With all of NSW in drought, farmers are struggling through Australia’s worst drought in living memory, and the situation is set to intensify across the country as temperatures reach new record highs in a number of regions.
In the past six months, we’ve seen two Prime Ministers kneeling on cracked red earth wrapping their arms around farmers on the brink of financial and mental collapse. And while the farmers are undoubtedly the face of this drought, its devastation has reverberated along the red meat supply chain that has long been facing escalating pressures. We are now at a point where many links are straining at breaking point but little has been done to support them.
The post farm-gate to plate red meat industry is the unsung hero of the rural economy, contributing around $18 billion to Australia’s GDP. Indeed, this part of the supply chain is Australia’s largest agriculture exporter, generating $16 billion in income, and is one of the largest rural employers by a country mile. So why does this industry seem to be undervalued, undeserving and unworthy of attention? This supply chain is facing a drought of its own – a drought of workers caused by a visa system unfit for purpose, a lack of relief from non-tariff barriers to export markets, excessive operating costs such as energy and an increasing red-tape burden.
This is a nationwide issue stretching the length and breadth of this vast land. A significant number of small stock (sheep and goat) abattoirs have closed in the past few years, due, in part, to these challenges coupled with record commodity prices. Beef has not fared much better, with larger facilities also crippled by high operating costs, including the AACo Livingstone abattoir (NT), JBS Cobram (Sheep, Victoria) and Manildra Cootamundra (multi-species, NSW), all of which have been mothballed in the past two years. A number of WA establishments have changed hands in the last 12 months, with new owners looking at different business models to keep the facilities profitable.
The Federal Opposition last week launched its Red Meat Strategy Discussion Paper. It received limited attention; however it’s a welcome step in the right direction for our 2,000-strong membership base, which is made up of processors, smallgoods manufacturers, wholesalers and independent butchers, who, together, employ more than 150,000 full- and part-time workers within this dynamic supply chain. Importantly, the majority of our members are small business owners, such as your local butcher, and, given the urgency of the situation, AMIC will be working with Labor to ensure they are represented in the consultation and planning process.
Labor’s discussion paper was launched in Gladstone, Queensland, a town no doubt chosen as it was recently given the go-ahead by the QLD State Government for a high-tech abattoir and meat processing facility. We know a project of this scale has the potential to transform a town and the wider region, especially for farmers, but we also know the difficult reality the operators will face in finding workers – local and international – given the current 3,500 vacant positions that prevent processors operating at optimum capacity. A significant proportion of the workforce is temporary and transient and this adds to costs of training as Food Standards dictate high requirements. In the case of semi-skilled to low-skilled positions, the 417 visa (backpacker) is barely long enough to justify the intense training and don’t allow for workers to be transitioned into longer-term skilled meat worker 482 visa. The 482 visa is challenging as often the workers don’t have enough formal education to qualify and written and spoken English requirements are high. Meat processing is a technical area requiring operation of complex machinery and extensive knowledge of food safety, hygiene and animal welfare requirements. Experience needs to be better recognised and written and spoken English requirements need to be lowered to allow for improved access to the foreign workers and to meet the future labour requirements of the industry.
In many regional areas, including those with unemployment rates in excess of 15% such as Gatton (QLD), Murray Bridge (SA) and Tamworth, Cooma and Singleton (NSW), local workforces are reluctant to work in the red meat industry and an overseas workforce is hard to access. For the Gladstone facility to be fully operational by 2021 as planned, serious headway must be made in key areas outlined in the Labor Party’s Discussion Paper by all manners of government whatever their stripes.
As our industry is aware, the future growth, sustainability and global competitiveness of Australia‘s red meat sector will be as a result of its pursuit of quality, product integrity, productivity gains and innovation across all areas of the supply chain. However, investment support is vitally needed and a whole-of-government approach is essential. If Joel Fitzgibbon assumes the role of Agriculture Minister after the widely-anticipated May election, he will need to pull together a carefully orchestrated approach that encompasses vocational training, visas, energy, workplace relations and trade. If David Littleproud remains Agricultural Minister, he will need to do the same.
We all want farmers to thrive, but the reality is that a threatened red meat supply chain beyond the farm gate will be the next crisis farmers will have to face when drought conditions finally turn and production levels get back to normal. Farmers, processors, smallgoods manufacturers and independent butchers need to be unshackled by the current burdens so they can take this valuable product to Australian and overseas consumers. A sustainable and profitable supply chain is one where all participants are valued and supported.