Dollar hammers agricultural sector

Story Added : 04th May 2011

Sales manager of Webster Limited, Australia's largest onion grower, John Hosken, said his company was seeing serious margins coming straight off the bottom line as growers in other countries take advantage of our appreciating currency.

“Worried is an understatement, we’re quite stressed about it,” he said.

“We have a critical reliance on export markets. It’s having a severe effect on our operating margins and our ability to compete in our markets that we’ve traded in for some years now.”

Ausveg board member, Geoff Moore, has been growing potatoes for 40 years and said that during this time imports have increased significantly to the detriment of the industry.

He said five years ago imports were about 30 tonnes, but today they’re close to 90 tonnes.

Mr Moore said other countries had policies in place protecting primary producers, but Australia had failed to look after farmers in this regard.

“We’re very concerned when government talks of free trade - it should be more like fair trade.”

“We’d certainly like government to take a more proactive approach to monetary policies when it comes to pressures that we’re facing as an Australian exporter at the moment.

“If we want to protect Australian primary producers we have to get government to listen and implement a fair trade agreement.”

NAB business economist, Michael Creed, said the runaway dollar is rising against the rest of the world on the back of the mining boom.

One glimmer of hope is that strong commodity prices are shielding many agricultural businesses from our strong dollar – for now.

“What is buffering a lot of agricultural industry is high global prices,” Mr Creed said.

“If they do start to pull back then you’ll start to see our competitiveness erode as more suppliers do come online.

“It’s hard to put a number on that at the moment but you’d expect it to have a lot larger impact than what we’ve already seen.”