GST and market issues key to horticulture profits
18 November 2015
The Voice of Horticulture has identified a number of emerging policy issues that impact on the profitability of horticulture producers. A recent survey of Voice of Horticulture members has revealed that a GST on fresh food is one of several market issues of concern.
The Voice of Horticulture has had a strong endorsement of key policy platforms and has identified a range of issues of importance in a recent survey of members. The Voice of Horticulture, representing 31 peak industry groups from across Australia, has sought the opinions of member groups on issues of importance, prior to its Annual General Meeting on 27th November.
The debate over a Goods and Services Tax (GST) on fresh foods and other market issues were identified in the survey as being key to horticulture industry profitability.
John Dollisson CEO of Apple and Pear Australia Ltd has suggested grower concern over a GST on fresh foods is very real. “Growers typically operate in a price taking environment and are obviously concerned that any price increase from a GST will ultimately impact on grower returns.”
Growers costs of production have blown out with labour and energy charges and other input costs increasing, whilst volumes of sales through supermarket have remained sensitive to price.
According to Mr. Dollisson, “Preliminary analysis of CPI data suggests that the price of fresh fruit and vegetables have increased the least of the food basket of commodities over the last 15 years.”
“We need to encourage Australians to increase their consumption of healthy fresh fruit and vegetables. Increasing the price by 10 or 15% will not encourage that. A GST on fresh fruit and vegetables would potentially lead to a switch to other snack foods and reduced margins for growers,” he said.
Several industry representative organisations identified a GST of immediate threat to grower profitability. The Issues of Importance survey also identified Country of Origin labelling, a refreshed Horticulture Code of Conduct and improved international market access as other key market related issues.
Chair of the Voice of Horticulture and citrus grower, Tania Chapman believes that the industry is poised for significant growth. “Whilst exporting volumes are steadily increasing we cannot afford a downturn in domestic sales. Growers often operate on wafer thin margins and need improved prices to offset rising costs. A GST is likely to put pressure on farm gate prices which can, in turn, threaten their viability,” she said
Ensuring that Horticulture Innovation Australia provides better outcomes from growers was ranked as the most important policy platform in the Voice of Horticulture Issues of Importance Members Survey.
Chair, Voice of Horticulture
0428 291 717
Director, Voice of Horticulture
0413 111 123
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