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How productivity is destroying rural Australia

By Fred Fuentes - posted Wednesday, 11 April 2012

Behind the hype of Australia’s mining boom and “economic stability” 
lies the very real crisis affecting rural Australia. While the impacts of droughts and floods (aggravated by 
capitalist-induced climate change) are part of the explanation, the
real culprits for the devastation being wrecked on community after community is big business and the free market fundamentalists running the country in their interests. And unless a fundamental shift in priorities take place, the situation 
is set to worsen.

Speaking at the annual Outlook conference organised by the Australian
Bureau of Agricultural and Resources Economics and Sciences (ABARES) 
on March 7, business consultant David McKinna said the Australian food
industry is undergoing one of its most profound structural shifts

The March 8 Australian reported that he said: “And it is regional Australia and small country towns that will bear the brunt of this 
shift; jobs will go, schools will close, the local doctor will leave 
and there will unfortunately be suicides — we are talking about a 
massive social impact here.”


McKenna said the “immense power” of Coles and Woolworths — which 
together control 80 per cent of the market — was responsible for the fact that
“multinational food companies are being driven out of business” and
relocating offshore. He also pointed to consumers chasing cut-price specials as a contributing factor.

But McKenna’s outlook confuses the symptoms for the disease.

These problems are the logical outcomes of the profit-at-all cost policies being pursued by state and federal governments, regardless of the party in power. Take, for example, the January closure of the Heinz tomato factory in Girgarre, a town of about 150 people located in the Goulburn Valley, Victoria.

In May last year, Heinz announced it would close down Australia’s second last tomato processing plant and transfer its operations to New
Zealand. The move left 146 people without a job, although this is just the tip of the iceberg. Overall job losses are expected to be closer
to 700 due to the run-on effect that the closure will have on the 53 

Writing in the March 11 Age, Gary Tippet said locals were angry: “The place was running efficiently, making money. About eight years ago, according to [former Heinz worker] Ken Covington, it was the most profitable site in the global Heinz empire and one of the most profitable in Australia. “‘We could understand why they’d shut it’ says his wife Ruth. ‘I think
they threw a dart at the map’.”

Heinz Australia’s explanation has been to garble some nonsense about “productivity initiatives to accelerate future growth”.


For the free market fundamentalists that place “productivity” above all else, responding to meet community needs is out of the question. 
The federal Labor and the state Liberal governments have sat on their 

All local Liberal Federal MP Sharman Stone has done is issue vague
calls for “financial support” for Heinz (which has already received a number of government hand-outs) and pretend that the factory closure was due to the yet-to-be-introduced carbon price.

The only response it seems that the state Labor opposition could muster was to call on the state government to ensure government
caterers no longer used Heinz tomato sauce.

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Article edited by Jo Coghlan.
If you'd like to be a volunteer editor too, click here.

First published at Green Left Weekly on 5 April 2012.

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About the Author

Fred Fuentes is a member of the Socialist Alliance and an author for Green Left Weekly.

Other articles by this Author

All articles by Fred Fuentes

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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