The wall I refer to is the Australian processed food industry. It is being torn down by the high $A, the strategies of the two retail gorillas who are stocking shelves with housebrands, global sourcing of product, and lack of will by Australian governments and institutions of various types that inhabit the fringes of the industry.
On January 6, Heinz closed its tomato sauce plant in Victoria, transferring manufacturing to NZ. This comes on top of the Heinz closure of the beetroot plant in Brisbane, and further closures in Wagga, and a very long list of other closures by many local and multinational businesses that have occurred over the last 10 years.
Not only are we becoming just a quarry for the world, flog our minerals, and import the manufactured product, the same thing is happening to the food industry. Export the farm commodities while we still can, at commodity prices, and import the processed product.
According to the Australian Food & Grocery Council State of the Nation 2011 report, Australia is now a net importer of processed food. Can you believe that?
What happens to our rural communities, manufacturing capabilities, and innovation DNA? Without manufacturing to work with, innovation slows, and a vicious cycle of price driven commoditisation takes hold.
There is a bit of bleating going on like this post, but little useful is being done.
So, here is a short list:
- Assemble and make available a detailed database of the food industry. It is astonishing that one does not exist. Instead, there are many partial lists assembled by various industry bodies, service providers and government agencies that together would offer some real statistics to enable decisions to be based on facts, not assertions and vested interests. The first step in improvement is to clearly understand what you currently have.
- Encourage, indeed demand, a collaboration between all the various Government, industry, and research bodies that serve the industry, and reduce the wasted resources by focussing on a few priorities that are bigger than the local, and special interest issues that currently dominate. We can do far better, and spend far less with a bit of sensible strategic management of collective resources. The Federal Government is in a position to make this demand, as ultimately, they control the flow of funding. It should grow some “cohunes” and exercise some leadership for a change.
- Direct the Productivity Commission to produce a detailed industry profile to quantify the current situation, and provide a base for filling the gaps, and encouraging growth, capability development, and ultimately commercial sustainability.
- Be prepared to support sensible innovation, capability, and industry building initiatives, ones with a commercial justification, not just a political one. For example:
- Revive the Regional Food processing grant program, but have it run by commercial people with a detailed industry background, and flexible guidelines, not Canberra bound bureaucrats who measure activity not outcomes but by box-ticking.
- Reinstate trade training at regional TAFE institutions in critical capabilities, fitters, welders, electrical trades, boilermaking, and mechanical engineering.
- Rebuild sagging infrastructure, particularly rail and road/rail hubs. Road transport costs are strangling many regional manufacturing centres after the widespread and almost indiscriminate closure of regional rail lines.
- Crash through all the stupid State/Federal demarcation and duplication that stymies all of the above, and have a national approach, after all, it is a national challenge, not a state one.
Send me your policy suggestions, maybe, just maybe we can get somebody to listen.