Like their counterparts around the globe, Australian farmers are being crushed by increasing agricultural labor costs. To remain competitive, they are adopting smart technology and new, creative ways of doing business. Industry titans such as Jason Gatt of Sunripe have completely changed age-old farming practices to lower their labor costs. At the same time, producers such as Ray Fulcher are adopting hydroponic systems to increase production efficiencies.
Jason Gatt reports that upgrading farm machinery and integrating technology has drastically reduced labor requirements on his cherry tomato farms. His crew would previously spend an entire week preparing the ground. They might plan to install irrigation systems in order to grow only one crop over that same period. Today, with GPS-guided autonomous tractors, the same field would take a little over two days to plow. During that time, they scale an astounding 32 hectares.
Labor costs account for 51 percent of operating expenses for the most profitable farms. By investing in tailored technology, Gatt is making a long-term play for improved efficiency. People inside the industry are responding to his vision. This is even more so the case as on July 1, the Fair Work Ombudsman declared a 3.5 percent minimum wage increase in its jurisdiction, bumping their hourly wage from $24.10 to $24.95.
The Case for Automation
Jason Gatt calls automation a key to industry’s effort to drive costs down. Furthermore, his autonomous tractors make really accurate rows and measurements which makes every planting row in the field optimized. By interpreting a combination of these technologies, he hopes to maximize efficiency while controlling costs.
“Anything we can do to get labour down or get it more efficient we’re definitely working towards.” – Jason Gatt
The use of GPS-guided tractors by farmers, which has become commonplace, speaks to a bigger movement towards the digitization of agriculture. Horticulture Council executive officer, Richard Shannon, said the sharp increase in cost of doing business has hit growers particularly hard. This trend has seriously impacted their operations in the last five years. While input costs have exploded, grower returns have not kept pace, he argues.
“That’s led to a big squeeze across the industry and everyone’s feeling the pinch.” – Richard Shannon
Shannon’s experience is indicative of the hardships that all farmers are currently undergoing, with soaring market volatility and growing expenses.
Hydroponics as a Solution
Innovation has certainly been an important ingredient in Ray Fulcher’s greenhouse for figs. With hydroponics, he can have direct and precise control over the growing conditions. Fulcher beams as he shows off how everything in his greenhouse is temperature and humidity controlled, achieving the ideal environment for plants to thrive.
“It’s all temperature controlled and humidity controlled to a degree.” – Ray Fulcher
While climate control and bio-security is made easy as possible for growers, he admits, hydroponics has a steep cost. The up-front cost of building the greenhouses can go up to about $2 million, an amount out of reach for most.
“Those greenhouses when I put them in cost about $2 million and most average people can’t afford that.” – Ray Fulcher
Fulcher’s encounters illustrate the challenges of adopting new technology while being fiscally sustainable. He underscores the point that young people are discouraged from pursuing careers in agriculture. Increasingly, the difficult work environment is the biggest factor in their choice.
“To be honest probably young people don’t really like that environment that we’re in.” – Ray Fulcher
Navigating Labor Challenges
With labor costs now under a magnifying glass, farmers have turned to multiple approaches to continue farming as the tides change. Workers who fall under the Horticulture Award are able to be paid a piece rate according to their productivity. This system incentivizes them to be fast and productive in activities such as planting, picking, sorting, and packing fruit and vegetables.
Like farmers Gatt and Fulcher, we need to be vigilant in all the battles that lie ahead. Increasing labor and other variable operating costs further threaten their bottom lines. Shannon recommends that immersing yourself in the practice by visiting other farms or participating in industry tours can give you insight into the most efficient practices.
“Ideally visiting other farms, getting on an industry tour, whether that’s domestic or overseas, just to get a better idea of what their options are.” – Richard Shannon
Through innovation and adaptation, farmers are striving to create a sustainable future while managing increasing pressures from labor costs and market demands.
