00:01I think the ones that we have seen the greatest cost of production increases in are particularly
00:09vegetables, things that have high fertiliser input, high diesel input due to anything that
00:18requires diesel for harvesting, for sowing, for spraying and those that have long distances
00:27to the supermarket distribution centres, but really the cost of production is increasing
00:36across the board. It's not just the diesel costs, but of course all the things that oil
00:42is a component of there, we're seeing price increases across them and fertiliser. So I
00:51think it will be pretty much across the board, although the quantum of price increases may
00:56change from one product to another.
00:59So Jolyon, there also seems to be, from what I'm reading, a real dilemma for dairy. We've
01:04heard from Norco this morning announcing an increase of five cents a litre. Why is this
01:08war in the Middle East seemingly hitting dairy so hard?
01:11Well, dairy is very much like, and I can't speak for dairy farmers, but it's very much
01:16like fresh produce. It is a highly perishable product. In dairy you have a couple of days
01:22to get it from the farm gate onto the supermarket shelves for a lot of fresh produce, very similar
01:29sort of turnaround times. So that means you can't wait till your diesel tank is topped up or until
01:38the price in your local area goes down. It means you can't hold it back on farm, and so you
01:45have to
01:46get it out there. You have to harvest, you have to transport it to the distribution costs. So these
01:53price increases are immediate and they're unavoidable.
01:57I know that the NFF's Horticultural Council, which you're from, pencilled an open, or penned
02:04rather, an open letter to the supermarket chains urging them to take up price increases. What sort
02:09of response have you had? None. So they haven't come back to us, but they certainly have commented
02:17in the media. And I suppose what it has done for us is to just confirm our concern and to
02:24praise our,
02:25and perhaps raise our level of anxiety, because all we've heard from them are these sorts of weasel
02:31words around working with their suppliers to navigate the best path forward. No mention of
02:38taking a fair and reasonable approach to growers' requests for unavoidable price increases.
02:45And I think the reason for our concern, Catherine, is that the ACCC's recent report on competition
02:52supermarkets made it very clear that during COVID, the supermarkets not only maintained their margins,
02:59but in many cases increased them. So, you know, it's that old never let a good crisis go to waste.
03:05The supermarkets are very adept at putting the pressure back on growers, but using consumer
03:13understanding of a crisis to raise prices and thus increase their margins. So if the big supermarkets
03:20put prices up, are you concerned that that won't filter back through to the farmers?
03:27Absolutely. And that's the point I've just been trying to make with the ACCC report,
03:31when there have been price increases in the past for things like COVID and other disruptions,
03:38beyond the supermarkets control. But they've been very good at protecting their margins and making
03:44sure it's their suppliers, particularly fresh produce suppliers, who carry the total burden of those price
03:51prices. And if I can just ask you, Jolyon, about regional areas perhaps being disproportionately impacted
03:58by this war and the prices, is that something that you think is going to be a problem or not?
04:04Very much so. So while we have seen some modest improvement in the availability of diesel
04:11and the price, it has to be said, it is still far worse in regional areas than it is in
04:19the urban and
04:19peri-urban areas. So not only do regional areas usually have higher prices for their fuel and for their
04:29fertilizer because they have to be transported out to those regional areas, but they also face higher costs
04:35in terms of transporting their produce back to the distribution centers of the supermarkets.
04:41So it is very much a problem that is exacerbated in regional areas.
04:48Jolyon Burnett, National Farmers Federation, thank you very much for your time.
04:52Thanks for taking an interest.
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