Vegetable growers lack confidence in the industry’s future

Results from the Grower
Confidence Survey, conducted by national peak industry body AUSVEG, show that
grower confidence in the vegetable industry has declined by 3.5 per cent during
the July to September 2015 quarter when compared to the previous quarter.

The survey involves a selection of ten questions relating to how confident
growers feel about key economic indicators, including macroeconomic confidence,
investment confidence, market confidence and confidence in government policy.

The confidence index has been constructed on the basis of these survey results
in relation to an initial survey conducted for the quarter ending March 2015.

“Australian vegetable growers are becoming more uncertain about the
sustainability of their future within the industry,” said AUSVEG CEO Richard
Mulcahy.

“Producer confidence levels are found to be strongly correlated with, and a
leading indicator of, turning points in economic activity. If growers lack
confidence in the industry they are less likely to invest and expand their
operations, in some cases resolving to leave the industry all together.”

“These results are concerning for all stakeholders in the industry, as the most
recent data on the gross value of the vegetable industry shows that it has
declined by over 6.88 per cent.”

“A reduction in investment can have detrimental effects on industry jobs growth
and production.”

AUSVEG is the leading horticultural body representing more than 9,000
Australian vegetable and potato growers.

The results show that confidence levels in government and investment have both
declined over the survey period, supporting the overall decline in grower
confidence. The government confidence index has declined by 28.4 per cent over
the quarter and the investment confidence index has declined by 6.3 per cent.

“Investment confidence is measured through survey questions designed to
understand grower sentiment towards future input costs such as labour, fuel or
freight costs,” said Mr Mulcahy.

“The most recent report conducted by the Australian Bureau of Agricultural and
Resource Economics and Sciences shows that production costs have increased by
an average of 4 per cent since 2012-13. These latest survey results prove that
production costs may now be having an impact on grower confidence and therefore
continued investment and growth within the industry.”

The AUSVEG Industry Development program is funded by Horticulture Innovation
Australia using the National Vegetable Levy and funds from the Australian
Government.