of rural communities and the right of farmers to earn a living wage for the crucial food production and custodianship of the land they battle the elements for every day.

The age of the average Australian farmer is ever increasing (currently around 65 years of age) and the industry is not attracting newcomers (except Asian and other overseas purchasers).

The children are leaving the land in preference for fringe dwelling – who can blame them when the rural schools are being closed, the Coles/Woolworths price wars and market domination demand ever-lower farmgate prices for produce, the satellite signal for broadband is slower than the city peak hour crawl and we can't get a TV or radio signal, let alone a doctor, a post office, a store.

Full article available on The Drum.

Sophie Love also blogs about her daily life on the farm here.

Victorian Shire wants CSG banned on agricultural land

A Victorian food region west of Melbourne has joined the list of shires and towns arguing against coal seam gas (CSG) exploration and development.

Colac Otway Shire says it wants to protect its position as a flourishing food bowl, and has joined forces with other local and state governments pushing for a moratorium on CSG.

At last week’s council meeting, the Western District Shire Council voted unanimously on a move to encourage the state government to conduct more research on the impacts of CSG on the environment and economy before allowing mining companies into their region.

The Bass Coast Shire moved a similar motion last month and has also held public meetings to address growing concern over the impacts of CSG and coal exploration on agricultural land, the environment and lifestyle.

In December one of Australia’s major CSG explorers defended the practice, saying it can coexist with food security and agriculture.

Chief executive of Santos, David Knox, told ABC Radio he supports further scientific research but drilling should continue while it is conducted.

A senate report concluded the CSG industry is moving too quickly and is not allowing for research to be conducted on the impact CSG projects have on groundwater and food security.

Knox has denied the moratorium on CSG exploration wanted by the government is necessary, saying the only way more information can be found is to conduct the drilling.

But the community concern over the impacts of CSG exploration and drilling continues to increase, and last year a moratorium on all new coal and CSG projects was implemented.

Colac Otway Shire Councillor Stuart Hart pointed to the experiences of Queensland and New South Wales landholders who are fighting with the mining companies as a reason they want the practise halted until further research is conducted.

“This industry (CSG) is a significant threat to the Shire,” he told Stock & Land.

“I consider this to be a pristine food bowl…we do not want mining companies pouring carcinogenic chemicals into our waterways.”

He explained that agriculture and tourism were the two main industries in the region, which stretches from Birregurra and Colac to the Great Ocean Road, and includes Apollo Bay.

Friends of the Earth has welcomed the Shire’s move and says more regional communities should be doing the same.

“While the state government continues to peddle the line that current laws are sufficient to protect landowners when it comes to coal and CSG, clearly regional communities are not buying it” Friends of the Earth campaigns co-ordinator Cam Walker said.

“This intervention by Colac Otway has special significance given that the state government Inquiry into Greenfields Mineral Exploration and Project Development in Victoria is due to report next week.

“The minerals industry has been lobbying for a ‘streamlined’ approvals process for minerals such as coal and CSG.

“The Minerals Council believes there is ‘enormous potential for a coal seam methane industry in Victoria.’

“Clearly rural communities do not share their vision of an expanded fossil fuel industry being rolled out across southern Victoria”.

Sales of fair trade certified products still rising

Sales of products carrying the Fair Trade Certified logo have increased by almost 40 per cent, as consumers become more informed about work conditions for foreign workers.

Saturday marked the beginning of Fair Trade Fortnight, which aims to bring more awareness to the free trade cause.

Fairtrade Australia New Zealand (Fairtrade ANZ) said the increase in Fair Trade certified products in 2011 represents just over $165 million for the cause, which helps to ensure decent working conditions for employees.

In 2010, over AU$63.8 million in additional Fairtrade Premium payments were made globally to farmers for investment in growing their businesses, improving the quality of product and providing their communities with essential services such as healthcare and education.

Fairtrade ANZ chief executive Stephen Knapp said the growth shows Australian shoppers and businesses continue to believe every choice matters when it comes to giving farmers in developing countries a fair go.


“Whether it’s your morning coffee or the products your workplace uses for the office canteen, every choice matters,” Knapp said.


“Unlike any other third party certification system, Fairtrade works in partnership with small-scale farmers in developing countries to provide fairer prices, better terms of trade and additional funds for business and community development.

“Making a choice that matters and choosing Fairtrade is now easier than ever for Aussies shoppers with the number of Australian businesses licensed to sell products carrying the FAIRTRADE Mark rising by over 13% per cent to 220 and a range of Fairtrade Certified products now readily available on major supermarket shelves across the country,” he said.

Last year a number of large food brands started offering Fairtrade choices to Australian consumers including Starbucks and San Churro, which both now serve 100 per cent Fairtrade Certified espresso in their stores throughout the country.

Fairtrade Certified coffee on the supermarket shelves also continued to grow with brands including Republica, Oxfam, Global Café Direct and Grinders and Marco offering Fairtrade Certified and organic coffees.

“The choice of these businesses to support and offer Fairtrade Certified products is reflective of the continued demand by consumers who more than ever know that every choice matters, even in harder economic times,” Knapp said.

“Even in tough times Aussie shoppers understand the sense and importance of a fair go for all.

“They are continuing to make the choice to buy Fairtrade Certified products because they know they are making a choice that matters – one which makes a real difference to the lives of millions of farmers and their communities in some of the world’s poorest countries,” he said.


In October last year , a global poll has revealed  more Australians not only recognise the Fairtrade label, but are also actively looking for it when making purchases.

Of the 17 000 consumers Fairtrade surveyed from 24 different countries, over half said they believed buying certified free trade would help farmers in developing countries.

Over six in ten surveyed said they trust the Fairtrade Label and use it to make decisions.

Do you look for Fairtrade Certified products when shopping or eating out?

Gillard realises Australian food potential; but can Asia solve all our problems?

Prime Minister Julia Gillard has finally officially recognised what most people in the food industry have known for decades: Australia can and should be a food superpower.

Last night she told an international summit in Melbourne that Australia needs to look at the food production in the same way it does minerals, and start capitalising on the export demand, particularly from Asia.

"Just as we have become a minerals and energy giant, Australia can be a great provider of reliable, high-quality food to meet Asia's growing needs," she said.

"In doing this, we are not just an exporter of commodities but a partner in growing international markets and a provider of higher value products and services for the global food industry."

Will the Asian food demand solve all the problems?

Many experts within the Australian food industry, however, have voiced concerns over the reliance on the rising demand for food across Asia, and warn against having that as the only solution.

“People look at the rising middle class in China and see that as our export market and think it’s going to save the day, but what they don’t realise is they already have factories there, they will invest in those factories before they import from Australia because of the barriers,” National secretary for the Food and Confectionary division of the National Manufacturing Workers’ Union, Jennifer Dowell told Food Magazine in February.

“It sounds good in theory, but if we look at what’s actually already there, it is just simply not going to happen.”

The same month, entrepreneur Dick Smith voiced similar concerns when he spoke to workers at a glass factory in Sydney’s west.

"Just as we have become a minerals and energy giant, Australia can be a great provider of reliable, high-quality food to meet Asia's growing needs," she said.

"In doing this, we are not just an exporter of commodities but a partner in growing international markets and a provider of higher value products and services for the global food industry."

Some experts within the industry, however, have previously said that the general assumption that Asia can solve all our food financial problems may be relying too heavily on the idea.

“What we should be doing is selling food to the whole world, but we’re not,” Dick Smith said in February.

“We are now a net importer of fruit and vegetables; absolutely outrageous.”

He said depending on other countries to provide food for Australia is counter-productive and that Australia needs to ensure it keeps a vast percentage of locally produced food for our own consumption.

“It will get to a stage where if you want the best Chinese food, you’ll come to Australia, and if you want decent Australian food you’ll have to go to China,” he said.

Chinese companies buying Australian land to grow food

Earlier this week it was revealed that a state-owned Chinese company is vying for the entire 15 000 hectares of agricultural land known as the Ord Expansion Project ,in the Kimberly in Western Australia, to produce food to send back to the its rising middle class.

During the address, Gillard said Australian food producers can stand out from the crowd by ensuring the high standard of products being exported.

"It's not just about more exports,” she said.

“It is about developing the systems and services that add extra value to them and participating in the development of a market-based solution to food security across the region," she said.

"Building our food processing industry so that it can supply Asia's growing consumer markets and developing the research, technologies and logistics that strengthen irrigation, grow higher-yield crops and improve safety.

"Australian businesses must find opportunities in conditions where the dollar and terms of trade will remain high for the foreseeable future.

"They will not do that by simply doing more of the same or by slashing costs and quality.

“They will need to offer products and services with distinctive value, based on real areas of comparative advantage.

"Indeed, the 21st century business model is likely to be very different from the successful business models of the last quarter of the 20th century." 

The road ahead

Gillard believes Australia is in a good position to enter the next century, which is sure to be challenging.

"If you think the change we have lived through already in our region and in our nation is amazing, then hang on to your hats because so much more change is still to come," Gillard said.

"Today, for example, 30 per cent of global output is created within 10,000 kilometres of Australia's shores.

“That may double by 2050."

"By 2030, China and India alone are forecast to account for 35 per cent of global energy demand."

In September last year, the Gillard government commissioned a White Paper on Australia's economic and strategic engagement with Asia in years to come.

The paper, written by former treasury secretary Ken Henry identified some important factors in our future with Asian exports, in particular that Australia needs to become “Asia literate,” the Prime Minister said.

"White Paper consultation has demonstrated that cultural literacy and understanding, or what Ken Henry describes as 'Asia-relevant capabilities' are vital to Australia's prospects in this century," she said.

"We need to encourage even more Australians to study and work in the region and maintain their connections over their lifetimes."


Obese women face discrimination in the workplace: study

Women who are obese are more likely to be discriminated against by employers, a new study has found.

The Monash University study, published in the Journal of Obesity, used the same people, with the same resume and experience pre and post bariatric surgery to examine whether being overweight jeopardised employment opportunities.

The lead researcher of the study, Dr Kerry O’Brien said the purpose of the study was not disclosed to the subjects throughout the research, as doing so could impact the results.

The team also looked at how body image and personality factors including authoritarianism and social dominance orientation was related to the discrimination surrounding obesity.

The rates of obesity in Australia are increasing, and many experts are calling for a "fat tax," a "sugar tax," bans on advertising junk foods to children and front-of-pack-labelling.

O’Brien and his colleague Janet Latner, from the University of Hawaii, said one of the interesting aspects of the findings was that the participants’ own body image was closely associated with obesity discrimination.

Therefore, the question must be asked whether employers are discriminating due to actual weight, or making judgements on personalities which are the result of the person’s opinion about their own appearance.

“The higher participants’ rated their own physical attractiveness and importance of physical appearance, the greater the anti-fat prejudice and discrimination,” O’Brien said.

“One interpretation of this finding might be that we feel better about our own bodies if we compare ourselves to, and discriminate against, fatter people, but we need to test this experimentally.”

This study is the first to show a relationship between self-reported measures of obesity prejudice and actual obesity discrimination.

The results suggest that a belief in the superiority of some individuals over others is related to the perception that obese individuals deserve fewer privileges and opportunities than non-fat individuals.

“Our findings show that there is a clear need to address obesity discrimination, particularly against females, who tend to bear the brunt of anti-fat prejudice. Prejudice reduction interventions and policies need to be developed,” O’Brien said

“It’s also becoming clear that the reasons for this prejudice appear to be related to our personalities and how we feel about ourselves, with attributions, such as ‘obese people are lazy, gluttonous, etc’ merely acting as self-justifications for the prejudice.”

The subject’s resumes, with a small photo of the applicant attached, were viewed by employers who rated their suitability, starting salary and employability.

“We used pictures of women pre-and post-bariatric surgery, and varied whether participants saw a resume that had a picture of an obese female attached, or the same female but in a normal weight range having undergone bariatric surgery,” Obrien said.

“We found that obesity discrimination was displayed across all selection criteria, such as starting salary, leadership potential, and likelihood of selection for the job.”

The researchers categorised the subjects prior to the resume submissions using the Universal Measure of Bias (UMB) score, which predicted actual obesity job discrimination.

They found that the higher a subject’s the UMB, the more likely they were to discriminate against obese candidates.

“Our findings show that there is a clear need to address obesity discrimination, particularly against females, who tend to bear the brunt of anti-fat prejudice,” O’Brien said.

Men did not appear to be discriminated against in the same way. 

The paper does not go into detail about the nature of jobs being applied for, so it is unclear if the candidates were applying for those which require a certain level of stamina and fitness.

What do you think of this study? Are you an obese person who has been discriminated against in your employment? 

Soaring raw coffee prices predicted to drop in 2012

Raw coffee prices reached record highs in 2011, but increased production in Brazil will hopefully alleviate some of the pressure for buyers.

In coffee supplier Gilkatho’s annual survey, it found that last year had the most costly raw coffee prices, which then flows onto suppliers and retailers.

The Gilkatho Cappuccino Price Index (CPI), which has been conducted for the past decade by Gilkatho, which surveys over 900 cafes in Australian capital cities to understand the change in coffee prices over time.

Australian consumer coffee prices have risen over the past six months, the research found.

In Sydney the average price of a takeaway coffee has risen from $3.11 to $3.19 while Melbourne coffee drinkers have seen a similar change, with prices increasing 14 cents to $3.35 in the period.

However, there could be some evidence that the coffee beans themselves are not causing the price increase, but rather the cost of the takeaway cups they’re sold in.

The price of dine-in coffees has not changed in Sydney, Melbourne or Brisbane.

Gilkatho’s Managing Director, Wayne Fowler, said retailers are increasing the costs of items such as coffee to meet other rising costs in running the business.

 “The March CPI portrays a continuing trend of steady price increase reflecting the healthiness of the Australian coffee market as consumers appear willing to pay the increased costs.”

Following the record prices of raw coffee last year, Fowler is predicting a drop in prices in 2012 due to record production in Brazil.

He pointed towards countries including Kenya, which is producing high quality beans that it sells for lower prices into the international market.

Coles fined $170 000 over worker fall

Coles has been fined $170,000 and ordered to pay WorkCover’s legal costs after a worker sustained injuries when she fell through a ceiling at a Manly store in 2007.

The worker climbed over a handrail to access promotional material being stored on a suspended plasterboard ceiling on 29 August 2007, according to WorkCover.

The plasterboard collapsed and she fell more than two metres to the floor below and had to be transferred to hospital to be treated for lacerations to her head, whiplash and bruising.

An investigation by WorkCover found the company knew that using the roof cavity for storage was dangerous, and it had built a railing and posted a warning sign, but management failed to undertake a risk assessment on the ability of the plasterboard to withstand any weight.

They also failed to adequately warn staff not to access the area or use it for storage.

Coles Supermarkets Australia Pty Ltd pleaded guilty, and was convicted and fined $170,000 and required to pay WorkCover’s legal costs.

WorkCover’s General Manager of Work Health and Safety Division, John Watson, said a number of simple steps could have prevented the incident and as a national retailer, the company should have sufficient safety awareness and procedures.

“This business employs more 23,000 people in 238 stores across NSW, so the safety procedures of this company are relevant to a lot of people,” Watson said.

“This particular area should never have been allowed to be used to store merchandise and Coles management should have been more vigilant.

“While store management knew the area was not safe, the area was still used for storage and there was no proper information or training given to staff to warn of the risk.

“It is critically important that these types of hazards are identified at the workplace design stage and all reasonable and practicable steps be taken to eliminate the risk of work related injury or illness.

“Following this incident Coles has initiated a number of steps to eliminate re-occurrence, including a new plywood barrier to block off all access to the dangerous area and issuing a safety alert to staff,” Watson said.

“WorkCover is also pleased that this issue has also been addressed in the design of all new Coles stores.”

Aussie beef producers prepare for high demand following US mad cow disease outbreak

Indonesia has suspended some beef imports from the US following the detection of mad cow disease in California, and Australian producers are hoping to benefit from the incident with increased exports.

The Indonesian government confirmed it would be suspending US beef imports and two major South Korean retailers, Homeplus and Lotte Mart – immediately halted sales of the products as the news of the bovine spongiform encephalopathy (BSE) case broke.

Indonesia has suspended imports of boned meat and innards from US beef but boneless meat remains unaffected.

"We have decided to stop importing bone meal, innards and boned meat from the United States, but imports of boneless meat will continue," Indonesia’s deputy agriculture minister Rusman Heriawan said.

"The suspension starts today, but we don’t know how long it will remain in effect," he said, adding that shipments en route will not be affected.

Only a small amount of Indonesia’s beef imports come from the US, and most come from Australia and New Zealand.

Indonesia has suspended some beef imports from the US following the detection of mad cow disease in California, and Australian producers are hoping to benefit from the incident with increased exports.

However, the outbreak in 2006 was much larger than the latest one, which has only been detected in a single cow.

The US has proclaimed that the detection of the disease during routine inspections highlights an effective testing process, and no other animals have been found to have the disease.

But in the case of mad cow disease, many countries will exercise caution and halt imports until the storm passes.

Canada and Japan have said they will continue to import US beef and head of the Northern Territory Cattlemen’s Association Luke Bowen told The ABC that while Australian producers are sympathetic to the American predicament, they also hope the outbreak will benefit them again as it did previously.

US beef exports dropped by almost $3 million following the first outbreak of mad cow disease in 2003.

"Certainly when the cases in early 2000 broke out in Canada and the US and in Europe there was a large void in those Japanese and Korean markets, which Australia was able to fill, and the Americans have only just started to claw back some of those gains that Australia made through that period," Bowen said.

"And we’ve also seen a free-trade agreement signed between America and Korea which has strengthened their trading position as well, so clearly the Americans would have a lot to lose if they were to lose access to those markets."

BSE is highly contagious between animals, and is thought to have caused over 200 human deaths worldwide.

Image: Department of Primary Industries

WA farmers meet with Wesfarmers to discuss milk price

Western Australian farmers have met with Wesfarmers boss Richard Goyder to discuss the impact of the milk price wars on production and try to find a solution.

The farmers want fairer pricing strategies from the group, which includes Coles, and last week the WA Farmers Federation passed a motion to boycott Wesfarmers and its subsidiaries.

The WA Farmers Dairy Council say the “predatory pricing” by the major supermarkets have devalued the industry.

"Unsustainable" pricing

Australian farmers have been fighting the major supermarkets over the price wars since Coles slashed the price of its private label milk to $1 a litre in January last year.

Woolworths quickly followed suit, and despite a Senate Inquiry and an investigation by the Australian Competition and Consumer Commission, the supermarkets were allowed to keep trading at the reduced price, which the industry has slammed as “unsustainable.”

But president of the Australian Dairy Farmers Association, Chris Griffin, told Food Magazine earlier this year that the financial pressures placed on farmers through the price wars has led to many leaving the industry.

“We know there’s been at least 30 leave the industry in Queensland alone, and the majority are sighting the uncertainty of milk prices as the reason,” he said.

Unsurprisingly, dairy farming was rated the second worst job in the world last week, based on physical demands, work environment, income, stress and hiring outlook. 

Many WA farmers wanted to support the proposed boycott immediately, but the motion was passed on to the executives of the association for assessment.

Managing director of Wesfarmers, Goyder, met with WA Farmers president Dale Park and senior vice president Tony York this week to discuss some of the issues, including the impact of the pricing on the industry, which it says has lost it $25 million.

Who absorbs the price cut?

Coles has continually denied that its low-priced milk is impacting the dairy industry, claiming it is absorbing the costs, but those in the industry know that while that may be the case for now, in the long run producers will be taking the financial hit more than they already are.

“What it comes down to, according to the supermarkets, is that it comes down the them looking after us as consumers by cutting prices, but it comes at the expense of quality and also, they’re not asking consumers if they’re OK with this, they’re just deciding for us,” Australian Manufacturing Workers’ Union (AMWU) food and confectionary secretary, Jennifer Dowell, told Food Magazine earlier this year.

“Invariably they say it is not absorbed by the grower or the manufacturer when they cut the prices but in the end it always does.”

Following the intense debate about the cost cutting by Coles and Woolworths and the ruling that $1 per litre was acceptable Food Magazine asked Griffin if the chances of the big two supermarkets increasing the price of milk to help with the increase in farmers’ costs, including the carbon tax, would most likely be slim.

“That’s a question for Coles,” he said.

“We believe the tactic all along by Coles was just to get people through its doors, and since dairy products are in 97 per cent of consumers homes, it’s a draw card they’ve used.

“It’s always at the back end of the supermarket, so you have to walk through all the other products and displays to get to it, so it is simply a marketing ploy they’ve implemented at the expense of the dairy industry.”

When contacted by Food Magazine to find out if they would consider absorbing the cost increase, Jim Cooper from Coles said "we are not speculating about the potential impact the carbon tax will have on retail pricing."

Fear campaign

While the meetings between farmers and the major supermarkets are a step in the right direction, hopefully it will pave the way for other suppliers to follow suit and start talking about the impact of the price wars, because up until now the Senate Inquiry into the power of Coles and Woolworths has been met with fear from producers to afraid to criticise the supermarkets.

“WA Farmers wants to work with all food retailers to develop a supply model which ensures locally available product is their preferred source, pricing structures are sustainable and to develop a program which highlights to consumers the source of their product,” Park said.

More meetings are planned between the executives in coming weeks.

Image: News Limited

How Australia can become Asia’s food bowl

AUSTRALIA IN THE ASIAN CENTURY – A series examining Australia’s role in the rapidly transforming Asian region. Delivered in partnership with the Australian government.

Here, Dr Peter Batt looks at Australia’s potential to feed Asia’s rapidly growing population.

Asia has the fastest-growing population in world. This will increase the demand for food, but greater urbanisation, westernisation and rising personal wealth is changing the form in which food is consumed.

There is a rising demand for more animal protein in the diet, more dairy products and a greater variety of fresh fruit and vegetables. There is also more demand for value-added food: food that is convenient, safe and which has been produced more sustainably.

While it is the objective of most sovereign nations to be self-sufficient in food, in much of Asia it will be exceedingly difficult to produce enough food. There are major resource constraints in the form of arable land and water. Farmers are often unable to access appropriate technology, and the lack of infrastructure imposes major constraints on the efficient distribution of food.

Opportunities and challenges

To the south, Australia is well positioned to take advantage of the emerging opportunities. However, Australia must also find a way to address the many impediments that threaten to restrict market opportunities in the future.

Agriculture is the most volatile sector of the Australian economy. Seasonal variations, primarily in rainfall, have a direct impact on productivity. While productivity per area continues to grow, the rate of growth has slowed considerably. This is because the public is contributing less to research and development expenditure, and because many farmers can’t make the necessary investments in technology, equipment and machinery, due to their diminishing equity position and lack of confidence.

The economies of scale, which once favoured greater farm aggregation, are becoming more elusive. As input costs continue to rise and prices trend downward, the terms of trade are eroding.

While more accurate long-term weather forecasts may provide farmers with the information to make better decisions, the full impact of climate change is expected to place a considerable burden on the public purse. Huge investments in infrastructure will be necessary in much of the country to provide a regular and reliable source of water.

If the potential for agriculture in north Australia is to be realised, transport and logistics systems will need to be enhanced to ship the products to population centres.

Selling GM

Conventional plant breeding systems are likely to give way to the increasing use of genetic modification. Many consumers have concerns about the introduction of genetically modified plants.

But if the technology can be shown to reduce the use of agricultural chemicals and fertilisers, water and fossil fuels, and to deliver positive benefits to health and nutrition through enrichment, consumer resistance should diminish. This is even more likely if the use of GM reduces the costs of production and if that cost reduction flows through to consumers.

The high value of the Australian dollar is putting pressure on producers both domestically and abroad. Domestically, competition between the two major supermarket chains is driving food prices lower, often to the point where farmers’ profit margins are so small they can’t invest in new technology and new product development.

And more liberal terms of trade enable many food ingredients to be imported at prices well below the costs of production. This is forcing many food processing plants to close, with a commensurate negative impact on employment, farmers and rural communities.

The food bowl of Asia

As markets evolve, there is an increasing demand for higher quality products. Beyond the tangible characteristics of the product itself – such as size, shape, colour and appearance – consumers are now also expecting sustainably produced food. Australia leads the world in the implementation of quality assurance systems, but the uptake of sustainable farming practices has been slow, despite Australia having one of the most fragile ecologies.

To access world markets, Australian food producers have to show that their product has been produced using good agricultural practice. But competition between global retailers is continuously raising the bar, imposing additional costs on all food producers. These costs are seldom recovered, and this absence of sufficient financial incentives provides the major barrier to the more widespread adoption of sustainable farming practices.

However, there is a long-term public benefit in supporting the more sustainable use of resources and encouraging the more widespread adoption of integrated crop management.

If Australia is to become the food bowl of Asia, we need to start making changes now.

This is part thirteen of Australia in the Asian Century. You can read other instalments by clicking the links below:

Part One: Want to get ahead this century? Learn an Asian language

Part Two: Australia’s great, untapped resource … Chinese investment

Part Three: Beyond China: Australia and Asia’s northern democracies

Part Four: More than a farm on top of a mine: Australia’s soft power potential in Asia

Part Five: Australia can lead the fight against Asia’s lifestyle disease epidemic

Part Six: Why Australia needs an Asian Century Institute

Part Seven: Taming the tigers: tourism in Asia to become a two-way street

Part Eight: Australia will need a strong constitution for the Asian Century

Part Nine: A focus on skills will allow Australia to reap fruits of its labour

Part Ten: Engaging with Asia? We’ve been here before

Part Eleven: China, India and Australian gas – who controls energy in the Asian Century?

Part Twelve: Dealing with the threat of deadly viruses from Asia

Part Thirteen: Defence agreements with US harm Australia’s reputation in Asia

Part Fourteen: As Asia faces climate change upheaval, how will Australia respond?

This article was originally published at The Conversation. Read the original article.

Calls for public register of foreign investment in Australian farming land

The peak farming representative group is calling for more transparency on the investments made in Australia by foreign investors.

The National Farmers’ Federation (NFF) is calling for a compulsory national land register, to keep track of foreign interest in Australian agricultural land.

It would require any person or company not from Australia which acquire or transfer an interest in agricultural land to report the sale in a specified timeframe.

The NFF also wants the records to be made public.

“We are also calling for an annual report of the register findings to be published, summarising any changes to the holdings of agricultural land held by foreign interests,” president Jock Laurie said.

“This report will trigger an annual review of the policy settings around foreign investment, including the Foreign Investment Review Board (FIRB) reporting threshold for agricultural land purchases by commercial interests.”

Earlier this year there were suggestions that Australians needed more transparency about modern farming practices, which were only fuelled by a Primary Industries Education Foundation research project, which found school children think yoghurt grows on trees and cotton socks are an animal product.

Laurie acknowledged the benefits foreign investment had provided for Australia’s agricultural industry, but said NFF members are concerned about the number of foreign interests in Australian farming land, which is ensuring food security for other countries and leaving us behind.

“At the core, the NFF supports foreign investment in Australian agriculture – provided that it does not negatively distort our resource allocations or outputs, does not undermine our farm gate prices, and is not undertaken with the intent of damaging competition in the marketplace,” Laurie said.

“While there have been some calls for the FIRB threshold to be lowered, we believe to do so at this point would be premature.

“This debate has long been described as a debate without data – and, in order to suggest a suitable FIRB threshold, we must first know what land is owned by whom- based on real data, not just a survey sample,” he added.

Do you agree with the suggested register? Do we need to know more about foreign farming interests in Australia?

Tomato processor collapses

The Queensland second tomato processor this year to go into administration has left 40 employees out of work.

Bundaberg tomato farm, Basacar Produce went into voluntary administration this week, following in the footsteps of the nearby SP Exports, which collapsed in February, blaming the high Australian dollar and the supermarket price wars.

The SP Exports farm was the biggest in Australia before it collapsed, leaving hundreds of people unemployed.

Basacar Produce’s directors, Ayhan and Zubeyde Basacar owe creditors including the Tax Office, the National Australia Bank and the farm’s employees more than $3.5 million.

The first meeting of creditors will be held 1 May and Vincents Chartered Accountants has been called in as the administrators.

Basacar Produce is hoping to save the tomato farm and one of the appointed administrators, Peter Dinoris, told SmartCompany the directors may put forward a deed of company arrangement as an alternative to liquidation.

“It will be up to creditors to vote at the second meeting of creditors,” Dinoris said.

“The three options are a liquidation, deed of arrangement or return the company to the directors.”

Coles deals Woollies a blow as supermarket price wars heat up

In yet another controversial action in the supermarket price wars, Coles is launching a loyalty card, not just to their loyal shoppers, but to almost every mailbox in Australia.

The FlyBuys card mail out will be one of the biggest in Australia’s history, with eight million cards set for delivery.

Producing and mailing the cards, and the advertising that goes along with it has cost the supermarket giant a pretty penny; believed to be in the tens of millions of dollars.

But Coles boss Ian McLeod is adamant that the new, simplified card which carried over points from existing FlyBuys cards will make that money well spent.

The new card will double the rewards, with one point earned for every dollar spent, and the ability to cash in the card at the till.

"Instead of waiting three years to earn enough points to buy a toaster, from day one, customers can start earning," McLeod said.

Coles is also embracing web marketing and sales, giving buyers the ability to log onto a website and select deals and convert points.

It follows a spectacular social media fail by the supermarket giant earlier this year, when it asked Twitter users to finish the sentence “In my house it is not a crime to buy…" to which some people vented their spleen about Coles ripping off farmers, putting Australian food producers out of business and the poor food quality, amongst other things.

As part of its FlyBuys relaunch, Coles has also partnered with companies including Webjet, Telstra and AGL.

FlyBuys was launched more than two decades ago and today has amassed more than 5 million active card users.

Are you an active FlyBuys user? Do you agree with Coles mailing the cards to everyone and will it change your shopping habits?

New WA Meat Industry Authority chairman announced

David Lock has been appointed chairman of the Western Australian Meat Industry Authority (WAMIA).

Minister for Agriculture and Food, Terry Redman announced Lock will replace Kerry McAuliffe, who is stepping down after more than a decade in the position.

Redman praised McAuliffe’s time in the role, where he oversaw numerous changes to the livestock industry.

“Kerry has overseen the closure of the Midland Saleyards, construction, opening and operation of the Muchea Livestock Centre and the development and implementation of the State Saleyard Strategy,” he said.

“Kerry, the board and management of the authority should be very proud of their achievements.”

McAuliffe said it had been a privilege to have chaired the WAMIA board for 13 years, and acknowledged the significant changes to the meat and livestock industry in WA, which WAMIA had been a key driver of.

“Developing and implementing the Animal Welfare Standards for Western Australian Saleyards is an example of this leadership,” McAuliffe said.

Lock is currently chief executive officer of the Craig Mostyn Group (CMG), a 90-year-old Australian family-owned agribusiness and food company based in WA.

He says some of the challenges for WAMIA will be consolidating the future of the Muchea Livestock Centre, and ensuring WA has adequate meat processing facilities for producers, while delivering a product that satisfies community expectations for health, food safety and animal welfare.

Lock also believes WAMIA must plan for increasing demand for meat as a protein source from emerging economies including India, China and Indonesia.

“The authority has a role to play in setting the bar high for all operators in the WA livestock and meat processing sectors, so that we continue to deliver world class meat products to an increasingly discerning domestic and global market,” he said.

Asian farmers face slump in production

Agricultural production in Asia could be halved in the next three decades if farmers don’t adapt to climate change.

According to the Centre for Climate Change, Agriculture and Food Security, unless farmers change their processes to deal with the changes to the environment, the output will be significantly impacted, the ABC reports.

A network of 15 agricultural research centres from across the world are working on developing new crops that can survive rising temperatures, acid and salinity, director of Agriculture, Climate Change and Food Security said.

He told the ABC that $450 million worth of crops were ruined by drought in 2010 and last year $40 billion in crops were lost to flooding.

The flooding began at the end of July last year, triggered by the landfall of Tropical Storm Nock-ten.

Rising waters soon inundated Northern, Northeastern and Central Thailand provinces along the Mekong and Chao Phraya river basins.

In October floodwaters reached the Chao Phraya and parts Bangkok were affected..

The flooding continued in some areas until January this year and 815 lives were lost as a result of the floods.

Of Thailand’s 77 provinces, 65 were declared flood disaster zones, and over 20 000 square kilometres of farmland was damaged.

"It’s very serious, because with each degree increase in temperature, rice yields are impacted, and therefore you’re getting lower production" he said.

Salinity is the major problem in places like Vietnam and many farmers are abandoning rice farming in favour of prawns.

Image: The 2011 Thailand floods. 

China’s Coca-Cola Shanxi denies workers’ claim of contaminated products

Chinese authorities have denied there are any problems with it’s locally-manufactured Coca-Cola Shanxi Beverages, after an employee claimed mass chlorine contamination.

An anonymous employee told local media on Tuesday that routine pipe maintenance work had resulted in nine batches of products becoming contaminated with chlorine.

Many retailers and individual consumers stopped buying the products as a result of the alleged contamination, leading Coca-Cola Shanxi to test the products in question.

According to the Shanxi Province Bureau of Quality and Technical Supervision, 121 058 cases of the potentially contaminated beverages were produced between 4 February to 8 Fenruary.

Of these, more then 76 000 had been sold by Tuesday and the remainder are still in the company’s possession.

Tests of the products resulted in the Food Quality Safety Supervision Testing Institute of Shanxi Province and the Shanxi Entry-Exit Inspection and Quarantine Technology Centre declaring the products safe to consume, despite chlorine being identified in the samples.

They maintain that chlorine levels in the drinks are less than purified drinking water and therefore safe to drink.

“Drinking small amounts of chloric beverages won’t hurt people, but large amounts can,” Fu Yingwen, director of the inspection and quarantine centre said.

Woolworths sends jobs offshore

Woolworths is the latest food producer to send its operations abroad, as the cost of doing business in Australia continued to increase as the dollar does.

The high cost of manufacturing in Australia has been blamed for several food companies, including Heinz, sending jobs offshore – mostly to New Zealand.

The supermarket giant transferred 40 contact centre jobs to Auckland this week and it will be quickly followed by Imperial Tobacco, which announced it would be relocating its cigarette manufacturing across the Tasman also.

The combination of the high Australian dollar, increases to wages and the supermarket price wars are making it very difficult for food manufacturers to stay afloat.

According to the International Labour Organisation, Australian manufacturing workers earned more than $US35 an hour in 2008, compared to less than $US20 an hour in New Zealand.

Australian manufacturing workers also earn more, on avjeerage, that those in the UK, US and Canada.

In 2010, McCain relocated its vegetable production to New Zealand, leaving Simplot Australia as the largest vegetable producer in Tasmania.

Last year, Foster’s controversially accepted a takeover bid by London-based SABMiller, making Coopers the biggest local brewer, a reputation the company has pledged to maintain.

While the wages in the manufacturing sector are better here than abroad, they still struggle to compare to the high-paying mining jobs, which are seeing countless Australians leave farming and manufacturing jobs behind and relocating to mining towns.

The average age of an Australian farmer is over 60 and a recent study found 75 per cent of Australian year six students think cotton socks are an animal product while others believe yoghurt grows on trees.

Earlier this week, dairy farming was rated the second worst job in the world, based on earning ability, hiring outlook, work environment and physical demands.

”Penalty rates are a significant cost difference to manufacturers, particularly in the agricultural game where you’re unable to properly plan,” Callum Elder, the executive general manager of quality and innovation at Simplot, told the Sydney Morning Herald.

”Our productivity hasn’t increased in the past three to four years, as an industry, but yet we’ve been paying 3 to 4 per cent increases [in wages], which is a large part of the cost.

“It’s very expensive to put people into Australian factories.”

Bundaberg Sugar’s $40 million investment to survive carbon tax

Bundaberg Sugar has invested $40 million on upgrading a mill in southern Queensland to avoid increases in financial payments when the carbon tax is officially introduced.

The company’s Millaquin mill will undergo massive changes to its operations, in a move general manager David Pickering says is a sign the industry is growing.

"Probably the biggest improvement is that the lower moisture bagasse means that the boilers burn more efficiently, which means there’s les CO2 into the atmosphere and also less emissions generally from the boiler stacks," he said.

"The carbon tax is coming in from the first of July, so we want to make sure that we’re operating below the threshold.

“This will allow us to produce more bagasse, which is a renewable energy, rather than coal.

"That means that we, in the marketplace, can remain competitive with our product."

Other companies that are already struggling to survive in the Australian food sector will be hoping the government has listened to requests from the peak industry body for financial assistance.

The Australian Food and Grocery Council (AFGC)’s submission calls on the government to accelerate depreciation provisions for food manufacturers to purchase new plant equipment that will improve productivity and energy efficiency to deal with the impact of the carbon tax.

It submitted it’s recommendations last month, which also included the introduction of a Supermarket Ombudsman to oversee the predatory pricing and anti-competitive behaviour by Coles and Woolworths.