Ten years ago when I was a political adviser to Tasmanian Premier Ray Groom, I sat in a meeting in Hobart with executives from vegetable processor Edgell Birdseye. We discussed a series of charts that showed Tasmania's potato farmers were not as competitive as their Idaho counterparts.
A decade later and Tasmania's vegetable farmers are still fighting the battle to remain economically viable. The farmers, an industry group called AUSVEG and Tasmanian politicians are looking to apportion blame for the fact that the vegetable industry in Tasmania is on struggle street. They spent the last couple of weeks making their way to Canberra, through Victoria and New South Wales as part of the Fair Dinkum Food Campaign.
The Fair Dinkum Food Campaign is just protectionism by another name. Instead of looking for government support, Tasmania's politicians and farmers should be taking a long, hard look at new market opportunities, such as China.
And they are losing sight of the fact consumers will buy cheaper products and if they like the quality, pay little attention to where it is produced. The hip pocket speaks louder than patriotism on supermarket shelves.
When I looked at the vegetable-growing industry in Tasmania in 1995, one of the most obvious problems it needed to address immediately was that farms were small and therefore economies of scale could not be sustained. Today this issue remains largely untouched. Where it takes 450 Tasmanian farms to produce 80,000 tonnes of potatoes, 13 New Zealand farms can produce the same amount.
But instead of addressing this priority, the Fair Dinkum Food Campaign wants country or state-of-origin labelling laws introduced in the hope that consumers can be emotionally blackmailed into supporting Australian produce rather than overseas competitors, even if it is more expensive.
Country-of-origin labelling is protectionism and the loser from protectionism is always the consumer and, in the long run, the producers themselves. The high costs that wholesalers and supermarkets pay for complying with country-of-origin labelling regimes are passed on to the consumer, which in turn impacts on the return to the grower.
And then there's the question of export opportunities, particularly to China, where an emerging middle class is demanding better quality fruit and vegetables. But AUSVEG's leaders, Richard Bovill and Mike Badcock, unfortunately see China only as a threat. On April 21, Badcock said if Australia signed a free trade agreement with China, vegetable growers stood to lose $500 million a year and 5,000 jobs.
Badcock, the Fair Dinkum Food Campaign and the Tasmanian Government are either ignorant of, or are avoiding, three vital facts about the Chinese vegetable market.
First, China is quickly running out of arable land on which to grow vegetables. According to author Ted Fishman, nearly six million hectares of farmland have disappeared in China in the past decade. Therefore China's capacity to export vegetables and feed its growing population is restricted.
Second, as the Chinese become wealthier, they are more discerning about quality. As one leading American agricultural research institute put it last year, strong economic gains have left millions of Chinese consumers clamouring to improve their diets. In most cases, that means more protein and less rice. A point confirmed in US trade magazine Agexporter, which noted last year that demand for high-quality foods had increased dramatically. Organic or "green" produce is gaining in popularity, as are Western foods, spurring demand for Western vegetables.
Finally, while Chinese agricultural practices have been, and still are in many parts, reliant on pesticides and chemicals to a degree that will ensure their produce fails to meet Australia's stringent quarantine requirements, sustainable agriculture is emerging in China. Throughout China, there are now a number of projects designed to ensure a cleaner and more consistent production of vegetables. This is partly as a result of China's accession to the World Trade Organisation and because consumer demand in China for vegetables is becoming more discerning.
There's also more than a dose of raw hypocrisy in the Fair Dinkum Food campaigns sloganeering about the need to preserve the farming way of life. When Japanese or European politicians argue the case for protection of their domestic farming industry on this basis, Australian farmers are understandably outraged. In fact, it's been the preparedness of Australian farmers and governments over the past two decades to advocate open markets that has helped to slowly reduce agricultural trade barriers around the world. To adopt protectionist rhetoric and actions now will weaken Australia's moral superiority in international trade forums.
While the Fair Dinkum Food Campaign is undoubtedly designed to tug at the heart strings of Australians, the cold reality is that Tasmania's farmers and government are asking Australians to pay more for vegetables, instead of becoming more efficient and developing new markets. There's nothing fair dinkum about that.