Growers fear supermarkets will force them to absorb new biosecurity levy

And the levy will be just another cost to absorb for every horticulture producer nationwide, according to Queensland Fruit and Vegetable Growers chief executive Rachel Chambers, who is expecting supermarkets to baulk at paying farmers more to cover it.

She said the scheduled July 1 levy introduction represented another layer of pain for small to medium players desperately clinging on to their businesses while pitched in a losing battle against supermarket giants.

"Our members have stated really clearly that margin squeeze is the problem in having both the escalation of input costs and the stagnation of revenue at the same time," Ms Chambers said.

"That's where supermarkets make money. We have growers saying that for 15 years plus they have not had a price increase.

"You are asking big corporates to be kind and that is not their job, their job is to make money for shareholders."

Ms Chambers said the situation was compounded by a 30 to 65 per cent rise in input costs that most producers had absorbed since 2020 and other looming pressures such as Pacific Australia Labour Mobility Scheme changes and a 5.75 per cent increase to the national minimum wage.

"We are getting paid the same amount and carrying all the losses," she said.

"What we are saying (to government) is that every time you add a cost it has nowhere to go besides sending growers out the back door quicker.

"And that the conversations we are having with supermarkets is they are not allowing us to pass them on because they are worried about the cost to consumers."

She also believes the government's BPL will not have a direct cost to the consumer as some fear because the supermarkets "have kept the same pricing for so long."

A Woolworths spokesperson said the retailer would "continue to have collaborative discussions with our supply partners."

"The cost of production inputs to suppliers is constantly fluctuating and we have a range of ways to respond, based on the nature of the product and its unique market," they said.

When also asked if the company would reflect the additional charge of the levy in supplier rates, a Coles spokesperson said "this is an issue impacting agricultural and fisheries producers - and doesn't come into effect for another 4 months."

"We would suggest you would be better to speak with impacted producers, to ask them whether they are going to increase the price of their goods," the spokesperson said.

LEVY CHANGES

The government responded to months of protests from the agriculture sector by last week announcing alterations to its contentious Biosecurity Protection Levy "to ensure it's more equitable and more transparent."

The measure was first announced in the 2023 Federal Budget as part of a new sustainable biosecurity funding model and is scheduled to begin on July 1.

The government had originally announced that the new tax would be based on 10 per cent of existing statutory agricultural levy rates.

However, it said the BPL will now be set according to "an industry's average share of gross agriculture, fisheries and forestry production over a rolling three-year period."

With only four months until the levy comes into effect, it is still unclear how the money will be collected from growers and distributed once it leaves Treasury. Department of Agriculture, Fisheries and Forestry officers told Senate estimates last week that the inner-workings were still being settled.

Meanwhile, Citrus Australia CEO Nathan Hancock is also concerned about the lack of design and implementation detail and has demanded to the release of impact statements that informed the policy.

"There are still key elements missing, firstly that the funding raised through these measures is not hypothecated and secondly that industry still doesn't have a say on how the money is spent," he said.

"Probably most frustrating for the agriculture industry as a whole is that the recent statements continue to ignore calls for other sectors to contribute to biosecurity incursion responses, for example through a container levy."

SUPERMARKET INQUIRY

The federal government also recently announced an inquiry into supermarkets alleged price gouging and abuse of market power.

The review of the Food and Grocery Code of Conduct by Craig Emerson, a former Labor minister and economist, will seek to dismantle the relationship between wholesale, including farmgate, and retail prices.

However, Ms Chambers said there was "a sad irony" in the situation.

"The fact that while government is rightly investigating whether supermarkets are treating growers and consumers fairly, their own policies are increasing growers costs," she said.

She also said a Coles submission to the inquiry stating that it had considered 3000 grower requests for a price increase left out "a fundamental omission" that none were approved.

"Growers have been shouting at them and saying we cannot continue to hold all these costs if we cannot pass them on, and the supermarkets are saying to be more efficient and to lower your costs," she said.

CUTTING THROUGH WITH CARTOONS

Queensland Fruit and Vegetable Growers has also gone old school in commissioning cartoons to capture often multi-layered and complicated issues for a mainstream audience that can be difficult to express in a short media interview or press release.

"We are going to start releasing cartoons in newspapers to explain very complex issues," QRVG chief executive Rachel Chambers said.

The first release is a cartoon of a hunched-over grower and in his back are forks with each representing a major input cost and business impediment faced by horticulture growers, including electricity, industrial relations, natural disasters, regulations, levies and taxes, transport and fuel.

"Meanwhile the government is yelling at him 'crisis'. The environmentalists are yelling 'vandals'. The unions are yelling 'exploiters' and the supermarkets are asking 'how low can you go?'" Ms Chambers said.

"What we are saying is that the growers have nowhere to go, everyone is yelling at them but they are stuck.

"But we are also asking the supermarkets 'how low can you go?' - as in with your behaviour."