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ABARES outlook – short-term pain, long-term gain

Consumer insights

ABARES’ Agricultural Forecasts and Outlook  report for the March quarter 2021 is suggesting labour shortages will continue into next season but the investment in tech, innovation and new practices is paving the way for a more resilient horticulture sector that is less vulnerable to labour shortages and potentially more competitive in export markets.

ABARES’ report says the assumed fall in the supply of overseas labour is forecast to reduce production of some horticultural products in 2020–21, despite favourable seasonal conditions. Production of fruit is forecast to fall by around 17% and production of vegetables by around 2%. Prices of summer vegetables, stone fruit, pome fruit and table grapes are forecast to increase by between 7% and 29%.

The report goes on to suggest the challenges of COVID-19 present the industry with an opportunity to put itself in a stronger long-term position that is better prepared for future market upheavals… and help protect the industry against future labour shortages.

Labour saving technologies could also lower variable operating costs, increasing the competitiveness of the industry in growing export markets. However, this kind of innovation requires significant capital investment, and may also require changes to existing production systems.

APAL CEO Phil Turnbull said ABARES’ findings reinforced APAL’s calls for growers, industry and policy makers to focus on what is working this season and translate these into improvements to existing and new programs and policies.

“Our Autumn Orchard Walks begin this week and are looking at how Covid-19 has changed orchard management practices – there are some real positives that are worth locking-in,” said Phil.

At a policy level, APAL is proposing expanding the Seasonal Worker Program to make it more flexible, to streamline administration and with the goal of allowing workers to move more freely among employers.

With ABARE anticipating international labour supply may improve to 70% of pre-Covid levels for the 2021-22 season, Phil believes its time to review the successful incentive programs such as the Instant Asset Write-off and consider programs that can continue to help growers invest in permanent changes such as harvest platforms.

“The platforms are gentler on pickers and the fruit. They are permanently changing the nature of the work and making it physically possible for a wider range of people. With the generous relocation and accommodation incentives failing to have the impact we hoped for, it makes sense to revisit the policies are making positive and permanent changes, and at the same time creating more attractive opportunities for local year-round employment in regional areas.”

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