Sunday, 30 September 2012

Cheap imports sting local agriculture producers

Foreign ownership, foreign food, foreign politics, foreign drought, foreign control.

There is a not a corner of ag that is untouched by a foreign issue.

And that is a concern for everyone - consumers especially.

The alarm bells have been ringing for some time, but it was the boss of Australia's oldest and largest agribusiness to last week sound the alarm.

Elders chief executive Malcolm Jackman declared we are facing a crisis of food manufacturing in Australia, with very few food processors operating in this country.

Even fewer of those are Australian owned.

In the past two years, more than 660 processing jobs have been lost after Heinz, SPC Ardmona, McCain and National Foods closed six factories nationwide.

And that doesn't count many back-room jobs and those in support industries that have quietly disappeared.

"If we're not careful, MasterChef and My Kitchen Rules will all be made with produce produced overseas," Mr Jackman said.

It's a succinct message that goes to the heart of our problems.

Do we want to live in a country that doesn't own or control the manufacturing process for that most basic of items - food?

Mr Jackman's warning has come on the back of a warning of "agflation" from a major bank, which has said 2013 looks likely to be the most expensive for food on record. The northern hemisphere drought will send grain prices skyrocketing, which will cause all food to rise.

The decline of the local food manufacturing sector has been masked by the high Australian dollar of the past two years.

Anything imported is cheaper, particularly food.

And when that food is flooding the market below the cost of production because of unfair subsidies, Australian food manufacturers simply cannot compete.

Look at a can of Italian tomatoes next time you are in the supermarket. The price of home-brand Italian tomatoes can hover at about half the price of locally canned tomatoes because of the high dollar and the crazy subsidies the Italian Government gives to its farmers.

Those subsidies mean farmers can sell their tomatoes for less than the cost to grow them. Figure that out.

But what happens when the Australian dollar drops to half its current level, to about US55c, and the Italians actually bite the bullet and stops propping up farmers who shouldn't be in business?

That $1 tin of Italian tomatoes suddenly becomes a $5 tin.

And if the local Australian manufacturer of tinned tomatoes has packed up by then, there is no local option.

That's why we should all be concerned.

Governments have made much of saying Australia can be the food bowl of the world.

It is a claim farmers find impossible to believe.

And that's because those same governments do next to no fighting on the international market to get rid of corrupt subsidies.

This weekend, the Farm Bill that pays wealthy American farmers money to produce uneconomical food (part of Mitt Romney's 47 per cent of dependents, I presume) comes to an end.

Food is caught in a vicious cycle of cheap - consumers demand cheap, so supermarkets source cheap. And that is usually from overseas.

So that sends our processors out of business.

It just may mean we are sowing the seeds of more expensive food.
Original Article Here

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