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| Executive summary |
| This report presents results from the first of three surveys of Australian vegetable growers conducted by ABARE on behalf of Horticulture Australia Limited. Comprehensive data on the physical, financial and socioeconomic characteristics of vegetable growing farms during 2006-07 and preliminary data for 2007-08 were collected as part of this survey. A comparison with 2005-06 financial year results from a survey conducted in 2007 by ABARE and funded by the Australian Vegetable Industry Development Group (AVIDG) is also undertaken in this report. During 2006-07 there were an estimated 4222 commercial vegetable farms operating in Australia with an estimated value of agricultural output (EVAO) of at least $40 000 a farm. These farms accounted for 85 per cent of all vegetable growing farms. The average area sown to vegetables was 33 hectares a farm during the financial year. However, half of Australian vegetable growers produced vegetables on areas of less than 12 hectares during 2006-07. The majority of Australian vegetables (55 per cent) were produced by farms in Victoria and Queensland. Potatoes and tomatoes were the major vegetable crops grown in Australia during 2005-06, 2006-07 and 2007-08 in terms of area sown, production and contribution to gross value of vegetable production. An estimated 56 per cent of vegetable growers experienced drought or below average seasonal conditions in 2005-06. During 2006-07, seasonal conditions improved somewhat with 48 per cent of vegetable growers experiencing adverse seasonal conditions. As a result of improved seasonal conditions, the average yield of most vegetable crops improved with the exception of tomatoes, green peas and some other vegetables during 2006-07. Vegetable production and crop yields are estimated to have fallen in 2007-08, although results for 2007-08 are preliminary. Cash receipts for vegetable farms during 2006-07 are estimated to have been $888 000 a farm on average, of which 89 per cent was from the sale of vegetables. Vegetable cash receipts are estimated to have risen by 41 per cent on average between 2005-06 and 2006-07 as a result of increased vegetable sales and higher prices received for vegetables. However, preliminary estimates for 2007-08 indicate a fall of around 11 per cent in average vegetable cash receipts as a result of lower vegetable production and lower vegetable prices. Total cash costs in 2006-07 were $650 400 a farm on average, up by 30 per cent from the previous year. The largest share of average cash expenditure for each farm during 2006-07 was on hired labour, packing materials, seed, contracts paid and fertiliser. The costs associated with hired labour are estimated to have risen by more than $45 000 a farm on average since 2005-06. Despite the rise in costs between 2005-06 and 2006-07, farm cash incomes are estimated to have risen by 51 per cent as a result of higher receipts. The average farm cash income for vegetable farms during 2006-07 was $237 600 a farm. Vegetable farms in Queensland had the highest average farm cash income while vegetable farms in Tasmania had a farm cash loss of $2100 on average for each farm mainly as a result of adverse seasonal conditions, higher input costs and lower prices received for vegetables grown by Tasmanian farms. The performance of vegetable growers in 2006-07 was superior on average to that of broadacre farms (sheep, beef and cropping farms). Vegetable farms are estimated to have had an average rate of return to capital, excluding capital appreciation of 6 per cent during 2006-07 up from 3 per cent on average during 2005-06. Larger farms, with more than 70 hectares of vegetables sown, realised the highest rate of return, excluding capital appreciation, on average, at 13 per cent. The equity position of vegetable farms as measured by equity ratio (total business assets as a percentage of total farm capital) remained high in 2006-07 despite a higher average level of debt. The average equity ratio was 88 per cent during 2006-07. Additionally, only around 2 per cent of vegetable farms had both an equity ratio of less than 70 per cent and a negative farm cash income. The majority of vegetable growers (92 per cent) used irrigation water for vegetable production during 2006-07 at an average rate of 4 megalitres a hectare. Vegetable farms using irrigation water for vegetable production had a much higher average yield than those not using irrigation water during the financial year. Around three-quarters of vegetable growers tested their produce for chemical residues. However, the proportion of vegetable growers who tested crops for chemical residue varied between states with only an estimated 17 per cent of vegetable growers in Northern Territory doing this. Similarly, an estimated 62 per cent of vegetable growers had a food safety program in place. An estimated 38 per cent of vegetable growers participated in, or were considering, an environmental management plan. Larger vegetable farms, with more than 70 hectares sown, were more likely to undertake food safety precautions. Almost all vegetable growers were concerned with pests and diseases. An estimated 94 per cent of growers followed a set pest and disease monitoring program. Additionally, 89 per cent of vegetable growers rated pest and disease management as a high or very high research and development priority during 2006-07. Other important priorities included higher yielding varieties and farm productivity. The most common impediment to the future viability of vegetable farms that growers identified was increased farm input costs. The majority of vegetable growers also indicated other impediments including, marketing costs, low vegetable prices, access to and cost of labour and availability of irrigation water. Despite these challenges, vegetable growers were generally positive about their future involvement in vegetable growing. At the time of the survey, around two-thirds of vegetable growers expected to be still engaged in vegetable production in five years time. Additionally, 29 per cent of vegetable growers intended to expand vegetable production in the next three to five years and 18 per cent expected to focus on another type of agricultural production in five years time. |