Jan Davis: Farmers put their hand to energy reform

Tasmanian farmers today welcomed the state government’s creation of an energy advisory body to provide input on issues of supply and pricing and how best to use the state’s energy resources to underpin and expand the economy.

Tasmanian Farmers and Graziers Association chief executive Jan Davis is a member of the new Energy Working Group, announced today by Minister for Energy Matthew Groom.

Ms Davis said agriculture was a key economic driver, a major growth sector, yet electricity pricing was a real concern for farmers, particularly in those sectors such as dairy and irrigated horticulture that involved substantial electricity consumption.

“High electricity and fuel prices have been having an impact on farm businesses for years,” she said.

“Farmers use irrigation, refrigeration, and sometimes heating to produce their products. Over the last three years, national electricity prices have increased by an average of 15 per cent a year but farmers are generally price takers and have no opportunity to recoup these increased costs by putting up their prices.

“At the same time, farming enterprises are under severe pressure to remain globally competitive.

“Nationally, the average cost of electricity for broadacre operations is between two and three per cent of operating costs. However, the cost for dairying and irrigated horticulture and cropping can be up to 10 per cent (excluding the cost of water).

“With increasing cost-price pressures on farms, margins are falling – and energy costs are becoming unsustainable.

“Farmers need greater certainty, which they are not receiving from the current process. They need to be able to plan their businesses and price jolts in the order of 15 per cent each year do not allow for that.”

Ms Davis said farmers acknowledged that electricity pricing and policy was an extremely complex area that involved numerous jurisdictions.

“Nonetheless, farmers need to see improvements to the current system of pricing and reviews and the TFGA is keen to work with the state government to achieve better outcomes,” she said.
TFGA chief executive Jan Davis