Much has been said of sustainability by our media and politicians. Unfortunately though, there seems to be little large scale change occurring in the sector that really needs it most – agriculture. After attending a recent public lecture by Helena Norberg-Hodge however, the concept of localisation, and the dilemma of high labour costs for producers, really got me thinking. This article is therefore the first of a three part series that will explore this topic in greater detail.
What is localisation?
Localisation is the shortening of distances between the producer and the consumer. Structurally, it means cutting out the middle man. Practically, it is the local farmers market, the coop supplier, the community garden, or the specialist grocer to name but a few. Although gardening is not normally considered extreme, to implement this basic model as the foundation for an economy implies a radical shift in production, consumer behaviour, and policy incentives. Does it offer a viable, sustainable future though?
The Big Picture in a few small bullet points
- Agricultural output in Australia is estimated to be worth $48.7 billion to the national economy in 2011-12.
- As of 2012 this translated into our farmers feeding around 60 million mouths annually, with around $30 billion earned from exports alone.
- Structurally, in another ESSA article, Elijah Lim points out that large farms account for the majority of farm output, with around 10% producing 50% of the total as of 2005.
- This is on top of a growing trend in farm sizes, with the average Australian farm increasing in size from 2720 to 3340 hectares between 1982 to 2002-03.
- These figures suggest that the Australian farmer is of vital importance for not just Australia, but also our export markets, with around 60% of produce exported in 2011-12.
- Finally, and importantly for the industry, much of what Australians eat is actually sourced within Australia already (around 93% excluding seafood).
Farming in Tasmania has been a mainstay for many families for countless years. Anyone who has ventured this far south will be well aware of why this is so. Tasmania has a disproportionate share of Australia’s total rainfall, and a climate that is perfectly suited to a diverse range of vegetables and animal production. Of late, Tasmania has also gained a reputation with the food market for produce that is GM and hormone free thanks to tight state government policy.
But it is the small shift in the local mindset that is really revolutionising the states production – a shift towards ‘niche’ markets. This shift is noteworthy, as it does involve aspects of localisation. However, it is not driven by a localisation agenda – rather it is one that is self-conscious of the realities facing the national food industry, and so is looking for market holes and opportunities.
Though, one of the biggest problems facing small to medium sized farms in Tasmania is that of labour costs. High labour costs have plagued the agricultural industry of almost every country through the pressures of productivity, standardisation, and the attractiveness of high skill, high pay service industries in the cities, acting as a severe drain in the available labour pool. The Tasmanian experience is exactly that: one where farmers have been forced to seek efficiency gains through loans, land clearing, labour minimisation, and economies of scale – all whilst working the land individually or as a family unit, and now more and more, maintaining a second income stream.
Recently however, organic labour intensive Tasmanian farms have started to break out of this labour cost constraint, mirroring ideas of localisation, whilst remaining open to key exporting opportunities. This model appears to rely heavily on foreign labour however. This has occurred in two separate but interconnected ways: working holiday visas, and volunteers. The latter encapsulates an extreme situation where the productivity of the individual worker has been completely decoupled from the cost. The same can be said for the working holiday visas though, more often than not, they have volunteered only to qualify for visa extensions.
As one has probably already guessed, it is not problem free however, as this is a fragile business model that is susceptible to market and environmental fluctuations, or policy changes. Given that monetary payoffs are unlikely to be completely decoupled from labour, a good example of one potential shock is the proposed taxation of foreign holiday workers in the last budget. For an individual picking strawberries on a working holiday visa and earning maximum between $10-15 per hour, a 33% tax on that income is likely to have a severe impact on their choice of industry and location.
Further, recent government policy changes to working holiday visa holders and volunteering is already jeopardising this fledgling organic industry in Tasmania. The original incentive mechanism where the majority of volunteers were volunteering to fulfil requirements for extension of their visas, has now been stopped indefinitely. As such, the cynic in me believes that this labour sourcing model is not sustainable in the long term, yet alone on a national scale.
With this in mind though, I am hesitant to give up on this idea. Although I have to admit that I wasn’t completely sold on the economic credibility and practicality of Helena’s localisation model, I do believe there are some valuable points to take away from it.
Therefore, I will explore this topic and issues surrounding labour costs in more detail in my following articles. In so doing, I will look at a diverse range of strategies being implemented in different sectors in Tasmania, and hopefully answer whether localisation is indeed sustainable in the Tasmanian and broader Australian context.