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Part 2 of 3: Localised Agriculture – a Vision of the Future?


Josh Brown

By

September 25th, 2015


In part 2 of 3 on the topic of localised agriculture, Josh Brown analyses the link between local production and quality.


Having looked broadly at the dilemma of labour costs on localised farms in my previous article, one is still left wondering if localisation is worth considering. The basic farming dynamic that relies on cheap foreign labour for labour intensive practices appeared problematic because of high costs. Like I said though, I am hesitant to give up on the idea of localisation, therefore I believe it is worth digging a bit deeper – this time into ways the horticulture industry in Tasmania is making moves towards localisation.

For Tasmania, the largest horticultural crops are potatoes, carrots, and onions, with vegetables alone accounting for around 20 percent of the state’s gross agricultural production. These vegetables can be assumed to be produced through large scale cropping and harvesting however, leaving little room to localise production. Therefore, for the localisation agenda, there appear to be two alternative inroads through which industry change can begin to occur. The first involves specialist, ‘niche’, horticultural commodities, where there is limited demand for high quality produce, subject to local supply constraints. The second involves already well-established horticultural businesses which, unlike broad acre cropping, can be seen to be already experienced with labour intensive practices (like manual fruit picking and sorting), and so also, the dilemma of high labour costs.

The first situation is interesting for a number of reasons – the most obvious, of which, is the type of produce actually produced. In Tasmania, such production ranges from highly specialised ginseng used in everything from food to skincare products, through to truffles aimed at a specialised gourmet market, and everything else between. The common thread that binds these markets together however is that they are subject to limited, ‘niche’, demand – largely concentrated in export markets – and are able to access a food brand associated with quality, be that through regional, ‘Tasmanian’, or personal/commercial reputation, such as many specialty beer and wine producers. In addition to these two factors, there also needs to be an accessible market and regulatory framework through which these products can be distributed.

The second situation is similar in many ways to the first – though rather than targeting what would be considered a limited demand ‘niche’ market, the commodities produced can be seen to supply a wider commodity market with high demand and supply. Such commodities include many fruits, berries, and wines where the harvesting of the plant has been slow to automate and so still relies heavily on labour intensive practices. Like the ‘niche’ producers, the branding of the produce also remains, though the success and impact of these branding attempts vary in scale and impact on the consumer.

With these two inroads in mind, what can be said of the localisation agenda then? For the ‘niche’ market producers, limited demand, often from individual restaurants or distributors, can be seen to have naturally kept supply low – imitating regional oligopolies. This in turn results in economic profits that seem to sustain labour intensive practices. For the larger commodity producers however, labour intensive practices seem to be sustained only by tying wages to quotas, which in turn are propped up by distributor guarantees to pay certain market prices.

This leads to the question of whether a ‘localised’ shift could occur from buyers if labour intensive practices could be sustained in either of these ways. The immediate answer to this is ‘probably not of its own accord’. From a policy and producer perspective, this is the point at which the whole localisation agenda seems to come unhinged. Consumer tastes seem to be difficult to change, and when they do, it happens only very slowly, quite often through branding efforts – a point that the Tasmanian state government has not overlooked. This is likely because of the ambivalent nature of many terms in the mind of the consumer, born from information asymmetries around what quality means. The by-product of this tends to be institutional ownership of branding labels (with such phrases as ‘the Fresh Food People’ jumping to mind). Therefore, for producers and governments to institute efficient branding mechanisms, there needs to be tight regulation around labelling and quality control laws. A useful place to start could be to institute a national ecological or organic standard to try to overcome this information asymmetry. For producers, this would open up a sustainable opportunity to value add through a regional and quality branding.

That said however, branding is not the only way for consumers to directly influence production in a localised economy. A far more traditional method is through the use of farmers markets like Farm Gate in central Hobart, or Harvest in Launceston. This method tends to be the one advocated for most by the localisation agenda, as it enables consumers to come into direct contact with their food producers. Given this contact, information asymmetries around quality can be reduced, whilst providing immediate feedback into the production in Tasmania. This is an ideal situation, and one that is now being exploited by both the niche and large commodity producers as these markets rise in popularity. However, it is also incredibly time consuming for both producers and consumers, meaning attempts to normalise this behaviour on a larger scale could be difficult in the longer term.

The current situation in Tasmania is now one where there is growing interest in both local markets and localised branding, from both producers and consumers. There is still a question around sustainability, but it seems that if consumer expectations around food quality continue to rise, then feedback into the production of many horticultural goods may provide greater incentives to shift production towards the localisation agenda. As such, there needs to be a continued shift in consumer demand towards ‘quality’ or ‘local’ food – supported by competitive prices from the producers, and legitimate and clear branding legislation that encourages quality production. Should this occur, it seems possible that a sustainable localised horticultural industry may be able to flourish.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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