New $800,000 program will help determine WA fruit and vegetable growers’ ‘true cost of production’

Email Shannon Verhagen
Pink Lady apples in Manjimup.
Camera IconPink Lady apples in Manjimup. Credit: IAIN GILLESPIE/WA News, IAIN GILLESPIE

Data obtained from a new $800,000 program is set to help WA fruit and vegetable growers understand their “true cost of production” to bolster negotiations with marketers over their products’ value.

As more growers invest big money into machinery off the back of crippling labour shortages in the sector, it will help gauge the impact to their bottom lines.

Industry leaders hope “as many growers as possible” put their hands up to be part of it.

The State Government today announced the launch of the Building Horticulture Business Capacity Program — developed in conjunction with Hort Innovation, Pomewest and vegetablesWA.

The four-year program will provide farmers with access to an expert farm consultant, to take an “an honest and thorough look” at their business and where they can make improvements.

The consultant will work with them on business analysis, data collection and examining farm management practices to determine each individual growers’ cost of production.

Pomewest chair and Nannup apple grower Mark Scott said it would fill a gap in the industry’s data.

We have this information on a Federal level, but we lack local detail.

Mark Scott

“WA is very different in that labour costs are significantly higher than over east and certainly overseas.

“We need to get a good handle on what the cost of production is and what is a truly sustainable cost of production.”

It is hoped to help growers have “meaningful conversations” with marketers about what their product is “truly worth” so growers are paid for the efforts and inputs required to produce WA’s high quality produce.

Mr Scott said growers undertook a lot of work on-farm that needed to be factored into the calculations like improving soil health and integrated pest management.

And with a spike in machinery purchases as thousands of seasonal jobs usually filled by backpackers going begging across the State, machinery purchases were also a major factor to consider.

“The industry doesn’t have a really good handle on what is the right level of debt, what is the right level of machinery purchases,” he said.

“Those things have come into the fore with COVID-19 and the labour shortages.

“A lot of growers are investing into machinery to offset labour, but we need to understand how much that costs and how that reflects in their bottom lines.”

The program — which will help farmers identify where they can modify their horticulture enterprises to improve profit margins, business resilience and sustainability — builds on a pilot project managed by vegetablesWA over the past three years.

Following a full business analysis, successful applicants will receive a 90-minute one-on-one session with a consultant and group training sessions to discuss common challenges.

WA Agriculture Minister Alannah MacTiernan said the program would not only improve business skills for individual enterprises, but generate flow-on benefits to the broader industry.

“Businesses can access high-quality advice and training to enhance the performance of their operations and the profitability of their enterprise,” she said.

“Our Government is committed to investing in practical measures that support WA's diverse horticulture industry to adapt to a rapidly changing operating environment to provide them with the best chance to grow and prosper.”

Mr Scott hoped to have at least 12 growers sign up initially, which would give the industry a a “good starting point,” but said it would be good to have “as many as possible” in the long run.

More information can be found at agric.wa.gov.au/BHBCprogram.

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