Invited to Australia to speak at the Global Food Forum, 2015, I used the opportunity to try to understand agriculture issues in that country. I had arrived at the hotel an evening earlier, at 6.30 pm, to attend a reception at 7.30 pm and had to be ready for work very early the next morning. The day began at 5 am, the sky was overcast and we were off to visit the Melbourne Wholesale Fruit, Vegetable and Flower Market on Footscray Road in Melbourne, Victoria. We were very late, for the market had opened at 3:30 in the morning and the auctions were almost winding up for the day. On an average day, 400 buyers buy produce at the market.
The system was very similar to that in the Azadpur Sabzi Mandi. The technology and systems are far advanced though. Purchasers walked in groups from one seller to the next; buying and competing for fruits and vegetables. The commission charged by agents or middlemen, as we prefer to call them in India, was 15 per cent. I was surprised by this high figure but I realized that the auction was very fair and, unlike in India, there was no cartelization by the middlemen.
Fresh produce is sold and dispatched to different countries. Beijing is the big buyer, but Chinese buyers have lately started to buy directly from Australian farmers rather than go through the market. Trucks laden with farm produce had started arriving at 10:00 pm the previous night, as is usual. Most of the produce is sold in boxes. Boxes were unloaded, loaded and transported within the market on pallets by forklifts. There were 800 forklifts in the premises. Each forklift owner charged AUS$ 1-2 per pallet.
In the market place, traders paid AUS$ 350 per square metre for storage space and auction blocks, which amounts to anywhere between AUS$ 20,000 and AUS$ 60,000 per year, depending on the size of space allotted. Open space hired by farmers is available for AUS$ 2,000 per year. Farmers’ vacate the space after the auction was over and all the unsold farm produce is taken away. One million kilogrammes of fruits and vegetables are distributed to food banks free of charge every year by the market authorities. The estimated loss recorded every year is 10,000 tonnes of fruits and vegetables. The market is being moved to Epping. All permanent trading and storage blocks in the new market have been sold to traders even before the market has opened.
Finishing our quick trip to the market we hurried to the day-long conference that turned out to be a fascinating event. The Hon’ble Cabinet Minister for Agriculture and the shadow Cabinet Minister were present. Concerns were raised about Chinese investments in Australian farmland even when the investment is capped at AUS$ 15 million. One delegate said that India’s share of the world gross domestic product (GDP), currently at three per cent, would rise to 20 per cent in a few decades and it would be a huge potential market.
When it was my turn to speak, taking my cue from the discussions, I reminded them that India’s GDP was 19 per cent of the world when it got colonized and by the time it got Independence, India’s GDP was at a pitiful one per cent. I shared the Indian farmers’ concerns about import of fresh Australian fruit and vegetable produce into India and explained our confusion about the status of multilateral agreements like the WTO in view of the bi-lateral trade agreements being signed by many countries, including Australia. No one had an answer to my issues but it was still the most constructive farm conference that I have attended even though I may have come across as a pessimist to many. Personally, I would rather speak the truth than give false hopes
The conference ended at five in the evening and we drove to Shepparton and reached our destination by 9 pm. We had a working dinner discussing the next day’s hectic schedule, before going to my room at the motel where we were staying. The bottle of water in the room was priced at AUS$ 3.50 for 500 ml. It was only the next day that I found out for myself that milk was cheaper than water in Australia. How economies work confuses me.
The next day began early with a visit to the PACTUM Dairy of Australian Consolidated Milk Pty Ltd, established in 2007. This very successful venture not only owned dairies but also aggregated and processed milk. Here the quality of raw milk was considered to be the greatest asset of the dairy and the price of milk was based on parameters like fat and protein content. The cost of producing milk is between 35 cents and 40 cents a litre. Last year, the farmers had been paid 49 cents per litre. This year the price has dropped to 45 cents.
The cost of fodder had not increased but for a dairy to be profitable 60 per cent of the feed must be produced on the farm. As a rule of the thumb, the cost of feed should not be more than 50 per cent of the price of milk. A standard 500-cow farm could be managed by just four people. That would be unimaginable in India. The dairy was also making lactose free milk, AZ and protein enhancing drinks for different customers. They even had a UHT (Ultra High Temperature) plant where the lifespan of the milk increases to 10 months. Bulk buyers were in China and Indonesia.
Half of the wholesale milk price normally goes to the farmer and the milk sells in China for AUS$ 2.25 per litre that amounts to `100 per litre. This is far more than paid by Indian consumers. Milk is put for test for seven days before being allowed to be sold. This milk can be put on ships but if found unsuitable it would not be sold but destroyed. Safety, hygiene, automation and efficiency of operations saw me turn green with envy, even as farmers were struggling with low milk prices. The dairy industry was deregulated a few years ago and has grown in the golden valley. It was the best dairy I have ever seen in my life and I sincerely doubt if I will ever see a better one
The dairy visit over, we went to the Horticulture Centre of Excellence at Tatura. There were 3,375 horticulture businesses taking advantage of the centre. I guess that each farmer or factory is a called a business. Stone fruit and ‘Pink Lady’ apples were the main crop of the area and 80 per cent of the fruit is exported fresh and the area is constantly looking for new markets. Lately, unshelled almonds are becoming a major export to India.
Soil fertility is a key issue at the centre. Due to constant irrigation, drainage is a major issue. What surprised me was that they were contemplating using cow manure to tackle salinity developed due to constant irrigation and fertigation. Lunch was served at the centre. I learnt that they even advised on marketing and conducted diploma courses. I could have spent the whole day at the centre if time permitted for they were ready to patiently explain the nuances of extension services. I will remain ever grateful to them for that.
The cost of farmland can vary from AUS$ 5,000 to 20,000 per hectare. There are many Indian Sikh farmers all over Australia. The all-inclusive cost of putting a stone fruit orchard is AUS$ 80,000 per hectare. What shook me to the core were the daily wage rates being paid to labour for farm activities like picking fruit. Farm labourers were paid AUS$ 17 per hour, which amounts to `180,000 for a month of work. At those rates, millions of India would migrate to Australia as farm labour if Australia was to open migration to Indians.
After lunch we visited Plunkett Orchards, which grew stone fruit and apples. They also aggregated and packed fruit for export. They had a waxing plant, where they processed over 30,000 tonnes of produce annually. We even squeezed time to visit the legendary Jeftomson brand apples offices. They were the first to export from Australia. The pioneers of farm trade in the continent.
Returning to Melbourne in the evening along the highway, we saw an irrigation channel and waterworks, like I have never seen before. In India, rights to are connected with ownership of land. It used to be the same in Australia but now these have been separated and water has become a tradeable commodity. Farmers can buy and sell water to each other if permitted by the infrastructure that carries the water. This has allowed efficient use of water. Thereafter, farmers grow crops depending on optimum use of water unlike in India that continues to suffer.
The authority that gives the services of delivering water has been privatized. A farmer can inform the service company about his water requirement and the canal gates are automatically opened by the company to deliver the required quantity of water to his field. It is controlled by satellite communication. In India, canal water distribution is measured in terms of minutes of supply and operations are conducted manually unlike in Australia where water is measured in litres and distributed automatically. Such sophistication is unheard of in India. The take away message was that nothing is free, neither the extension services nor supply of water, everything was paid for by the farmer. It seemed to work for them very well.
On the way to Melbourne, I got a chance to see the countryside. It was a wide expanse of dry small grassland. It was my first trip to Australia and I had never seen kangaroos in the wild. I was lucky to spot a mob or troop of kangaroos in the wild, a little distance away. On the third and the last day of my whirlwind trip, I had half a free day. A history and a war buff, I chose to visit the Museum commemorating the anniversary of World War I. It was a beautiful tribute to the anguished times and sacrifices. It reminds me that troops returning from World War II to Australia were given mile by mile pieces of land to settle in Shepparton, to enable them to eke out a living. It must have been a tough life for them given that there were no canals then.
There is more to write but I will pause for the time being. I will always recall the trip as most informative and enjoyable and I put on record my appreciation of the Australians who took the time to educate us, even though as a farmer, I remain sceptical about imports of fresh fruit and vegetables from Down Under. Thank you Australia!