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Australian farmers sold short by cheap food

vegetablesHow much do you pay for tomatoes? Bananas? What about for your garlic?

If you are one of the 90 per cent of Australian shoppers who buy garlic imported from China you're spending around $2/kg. Buying organic, locally-produced garlic on the other hand, can set you back $38/kg. But don't be fooled about which is really cheaper.

Throughout his 2007 election campaign Kevin Rudd pledged to address what he termed 'inflated grocery prices,' contending that 'the increasing cost of living is felt most sharply by families at the local supermarket'.

In reality, Australians are spending less at the supermarket than ever before: our expenditure on food is 14 per cent of household income, down from 22 per cent in the 1960s. The declining price of agricultural products is the main reason why agriculture's share of the economy has dropped from 14 per cent in the 1960s to 4 per cent.

But this cheap food has come at a cost, one ignored by Rudd, but tallied on the livelihoods of Australian farmers and on the degradation of the Australian environment.

In his recent book, The House on the Hill: The Transformation of Australia's Farming Communities, social researcher Neil Barr describes the bleak future facing independent farms and the country town connected to them. The core of his pessimism is declining commodity prices.

Barr grew up on a small, struggling stone-fruit orchard outside Melbourne. He uses his parents' experience as an illustration: when they bought a farm in 1953, ten acres of productive orchard was sufficient to earn a reasonable family living. The falling price of fruit and the rising cost of growing it meant that before too long the amount of land required to make an income rose to 15 acres. It kept rising. Barr's parents gave up when it reached 30.

'Get big or get out' has become a truism of modern farming: if farmers survive it is by buying out their failing neighbours. Only one in two farming families will pass the business on to a successor within the family.

Falling food prices and farm aggregation are both cause and effect in a complex network of changes that have transformed Australian agriculture. These range from the triumph of global trade over national schemes of price fixing and controlled production, to the impact that women entering the paid workforce has had on the way Australians eat.

Time spent preparing the evening meal, for example, has dropped from two hours in the 1950s to one hour in the 1980s, to between 20 and 30 minutes today. With time-poor shoppers increasingly turning away from raw produce to processed food like frozen chips and tinned tomato sauce, farmers are getting an ever smaller proportion of the money we spend on food.

The rise of the supermarket giants, Coles and Woolworths, has further weakened farmers' financial position. Farmers are increasingly locked into direct supply arrangements with supermarkets who effectively set prices and transfer risks, such as quality control, to the growers.

But if farmers are suffering from our appetite for cheap food, so too is the land.

Around 70 per cent of the 500 million hectares of land used for agriculture in this country is degraded. The remarkable gains in agricultural productivity, which have helped make food so cheap, have been dependent on clearing, poisoning native grasses, draining swamps, and intensively fertilising.

The former chief of CSIRO Land and Water, John Williams, has put it bluntly in official reports on the environmental impact of Australian agriculture: 'business as usual is not an option'.

Patrice Newell is a biodynamic farmer of garlic, olives and beef cattle. She is adamant that cheap food is a furphy, as prices fail to factor in environmental expenses. Australia's industrial agribusinesses do not pay for their real water use or soil degradation: the big profits are a mirage.

For an industry that exports 70 per cent of its product (for some crops, such as wheat, the figure is more like 80 per cent), any changes to the way food is costed will have significant economic impacts. But Newell insists this dependence on exports is what we should be giving up, rather than small, independent, environmentally sustainable farms. 'What's the point of destroying the Murray-Darling Basin to export food? I mean, why?'

The real cost of food is not what politicians want to talk about, but we must. So how much do you pay for your garlic?

Sarah KanowskiSarah Kanowski is a writer, and a producer and broadcaster with ABC Radio National. Her essay on food and farming in Australia can be found in the online edition of Griffith Review Edition 27: Food Chain.

Topic tags: sarah kanowski, farmers, cheap food, Coles, Woolworths, The House on the Hill



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Existing comments

"In reality, Australians are spending less at the supermarket than ever before: our expenditure on food is 14 per cent of household income, down from 22 per cent in the 1960s. The declining price of agricultural products is the main reason why agriculture's share of the economy has dropped from 14 per cent in the 1960s to 4 per cent."

"Australia's industrial agribusinesses do not pay for their real water use or soil degradation: the big profits are a mirage."
In real terms though, Australian families spend more at the supermarkets on food than the 1960s - simplistic percentage figures do not show real expenditure for families today on the greater range of necessary items than a household budget met in the 1960s.

Sarah's insistence that agribusinesses are exploitative on all fronts is a gross generalisation and must be very offensive to farmers.

Sarah is right about Mr Rudd and the price of food, he and the Government have ignored the plight of farmers - how much lobbying was done by Woolworths and Coles to change the law recently to allow inported meats into the country?

Greed and power are the problems, power in the wrong hands, not farmers'.

Fr Mick Mac Andrew Bombala-Delegate NSW | 09 March 2010  

I don't buy garlic.

But there are two issues which need to be addressed in this area:

The strength of the two giants Coles and Woolworths, and the free trade agreement that the Howard government signed with the USA. And of the second we are paying for it now.

John Morgan | 09 March 2010  

The issue of food miles, of the carbon emissions implicit in global transport of bulk goods, such as foodstuffs, is an issue to be addressed as part of a carbon tax; at the same time, it will engender localised food production, minimising the lengths of the logistical chains on which our retail giants rely, and possibly of benefit to smaller, localised food businesses.

As with all other users of the land, Australia would be well-served by encouraging its "industrial agribusinesses" to sustainably use the land and water resources under their control, rather than irreversibly quarry the fertility out of them.

David Arthur | 09 March 2010  

I enjoyed reading this and your longer article in the Griffith Review. For me it confirms our greater need for information about what we buy and eat: for us to know 'what we pay' for our garlic, we need to know more about what happens on its way to our plate. Apparently I am not alone in thinking this - the government's current review into food law and labelling received 6,000 submissions. See details of the review at http://www.foodlabellingreview.gov.au/
Make a submission - loudly!

Annmarie | 09 March 2010  

For once I agree, at least in part, with Fr Mick, and also with John.

I see two problems; the first is the retailing duopoly which pushes prices up for customers and simultaneously screws growers. My contribution is to buy as little as possible from the big two and to patronise the smaller fresh food businesses.

The other problem is elimination of trade and other barriers to imported foods that sees fresh fish from Vietnam, fresh prawns from India and China, dried fruits from North Africa, citrus fruits from California, frozen spinach from Belgium, canned tomatoes and fresh Kiwi Fruit from Italy, and fresh onions from who knows where, that pushes local products both fresh and packaged off the shelves and is used by the duopoly to screw local producers - primary and secondary - even further. But this is not a problem created solely by the Rudd government.

It's just another phase in the process begun in the 1970s when first the textile and footwear industries, then the white-goods and electronic industries, then the engineering and plastics businesses, and more recently the call centre and billing industries were sacrificed in the name of free trade.

When it began in textiles, nobody except those working in textiles worried. After all, the textile industry, so it was said, was inefficient, and imports would give us cheap clothing. And so it continued, as each local industry was offered up on the altar of economic rationalism. Pity about the jobs for migrants, and the apprenticeship training programs, and the diversity of skilled employment. And now it is the farmers' turn, but they will be followed by others - publishers, writers, educators and so forth - until all we will be left with is house building, fast food and retailing imports - and of course mining, the root cause of the problem.

I sympathise with the predicament farmers find themselves in, but the problem is much bigger bigger than farming.

Ginger Meggs | 09 March 2010  

I only buy Australian garlic and I wouldn't waste my time with the greatly inferior Chinese variety. I pay more for my garlic, but buying it at the market means that it is not exhorbitant for the amount I use. However even at the market you have to search for the Australian variety, . If you ask the stallholders where the product comes from and refuse the imported varieties,they have a reason to supply what the consumer wants.

When people are prepared to pay for quality, even the large retailers take notice. Both of them now stock their Homebrand minced Australian garlic in small containers in their fruit & veg sections, at a time when most other manufacturers still list their ingredients from Australian and imported sources. You only have to open the jar to tell the difference!

Anne Stableford | 13 March 2010  

Hi from AUSTRIA,

I fully agree with Sarah Kanowski's opinion. It is the same here, farmers - mainly the mountain farmers who do that much for the environment, working like slaves on steep hills - are slowly losing the battle to survive. Their sons do not want any more to work like their fathers for so little money and reputation. The European Community mainly supports the big farmers, mass production ...
Garlic here also comes mainly from China, it is hard to find Austrian or German garlic on the market. If I can find local one, I always buy it.
I also agree that food became much cheaper, no matter what people say. There is a lot of "throwing away" of food in our countries while complaining about the prices for food.

At least, in Austria the market for organic food is relatively big, 12 % of Austrian farmers work on organic basis - which is HARD as it is not what the European Community and the big food markets want....

Wilma Allex | 17 March 2010  

I'm amused at how differently the book The House on the Hill is interpreted. In this case, I don't agree that it is catastrophic. At least that's not how i wrote it. I think that assessment says much about the preconceptions which were taken into the story in Eureka Street.

Neil Barr | 04 May 2010  

If we are Australian then we should buy 100% Australian - - it is not only a matter of national pride but a matter of future national security...

crater | 30 September 2010  

If we are Australian then we should buy 100% Australian - - it is not only a matter of national pride but a matter of future national security...

crater | 30 September 2010  

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