Working farmers keep prices in check

There has been much discussion recently regarding the sustained momentum that continues to drive up the price of food in Australia. Although the drought has contributed, it cannot be solely blamed for rises in our grocery prices. The factors driving prices skyward are varied, but one thing is for certain, and that is that they are not being driven up by profit increases at the farm gate.

Grocery prices, which have risen 43.6% since 1996, do not stack up when compared to a 28.8% rise in the consumer price index. Australia is the only country in the developed world where food inflation is higher than our CPI.

Organisation for Economic Co-operation and Development reports charting price rises internationally in the past 10 years have found that Australian prices rose significantly faster than other countries. When compared with the UK (11.6%), the US and Canada (about 25%) and an average of 15% in European countries, Australia's 43.6% seems vast. Over the past year, vegetable prices have risen 21.5%, cheese by 8.5%, bread by 7.9% and milk prices by 5%. It is understandable that consumers have noticed these increases.

Some commentators have blamed the drought, but this needs to be put into context. Fresh food and vegetable production has been hit hard by water shortages in Victoria but this loss is being offset to some degree by imports of domestic and international production.