Report finds logistics hinders Tasmanian agriculture

Insufficient supply chain infrastructure is keeping Tasmanian produce away from key markets, according to Rabobank

Report finds logistics hinders Tasmanian agriculture
Ben Larkin calls for a long-term strategy.


With almost a quarter of the available landmass in Tasmania being used for agricultural production, and a reputation for high quality, value-added produce, the local industry has a bright future ahead.

That’s the verdict of specialist agricultural financier Rabobank draws in a new report.

"Tasmania has a strong and globally competitive food and agricultural production system that is well positioned for growth, particularly in the dairy and seafood sectors," the report says.

But getting goods to market continues to hold the industry back, co-author Ben Larkin says.

"Collectively, Tasmania’s food and agriculture sector needs a long-term strategy and effective supply chain management to profitably grow the sector into the future," he notes.

The report suggests the Tasmanian Freight Equalisation Scheme (TFES) has been important in levelling the playing field between local and mainland producers, but there is still a significant price gap that Tasmanians need to overcome.

"Research published by the Productivity Commission shows it can be almost $300 more expensive to move a 20-foot container equivalent unit (TEU) from Hobart to Melbourne, relative to moving the same freight a similar distance on the mainland, even when including the TFES," it says.

Likewise, the lack of a regular international shipping service means exports have to be transported via a mainland port before heading overseas. 

This can add up to $1,500 to the cost of moving a TEU overseas, rather than a direct shipment from the island state.

A regular monthly shipment does call in at Bell Bay, but its limited capacity means most exporters have to send their freight via the port of Melbourne.

The TFES has also recently been extended to apply to export containers, in addition to domestic freight movements.

Still Rabobank warns that more needs to be done before Tasmania’s agricultural sector can reach its true potential.

The TFES is an important element in ensuring that goods can be moved from Tasmania at near-competitive prices," Rabobank suggests.

"However, more fundamental policy levers will be needed to meaningfully improve the competitiveness of the Tasmanian economy.

"It is imperative that further work is undertaken to strip costs out of the supply chain to ensure Tasmania remains a competitive and profitable agricultural producer and exporter," the report states.

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