5. The supply chain

Introduction

5.1This chapter discusses the food supply chain, in particular its vulnerabilities. It examines the lessons from the COVID-19 pandemic, issues around transport networks, the importance of distribution centres, and the special circumstances of remote communities in northern Australia. It also explores the need for a national food supply chain map to locate the production and distribution elements of the food system and identify weaknesses. This chapter then focuses on the end of the supply chain—food waste and potential solutions, including the creation of a circular economy.

Impact on the cost and availability of food

5.2Supply chains are vital to the availability and affordability of food in Australia and globally. The Department of Agriculture, Fisheries and Forestry (DAFF) observed that global food prices have increased substantially since 2020, initially because of supply chain problems associated with the COVID-19 pandemic. Poor seasons in the northern hemisphere were followed by the outbreak of war in Ukraine, leading to a surge in global food prices. DAFF noted that in Australia ‘annual food inflation has increased significantly over the last 18 months to 9% in September 2022’. The price increases ‘reflected a range of price pressures including supply chain disruptions, flooding, and increased input costs’.[1]

5.3The University of Melbourne observed that Australia’s supermarkets rely on ‘sophisticated global supply chains’ to maintain supplies of food—sourced from wherever it is seasonally available and can be distributed cost-effectively. Supermarkets also maintain ‘lean’ supply chains ‘to reduce their costs and keep food fresh’. Recent disruptions, however, have highlighted that ‘these long and complex supply chains’ have many potential points of vulnerability.[2] The University of Melbourne argued that ‘these vulnerabilities can be addressed by diversifying and decentralising food supply chains and by strengthening local and regional food supply chains’. It stated:

Resilient food supply chains are likely to be diverse – in the geographic locations that food is sourced from (global, national, regional and local sources), in the types of crops that are grown, the enterprises that we source food from (community and social enterprises, as well as commercial), the modes and routes of transport used to distribute food, and the scale of enterprises that we source food from (small and medium scale, as well as large scale). Food supply chains that are resilient to shocks and stresses are also likely to be more decentralised, with a larger number of smaller food processing and distribution centres.[3]

5.4Similar observations about supply chain vulnerability were made by the Australian Food Sovereignty Alliance (AFSA). It noted that ‘supply chain resilience and redundancy is not systemically built into the food supply chain’, and that Australia’s food supply chain is exposed to disruption from extreme weather and malicious attacks. The AFSA observed that Australian food production ‘also relies on aspects of global supply networks for inputs, such as energy, labour and agricultural supplies’; and that ‘the domestic food supply chain is vulnerable because of just-in-time processes over long physical distances across a diverse range of producers, processors, manufacturers and retailers’. These pressures will grow as climate change impacts food production in coming years.[4]

Lessons from COVID

5.5The COVID-19 pandemic had significant impacts on the supply chain, including grocery shortages, price spikes, shortages of vital inputs, labour shortages and disruptions to transport networks. One of the key players in the national food supply chain, supermarket retailer Woolworths, highlighted the impact of the pandemic on its operations—an unprecedented surge in demand over several weeks in March 2020, where virtually overnight the increase in demand ‘reflected a population of 50 million, albeit against the backdrop of a highly efficient system built to play its part in feeding 25 million Australians’.[5]

5.6The National Farmers’ Federation (NFF) noted that ‘COVID-19 severely damaged Australia’s perishable goods industry and supply chain partners’. It observed that ‘domestically we lost much of our food service market almost overnight as restaurants and cafes closed and conferences and cruises were cancelled’. In addition, ‘access to many overseas markets for our perishable goods became impossible as airfreight options evaporated’.[6]

5.7The pandemic also affected the availability of key agricultural inputs such as seed and fertiliser,[7] and farm machinery and spare parts.[8] Moreover, according to the NFF, the pandemic highlighted ‘vulnerabilities in our existing food supply chain and the market dynamics within this supply chain that keep it inherently weak and prone to disruption by future disasters, natural or otherwise’.[9]

5.8Disruptions to exports also affected the food supply chain. The closure of international markets saw the price of Tasmanian rock lobster halve, with government and industry working hard to diversify export markets.[10] Salmon Tasmania noted the impact of air freight costs on an industry where exports account for about forty per cent of production, with costs rising from ‘around $1.80 a kilogram to $5 to $7 a kilogram’. The industry welcomed ‘the Federal Government's $60 million investment in upgrades at Hobart Airport, announced last October, which means fully laden, wide-bodied aircraft can use the runway from domestic and international routes’.[11]

5.9Hort Innovation highlighted the cost of exporting fruit to the United States, with a container of citrus costing ‘up to $15,000 or even $20,000’ to get from Sunraysia to the United States. As explained by Mr Brett Fifield of Hort Innovation, ‘Australia is often at the end of the line when it comes to the required technology, shipping containers, et cetera; it is as simple as that’.[12]

5.10The University of Melbourne highlighted the impact of COVID on the availability of agricultural labour, observing that ‘the resilience of food supply chains and their capacity to deliver food security for all depends on labour availability’. The University noted that during the pandemic, ‘labour availability was a critical challenge, highlighting the fragility of food supply chains’; and that COVID transmission was ‘a significant issue in high-density food and agriculture workplaces globally’. The University also noted that ‘despite being a key input into food supply chains, much of the food industry workforce is casual, insecure and working under poor pay and conditions’.[13]

5.11The Tasmanian Government highlighted the impact of labour shortages caused by the cessation of workers coming in from overseas. The impacts of COVID-19 were particularly felt in the Tasmanian agricultural sector where the dominant workforce is seasonal workers ‘helping with fruit picking and suchlike’. The Tasmanian Government noted that unskilled and seasonal workers were still in short supply, resulting in increased production costs ‘and, in some cases, an inability to process the forecasted volume’.[14]

5.12The chicken meat industry was particularly vulnerable to the disruption of the supply chain and labour availability caused by COVID-19. Dr Mary Wu, CEO of the Australian Chicken Meat Federation, observed that with COVID ‘there was a massive risk to the continuity of that supply chain’, and that during COVID ‘the huge absenteeism rate really affected production’. Dr Wu explained:

With the chicken industry, it's a continuous process. You can't hold back chicken. They've got five to seven weeks in terms of a production cycle. It's a continuous system. You can't just turn it off at one point. You've got to keep the flow going, otherwise you'll have animal welfare issues and whatever else.[15]

5.13Dr Wu emphasised that with chicken meat it was vital ‘to make sure that the supply chain keeps flowing in order to produce that product’.[16] Ms Anne-Marie Mooney, of chicken producer Inghams, advised the Committee that it took 69 weeks to recover from a decision to stop production. She explained that the key to managing the disruption of the pandemic was educating governments about the implications of shutting down production. Ms Mooney told the Committee:

One of the roles we played very early on, when this hit, is there was significant education of both state and federal governments, when they were setting policies and decisions. It was around educating people: ‘You can’t completely shut us down if you are going to keep supermarkets open, because here are the implications.’[17]

5.14One of the keys to managing the pandemic was the engagement of the Food and Grocery Sector Group (FGSG), which was established in 2003 ‘to develop strategies and options to mitigate risk and maintain continuity of food supply in the face of all hazards’. The FGSG is one of 15 sectors under the Department of Home Affairs’ Trusted Information Sharing Network, the Australian Government’s primary engagement mechanism with industry on critical infrastructure. The FGSG consists of a range of organisations from the food and grocery sector, including peak bodies, transport and logistics, charities and all levels of government.

5.15The Department of Agriculture Fisheries and Forestry (DAFF), which provides the secretariat for the FGSG, noted that ‘the FGSG met regularly during the 2019–20 bushfire season, COVID-19 pandemic and convenes in response to natural disasters to ensure continued supply of essential goods to the Australian public’.[18] The CEO of Foodbank, Ms Brianna Casey, who is part of the FGSG, commended the work of the group in response to COVID and other crisis, stating that it was ‘a great exemplar of bringing together all of the key stakeholders’ in partnership with government.[19]

5.16DAFF indicated that the FGSG ‘worked quite effectively during COVID as well to manage some of those issues around transport access, or pallets and those sorts of things as well’;[20] while the Australian Retailers Association saw the FGSG as a potential site for collaboration ‘between government, agencies and industry to develop a national food security roadmap’.[21]

5.17Another significant initiative was the Supermarkets Taskforce, formed in March 2020 under the auspices of the Department of Home Affairs with an ACCC Authorisation which allowed collaboration between ‘retailers, and other interested parties, to share challenges and create appropriate solutions on supply chain issues with state and federal departmental representatives’. According to Woolworths:

This was a critical initiative and collaboration across the industry that assisted the sector’s ability to navigate through a period of deep uncertainty. It helped shape a cohesive industry voice to policymakers and promoted the welfare and safety of consumers and team members of Woolworths and other retailers. The ACCC Authorisation assisted significantly in these unique circumstances.[22]

Transport networks and their vulnerabilities

5.18The importance of the transport network to food security, and the vulnerability of the network to disruption, was highlighted in the evidence presented to the Committee. Ms Claire McClelland, CEO of the Australian Fresh Produce Alliance (AFPA), observed, somewhat wryly, that ‘it may be a surprise to some, but obviously the reliance of our sector on the movement of food is really critical’. Ms McClelland stated that connectivity was vital, because disruptions to logistics had a really significant impact on produce that was not shelf stable. Ms McClelland further noted that from AFPA’s perspective ‘understanding key freight routes, how we can protect them and the vulnerabilities associated with them is quite critical because, unlike the luxury of other components of the grocery sector, we're on a time sensitive movement of food’.[23]

5.19Recent supply chain disruptions were highlighted by a number of stakeholders. The Australian Food and Grocery Council observed that recent events, such as the 2019–20 bushfires and recent floods—'which destroyed crops, communication and transport infrastructure’—revealed the ‘dependency of Australia’s sophisticated food distribution system on interconnectivities with other industries’. Natural disasters, such as cyclones, floods and bushfires, could ‘lead to indiscriminate, widespread acute food insecurity across the population’.[24] The Australian Retailers Association noted that:

• Access to transport has been affected by both a labour and infrastructure shortage with increased competition for both drivers and vehicles.
• Flooding events have meant re-routing was necessary, in turn, increasing distance and travel times by road.
• Rail lines have been closed due to flooding events, putting even more pressure on road transport alternatives.[25]
  20. Using the example of a break in the east-west intercontinental railway, Mrs Tanya Barden, CEO of the Australian Food and Grocery Council, highlighted the flow-on effects of losing key transport routes:

It's not only about getting product from east to west. Once that rail line goes down or the roads go down, then we're having to take transport drivers, freight workers and vehicles off the eastern seaboard to go on very lengthy routes around. That actually then starts to leave the eastern seaboard short, which causes significant additional trouble. So that's the infrastructure piece.[26]

5.21Ms Barden observed that making road and rail infrastructure secure and reliable, ‘particularly that east-west link’, was critical.[27]

5.22The Australian Dairy Products Federation (ADPF) gave a detailed appreciation of the impact of transport disruptions on the dairy industry. It noted that ‘the past three years have provided stark evidence that food production and distribution in Australia relies heavily on both quality and reliable transport infrastructure’. Furthermore, ‘the destruction and disruption of these assets has exposed the vulnerability of our transport infrastructure in the face of extreme weather events’. The ADPF observed:

When bushfires resulted in the closure of railways in South Australia, Western Australia and Queensland dairy processors bore the costs of alternative road-based transport that at times increase above standard prices by multiples of three and four with increases above this level at certain times of the year. Time and product are lost when freight must be switched from rail to road for transport and when transport times by road double and triple on alternative routes to roads closed by floodwater. For example, one dairy processor noted a loss of $650,000 from spoiled product and needing to alternate from rail to road.[28]

5.23In early 2023, the Bureau of Infrastructure and Transport Research Economics (BITRE) released a review which identified critical road and rail supply chain routes at highest risk of failure. The review identified 65 road and rail supply chain routes as critical. Of the 52 critical road key freight routes assessed, ‘the Arnhem Highway, Gregory Development Road, South Coast Highway, Buchanan Highway, Carpentaria Highway, Central Arnhem Road, Lasseter Highway and Stuart Highway were determined to have a high or very high vulnerability rating’. The BITRE noted that ‘disruption to these routes would impact hundreds of LGAs along their length and beyond, and could result in some communities being completely cut off from essential freight using these routes’. It also observed that ‘the majority of the most vulnerable critical routes are located in the Northern Territory’.[29]

5.24Of 13 critical rail key freight routes assessed, ‘the East-West rail corridor (running through Western Australia and South Australia), New South Wales Main West Line, Queensland Great Northern Line and Queensland Western System Line were determined to have a high or very high vulnerability rating’. The review observed that ‘the breakage points assessed on these routes carry approximately 30 million tonnes of freight annually and in some cases of disruption, would be too much to practically mode shift to road’.[30]

5.25Given these potential and actual vulnerabilities, the Australian Food and Grocery Council urged that priority be given ‘to really harden our road, rail and port infrastructure’.[31] The National Retail Association urged better infrastructure for roads, trucks and cargo; and proposed an emergency plan for supply chain disruption including provision for ‘emergency vehicles, planes and marine vessels used to distribute food’.[32] The Australian Retailers Association suggested potential investment in domestic shipping ‘as an alternative to rail and road transport, particularly between Western Australia and the eastern states’.[33] The ADPF recommended that the government:

• Prioritise development of a National Rail Network Resilience Plan, to provide a cost-effective, reliable alternative to road haulage.
• Develop a National Road and Bridge Resilience Plan, to future-proof and disaster-proof vital road and bridge infrastructure including prioritised repairs of damaged roads and bridges in flood affected regions.
• Improved shipping freight services, including costs and availability (i.e., refrigerated containers), to improve certainty and reliability across the supply chain.[34]
  26. The NSW Farmers’ Association simply sought a more efficient transport network in order to reduce costs. Ms Kathryn Rankin, Acting Head of Policy and Advocacy, told the Committee:

We have varying expensive supply chain costs because we have inefficiencies in terms of our road and rail networks and access to ports. So improving and streamlining and connecting across national and state funding to deliver that connected road and rail infrastructure is critically important.[35]

Roads

5.27The critical importance of rural road transport to food security in Australia was emphasised by the Australian Livestock and Rural Transporters’ Association (ALRTA). Road transport was ‘typically the first and last link of our food supply chains, bringing vital supplies to our production centres and taking value-added produce to our markets’. The ALRTA observed that the rural supply chain and rural trucking businesses were often co-dependent— ‘that is to say that one cannot operate without the other’.[36] The ALRTA made eleven recommendations on matters such as road funding, network planning, road construction, resilient freight corridors, natural disaster repairs and heavy vehicle charges.[37] These included:

• That Australian Governments increase the proportion of road funding spent on maintenance on national, regional, rural and remote roads.
• That Australian Governments cooperate in planning and working towards improving the resilience of the Australian road freight network.[38]
  28. How critical road networks are to food security was highlighted by the Committee’s visit to Fitzroy Crossing, where the National Highway was cut when the bridge was washed out by a major flood in January 2023. The community was cut off from its traditional supply source in Broome, with fuel and food being brought in by barge. It was noted that bringing food in from the east was problematic due to quarantine requirements. While a new bridge was being constructed, completion was expected after the coming wet season in 2023–24, meaning the community was likely to be cut off again. There was limited causeway access in the meantime.
  29. Potential solutions proposed by the community included upgrading the Fitzroy Crossing airstrip, upgrading an alternative transport route in the form of the Tanami Road, and using Curtin airbase for civil defence purposes. Even then, the road between Derby and Fitzroy Crossing would remain vulnerable to flooding; while the Indigenous community at Bayula, just across the river, was regularly cut off during the wet season.
  30. The Committee for Greater Shepparton highlighted similar issues around reliance on isolated river crossings during the recent floods in Victoria. It recommended climate-proofing ‘critical freight and transport networks by building a second river crossing at Shepparton-Mooroopna to enable delivery of response and relief services, and the safe movement of people, workforce, and freight’.[39]

Rail

5.31The importance of rail transport, and the risks associated with it were highlighted by a number of stakeholders. Woolworths noted its heavy reliance on the rail system for its operations, stating:

We use four key food and grocery rail networks. There is east-west, of course. We are a heavy user of the east-west rail network connecting the eastern seaboard with Western Australia. There is also South Australia to Darwin, from Adelaide to the NT. We are a user of that rail corridor. Melbourne to Brisbane is not as heavy. There is a more balanced mix of freight moving on road and on rail on that corridor. Nevertheless, we are still a large user of the Melbourne to Brisbane corridor.[40]

5.32Prior to the disruption of the east-west transcontinental line in January and February 2022, Woolworths moved around 80% of what they brought in from interstate to Western Australia by rail. The scale of the disruption includes a range of factors, including:

• The sheer scale of flood damage, which lengthened the duration of the outage to more than three weeks;
• Surge buying triggered by the anticipated reopening of the WA border at that time (later delayed);
• Significant pressure on transport networks due to absenteeism on the eastern seaboard; and
• Floods in South Australia which concurrently saw a lengthy outage of the main train line and major road connection to Darwin (requiring a re-routing of deliveries into the NT via a route through NSW and QLD).[41]
  33. In light of this, Woolworths recommended:
• Continued support of government for Coastal Sea Freight between the eastern states and WA, to ensure shipping continues to be a viable alternative mode to rail
• Consideration be given to expanding the use of Australia’s Strategic Fleet to assist with shipping essential food and grocery supplies, in the event of further significant disruption.
• State Governments consider the ability to receive deliveries via road trains (double or triple) closer to major metropolitan centres, particularly in times of major truck driver and food and grocery shortages – rather than having to transfer onto smaller trucks, or break into smaller combinations, on the outskirts of these centres.
• Infrastructure Australia should commit to undertaking a full review of the investment required to improve rail freight resilience in light of increasingly severe weather events, to guide the Federal Government in making funding decisions in the years ahead.[42]
  34. A key element of Woolworth’s recommendations was ‘improving investment in our rail infrastructure’.[43] Likewise, the Australian Retailers Association proposed ‘further investment in rail infrastructure to build resilience and minimise interruptions to freight services due to flooding and other adverse weather events’.[44]
  35. Disruption to the east-west rail was also an issue for the Australian Food and Grocery Council (AFGC). In a survey of members, ‘81% of respondents advised that the key routes adversely impacting their business were the ones going to/from the East Coast to Western Australia’. There were delays, on average, of 9.5 days in the distribution and supply of perishable products as a result of weather disruptions on the east-west rail line. Road freight alternatives added significant costs ‘due to a shortage of available drivers, increased fuel costs, and added demand’. The survey indicated that year-on-year, there had been a 77.9% increase in road freight costs.[45]
  36. Viterra’s submission highlighted the importance of an efficient rail system for the grain supply chain on the Eyre Peninsula. Viterra noted that underinvestment in the rail network had made road transport more cost-effective. It sought government investment in rail so that the movement of grain could be shifted from road to rail. In return, it would commit to the upgrading of loading facilities and the transport of a proportion of its grain by rail.[46] The benefits identified by Viterra included:
• assisting growers to achieve up to $45 million in premium per year for their grain by exporting in the first half of the year, prior to the commencement of the Northern Hemisphere harvest;
• up to a 25 per cent reduction in freight costs, with those savings passed directly back to growers, around $5 million annually;
• removal of approximately 43,000 truck movements between up-country storage facilities and Port Lincoln; and
• a reduction of approximately 20,000 tonnes of CO2 emissions per annum.[47]
  37. Grain Trade Australia also supported increased investment in the rail network. Mr Pat O’Shannassy, CEO of Grain Trade Australia, observed that, ‘in terms of efficiency, if we do produce crops like we've produced in the last three years and we're looking at exporting that, our answer to efficiency in that sense is in the rail network’. But Mr O’Shannassy also noted that ‘rail is not a risk-free proposition’:

There are a lot of fixed costs in rail. The risks around that need to be worked out, because we find that in drought years the owners of the rail assets, as it were—the trains—and the people who have commitments in that end up paying a lot of money without the extra throughput that they're getting in a big year. So we've got to balance out what is the right level of asset—optimising that. The other piece around that is that drivers for trains is as much an issue as for trucks—in a sense more, because of the training and requirements that drivers need to have to become accredited on a particular rail line. And we find in the grains industry also there's a lot of competition for those drivers with mining and so forth—so working that out.[48]

Ports

5.38The evidence presented to the Committee highlighted the importance of ports to the food supply chain. The AFGC observed that ‘ports are a part of Australia’s critical infrastructure, and their efficient operation is important for maintaining Australia’s food security’. The submission stated that ‘Australian container ports were relatively inefficient and below international best practices’. The main causes for delays were the sheer volume of goods stretching port capacity, the availability of food grade shipping containers, and delays in conducting biosecurity inspections and processing documentation. The AFGC recommended that the government review port operations ‘to assess current levels of performance, to identify opportunities for improvements and make recommendations which will minimise cross-border delays whilst maintaining high standards of border protection’.[49]

5.39Grain Trade Australia advised that the bulk export of grain was greater than ever, and that where bottlenecks occurred it was in ‘getting the grain to the port, which is a transport infrastructure issue’. On the other hand, container exports were a concern—'our members are very clear about the increasing costs that they're getting through stevedore charges—they scratch their heads as to “Why are we getting these costs?”'.

5.40Similar concerns were raised by Grain Growers Limited. Both supported the Productivity Commission recommendation calling for the repeal of Part X of the Competition and Consumer Act. Part X regulates international liner shipping of cargo to and from Australia, and allows shipping lines ‘to cooperate on ship use, schedules (timetables), containers, use of terminals and freight rates’ through registered agreements. They also supported the Productivity Commission recommendation calling for the development of a mandatory container terminal operator code that would be administered and enforced by the Australian Competition and Consumer Commission (ACCC).[50]

5.41CBH Group highlighted the link between port infrastructure and transport infrastructure in the handling of grain. Western Australia produces a substantial grain surplus every year, providing domestic security and export opportunities into overseas markets. Investment in new infrastructure is necessary to meet export demand in a timely way. CBH advised that ‘the most critical challenge for the industry is to significantly increase the tonnes-to-port capacity of the supply chain from its current level’. It observed that ongoing investment in the supply chain by both government and industry was critical— ‘particularly in rail out-loading projects that increases export capacity, as well as road infrastructure to complement and increase flexibility of the freight task to port and from farm gate’. CBH noted that it was currently investing in increasing permanent storage capacity, additional rolling stock and port upgrades ‘to enable the WA grain supply chain to get more tonnes to port, and meet the international demand for our grain’.[51]

5.42Viterra made similar observations with regard to South Australia, calling for ‘a focus on road and rail infrastructure that supports the existing grain ports in South Australia’. It stated that ‘there is currently excessive grain port capacity in South Australia, and supporting current infrastructure will prevent underutilisation of ports’.[52] Viterra also called for the removal of the mandatory port code. The code was introduced to assist the transition of the industry following the abolition of the single wheat desk. Viterra argued that the transition was now complete, observing that the code operated unequally—of 32 grain ports only seven were not exempt and four of those were in South Australia.[53] According to Viterra:

The key part of that regulation is that it governs the access to port capacity. We have 19 exporters coming to use our system, and we have rules that have to be approved by the ACCC before we can provide services to those exporters. If they want us to change how we provide services, we actually have to go back to the ACCC and say, 'This has been requested by industry,' and they will go out and have a public consultation around that. We can be looking at a 12-month wait for a change, which is something that should be able to be done over the phone. That is where we're disadvantaging ourselves in the global marketplace as well, because other countries don't have this sort of regulation, and we're competing against those other countries where it's easier to do business at the ports. For us, that's a real key. We think it's outdated. It has done its time. There's always competition legislation so that if someone does the wrong thing the ACCC can step in and use the competition legislation to take action.[54]

Distribution Centres

5.43Distribution centres—where goods from suppliers are concentrated for distribution to retailers—are a key part of the supply chain. Their size and location can determine the availability of goods, with centralisation promoting efficiency, but also increasing vulnerability when supply chains are disrupted.

5.44Woolworths provided the Committee with an overview of its distribution network, which consists of 23 distribution centres nationally. It advised that the continuous operation of the distribution centres ‘is important for the distribution of food and groceries across each state and territory, as reflected during the COVID-19 pandemic’, and that the distribution centres are ‘critical nodes in the Woolworths’ supply chain’.

5.45In October 2020, Woolworths opened a newly upgraded Townsville Regional Distribution Centre, ‘which was directly designed to underpin resilient food supply in North Queensland, in light of significant flood events’. This would play ‘a key role in servicing stores from Sarina to Weipa all year round, and adding contingency support during the wet season’.[55] With inventory in three locations in north Queensland—Mackay, Townsville and Cairns—Woolworths was able to deliver into the communities from each of those centres when transport routes were cut.[56] Mr Paul Harker, Chief Commercial Officer, Woolworths Supermarkets, observed:

When it comes to Townsville, for example, we do hold a lot of reserves of essential things that would be needed if a cyclone occurred or the roads got cut. We increase the essential stock holding both in stores and in offsite storage, be it long life milk, canned vegetables, even batteries and clean-up equipment and stuff. So we do that. It is something we have been leaning into.[57]

5.46Mr Harker noted, however, that Woolworths was not ‘looking at an actual distribution centre in Darwin’.[58]

5.47An important consideration when looking at the distribution network is that it is ‘border blind’. Mr David Stout, Director of Policy at the National Retail Association, observed that distributors ‘look at transport circumferences or transport length—let's say it's seven or eight hours in every direction—and that's in total disregard to a particular border’. For example, all the major distribution centres for northern New South Wales are located in southern Queensland. Mr Stout noted that ‘a lot of the impediments we had to food supply and distribution during COVID were the frictions between state governments and not necessarily the good work of the food distribution system’. It was, he observed ‘a national system and challenged with state limitations and consultations’.[59]

5.48The vulnerabilities inherent in this system has led to calls for a more localised distribution network with shorter supply chains. The Menzies Centre for Health Governance argued that ‘shortening supply chains and increasing diversity could build resilience and help deliver fresher produce to consumers’. It observed that ‘this would require investments such as in regional transport, stable power/energy distribution, and food hub infrastructure’.[60] It proposed creating:

… funding schemes and legislative frameworks that support innovative, localised models for food distribution and supply that directly or more directly connect growers and consumers (e.g., food hubs, community-supported agricultural schemes, urban market gardens and farms, farmgate stalls, open-source online platforms that create online marketplaces).[61]

5.49The University of Melbourne proposed establishing an investment fund ‘to invest in local and regional food processing and distribution appropriate for small-medium scale enterprises, with a focus on shared infrastructure that is accessible to multiple enterprises’. It also proposed funding ‘small-medium scale enterprises to develop and scale models for decentralised logistics and marketing schemes that promote resilient, sustainable, healthy and equitable food systems’.[62]

The Top End

5.50Food distribution in the Top End presents a set of challenges all of its own. Mr Philip Hausler, representing the Northern Territory Government, explained:

You've all seen a map of the Northern Territory. We have a road and a railway network straight down the middle—north-south—and then we have the Barkly Tablelands, which link us to Queensland, and the Victoria Highway, which links us to Western Australia. The key transport routes are from Queensland and from South Australia. We have seen not just COVID but also significant rainfall events in Central Australia, which have cut the railway network and the road network, and that has impacted on food supply in Darwin, Katherine and, also, quite likely, Kununurra. In terms of significant pinch points, north of Three Ways there's one road to Darwin, and we have seen that cut at various times as well. We have limited throughput through the Darwin Port—product coming in. Our supermarkets are supplied through the southern states and that road and rail network that I just talked about.[63]

5.51The challenges in East Arnhem (EA) were even more daunting. The Miwatj Health Aboriginal Corporation observed:

As well as impacting the range, shelf life, and quality of fresh produce, the long distance from supplier to stores and institutions in EA continues to be a great financial burden. Barge costs have been cited at $183.10 per cubic meter. During Miwatj lead community consultation, a school in one community reported to face a $1000 charge per delivery to supply food for the School Nutrition Program. In this program, the government funds wages for canteen staff, though the cost of food is meant to be paid from parent contributions. Freight, however, significantly adds to these costs with limited options to source food from closer distributors, stores and institutions have no choice but to use this costly supply pathway.[64]

5.52Consumers also faced significant challenges with cost and accessibility. Miwatj explained:

Woolworths in Nhulunbuy is the only major supermarket in EA. Whilst Nhulunbuy may be accessible to some in nearby communities, it is difficult for those without access to a vehicle, and a costly journey for those who live further away. Those living in surrounding homelands face the choice to spend up to $600 to get a taxi into Nhulunbuy where they can access a wider range of products at a cheaper price than the stores in their community might offer, or pay for expensive groceries, neither which offer any relief of food insecurity. Some communities, particularly homelands, have no store and are forced to make this expensive journey to purchase food.[65]

5.53Other challenges included ‘a lack of suitable roads throughout remote EA’, with communities cut off during the wet season and stores forced to use charter aircraft to deliver goods. Homelands were cut off from nearby communities, with people relocating ‘to stay with family during the wet season so they can continue to access the store’. Miwatj noted that while there were plans to upgrade the central Arnhem highway, ‘many roads leading to communities are unsealed and inappropriate for large trucks delivering pallets of food’. It argued that ‘consideration and investment must be made to the state of roads that may provide key access routes to regions within EA’.[66]

5.54Miwatj observed that a government subsidy on freight to remote communities would lessen the burden, though it cautioned that any subsidy must reduce prices to consumers. It noted that ‘recommendations for freight subsidies were included in the 2009 Inquiry into Remote Aboriginal and Torres Strait Islander Community Stores, as well as the 2010 AMSANT Food Summit and remain unactioned in the Northern Territory’.[67] Miwatj also suggested that ‘investment and support from government for suppliers to create decentralised distribution centres closer to EA may enable stores to purchase and sell food at lower prices’, and that this in turn could ‘increase the viability of small homeland stores that typically struggle to secure funding yet provide an essential service for their communities’. Miwatj cited the example of Laynhapuy Health increasing access and affordability of food with three non-for-profit homeland community stores, ‘saving community members a $1300 round trip to Nhulunbuy’. It noted that the Australian Government had ‘committed the NIAA to work with wholesalers and support the creation of local distribution centres’.[68]

Mapping the supply chain

5.55The need to map the supply chain was emphasised by a number of stakeholders. The Australian Fresh Produce Alliance argued that ‘in order to support food security, government must map industry’s supply chains to ensure that in the event of significant disruption, key inputs will continue to be available to produce food’.[69] It recommended that the Australian Government ‘undertake a detailed mapping exercise of key supply chain inputs and, with this information, create a program of work and investments to build a more resilient supply-chain, including through domestic capability improvements’.[70]

5.56The National Food Supply Chain Alliance observed that there were many existing and emerging threats to Australia’s food security, as well as its ability to contribute to global food security. Many of these threats, ‘including future risks and vulnerabilities, could be identified through comprehensive supply chain risk mapping’.[71] Undertaking some form of mapping process and gathering better data ‘about the food system, our supply chains, our freight and logistics networks and where potential vulnerabilities might lie’ was a priority—identifying pinch points, such as ‘the next AdBlue crisis’ or the impact of ‘the next train derailment which severs food supplies into communities’.[72]

5.57Mr Richard Forbes, CEO of Independent Food Distributors Australia, cited an example where seemingly disparate activities intersected, with consequences for the food security of different sections of the community:

Can I give you an example of that. Our members that are family-owned warehouse owners provide food to the $57 billion food service hospitality sector, which was shut down basically during COVID. But they also provide food to 20,000 institutional facilities. Who are they: public and private hospitals, nursing homes, childcare centres and schools. How many within government departments and portfolios understand the role of those warehouse owners in keeping food up to the sick, the frail and the elderly when an event occurs? I think that's part of the mapping process—to understand all the different stakeholders and to map out where all the IGAs are in small communities around Australia, where the Woollies and Coles outlets are and so on and so forth.[73]

5.58When asked who should lead the mapping process, Mr Forbes suggested it be industry led, ‘because that's where the expertise and supply chain lies’. He suggested that the Food and Grocery Sector Forum could develop a framework.[74]

5.59Mr David Stout, Director of Policy at the National Retail Association, observed that much of the information about food production and distribution was already available. Mr Stout suggested that to begin with a simple appreciation of where vital assets are located and where vulnerabilities existed would be the place to start. He explained:

I don't think we have to have a forensic assessment, especially on day one. We need to know where the abattoirs are. We need to know where the distribution centres are. Then we would probably work backwards from that, so you know that if you close the border at Queensland that there's no food supply from the border down through Tamworth, out to Coffs Harbour and probably further south to maybe Grafton.[75]

5.60The NSW Farmers’ Association also observed that much of the data required was already available—such as annual livestock returns—it was a matter of ‘finding the information that's already out there and managing to consolidate it’.[76] It was important, however, that the data be accurate and timely.[77]

5.61Dr Patrick Hone, Managing Director of the Fisheries Research and Development Corporation, identified the lack of supply chain data as a significant problem, observing that ‘it's very hard to make decisions on supply chains when you're lacking good quality data to make informed decisions’.[78] He believed it important that governments ‘invest in baseline information that informs people’, including ‘making that data transparent and easy to access’.[79]

Food Waste

5.62Australia has a significant food waste problem. CSIRO observed that:

Agriculture, food loss and waste are pervasive issues in Australia’s food systems. Australia’s industrialised model of agriculture follows a linear model of non-renewable inputs and resources lost to waste. It is a system that has partially delivered food security but is increasingly imperilled by the environmental and social harms it causes.[80]

5.63According to CSIRO ‘approximately 28 million tonnes of agricultural and fisheries waste are generated each year, accounting for over 65 percent of Australia’s organic waste production’.[81]

5.64Research has estimated that 7.6 million tonnes of food is lost or wasted in Australia each year with an economic cost of $36.6 billion. This waste represents 3.5% of national greenhouse gas emissions and ‘increases the water footprint of every Australian by 170% and utilises a landmass greater than Victoria to grow food that is then wasted’. Of this waste:

• 22% occurs in primary production
• 17% in processing
• 3% in distribution
• 7% at wholesale or retail
• 32% in households
• 16% in hospitality
• 3% in institutions.[82]
  65. At a national level, horticulture accounts for about one-third of all food waste, with losses of 7–10% at the production level, 11–12% at the processing/packing stages and 22–25% after processing or packaging. One-third of production ‘was forcibly discarded from the marketing system due to cosmetic standards’. Horticulture constitutes two thirds of on-farm losses, 80% of which is edible.[83] Only 0.2% of Australia’s surplus food is rescued, the bulk goes to landfill.[84]
  66. OzHarvest observed that gaps in the cold chain were a significant source of food waste, with 18-22% of total fruit and vegetable production being lost ‘to poor cold chain infrastructure and education’. OzHarvest noted that ‘Australia’s cold chain is complicated, with multiple links from farmer to consumer and frequent gaps, while the journey is characterised by varying extreme temperatures, long distances, and human error’. The outcome was ‘an expensive loss, that greatly impacts the country’s food security’.[85]
  67. OzHarvest also highlighted the problem of household food waste, noting that household waste makes up one third of food waste in Australia—70% of which was edible and 73% of which ended up in landfill. In 2021, this represented a cost per household of $2,000–2,500 each year. OzHarvest observed that ‘considering the inflationary pressures we have seen over the past 6 months, this is most likely now a higher number’. It argued that ‘tackling food waste produced at the household level is critical to tackling Australia’s food waste problem’.[86]

Packaging

5.68Another aspect of food waste is packaging. Evidence presented to the Committee highlighted the complex interrelationship between food, packaging and the environment. The Australian Fresh Produce Alliance (AFPA) recognised public concern ‘about the level and type of plastic packaging that is used for fresh produce’; but observed that ‘there are practical reasons for using packaging for certain fresh produce, whether it be to ensure product integrity in the supply chain, extend shelf life and/or avoid food waste’. These were ‘significant environmental and social benefits’.[87]

5.69Ms Claire McClelland, AFPA CEO, suggested that rather than ‘maligning plastic, we need to talk about functionality and that perhaps that plastic and packaging supports a functionality that supports a health outcome’. [88]

5.70Mr Michael Toby, of Costa Group, explained that multiple fresh produce items rely on ‘recycled plastic packaging because it is the most effective way to ensure shelf life, quality, and longevity’. Mr Toby argued that ‘by trying to do away with packaging for fresh produce, including plastic packaging, you are going to create an even bigger problem, and that is food wasted and landfill, and food waste from landfill mainly emits methane gas’. Mr Toby indicated that such an outcome might conflict with ‘the decarbonisation plans that the government is talking about for agriculture and industry’.[89]

5.71In a similar vein, the National Retail Association asserted that there was a false comparison between renewable packaging and recyclable packaging. Mr David Stout, Director of Policy at the National Retail Association, explained:

The push in this country to remove a lot of plastic packaging and reduce the amount of things given away, littered, has been admirable, but there have also been some perverse outcomes. I would probably consider the one that you mentioned, paper bags, a perverse outcome, because it isn't a genuine recycling and long-term viable solution. There's a better circular and life-cycle analysis with rigorous plastics, the thicker plastics, because we can take them, capture and recycle them—like you would do with your water bottle, for example. The system's in place to capture those and recycle them. If they're pure LDPE or PET, the system's in place. We have a virtually closed system, because no-one likes buying any more if you've got a bootful. But, unfortunately, we've been somewhat convinced that paper is a better, more viable option. It isn't. I don't consider these things, in the long term, reusable to any extent. They're just convenient, so it's problematic.[90]

5.72Mr Matthew Cossey, CEO of CropLife Australia, provided the Committee with an example of plastic recycling through CropLife’s BagMUSTER program, which turns light-plastic bags back into virgin liquid polymer, creating a ‘genuine, full-life-cycle, closed-loop plastics management’.[91]

5.73AFPA highlighted research completed by the Royal Melbourne Institute of Technology (RMIT) which sought to ‘understand the role of packaging in minimising food waste, and maximising quality control’. The main findings were:

• Packaging of fresh produce does help to avoid and reduce food waste, by protecting the integrity of the product in the supply chain.
• Packaging increases and extends produce shelf life from farm to fork compared to having no packaging at all.
• Packaging materials and packaging formats should work synergistically to provide product protection and shelf life as it travels through the supply chain.
  74. AFPA was committed to measures to minimise packaging waste, including:
• Ensuring that the role of packaging is focused on providing consumers with freshly grown, healthy and nutritious food, and minimising food waste.
• Removing any non-functional or surplus packaging by designing it for optimal efficiency to maintain product freshness and maximising the availability of nutritious food.
• Reducing the amount of packaging through the broader supply chain, and working toward developing a circular economy for packaging (where current packaging is recycled into new packaging) including recycled content.
• Working with industry, suppliers, recyclers, and retailers to deliver outcomes, and encouraging the development of environmentally sustainable packaging.
  75. AFPA highlighted the ‘recent breakdown of soft plastic recycling scheme operated by REDcycle’ as demonstrating that more needs to be done to support recycling in Australia.[92] It noted that from their perspective, the broader conversation was about the lack of recycling infrastructure— the 'complete absence in this country of soft plastics recycling’. What was required was recycling infrastructure rather than ‘tinkering around on the edges and changing packaging formats’.[93] AFPA recommended that:

Government recognise that environmental objectives and ambitions, whilst widely supported and progressed by industry, need to be considered alongside Australia’s food security and the industry’s ongoing ability to produce fruit and vegetables in a strained commercial environment.[94]

Potential solutions

5.76A number of organisations proposed solutions to the problem of food waste. CSIRO identified a number of avenues for making better use of food waste, including using transformative technologies to turn food waste into food, animal feed, and biomaterials. Higher value uses of food waste included plant-based protein, oils, fibre, and nutraceuticals.[95] Other options included bioenergy production and fertilisers.[96]

5.77Fight Food Waste Limited observed that with half of all food lost across the supply chain being at pre-consumer stages, ‘a systems perspective, more robust production procedures, and policies that foster fair trading arrangements and provide tax incentives for food donation’ would ‘reduce food waste and increase food security’. It recommended the development of a national food strategy, triennial reviews of food waste based on the 2021 assessment undertaken by Food Innovation Australia Limited (FIAL); and removing regulatory barriers to improving food utilisation and access. The food strategy would include:

• Actions targeted to address food insecurity.
• Alternative approaches to food production, including upcycling.
• A review of requisite infrastructure to improve the supply chain, particularly for chilled products and opportunities for regional food relief, processing and transformation hubs.
  78. Regulatory changes would include:
• Reviewing and updating national competition law and working with states and territories to foster fair trading practices along the supply chain from farms to retail.
• Implementing tax changes to create incentives to donate food and related services (see below).[97]
  79. The Food Waste Tax Incentive, developed by KPMG in conjunction with the Fight Food Waste Cooperative Research Centre and food rescue organisations such as Foodbank, is designed to provide an incentive through the tax system for those who donate food or related services—such as freight, logistics, transport—to food relief organisations. Business with up to $20 million in aggregated turnover would be eligible to receive a refundable tax offset equal to 45% of the lesser of:
• The production costs of goods donated and related services, or
• The total market value of the goods donated and related services (at the time of donation).
  80. When accounting for the tax deduction forgone (at 25%), this leaves a net tax incentive of 20%.
  81. Businesses with an annual aggregated turnover of over $20 million would be eligible to receive a non-refundable tax credit equal to 40% of the lesser of:
• The production costs of goods donated and related services, or
• The total market value of the goods donated and related services (at the time of donation).
  82. When accounting for the tax deduction forgone (at 30%), this leaves a net tax incentive of 10%.[98]
  83. OzHarvest made a number of recommendations around reducing food waste, including:
• Developing a comprehensive food security and food systems plan which addresses food waste and food insecurity as inherently related problems. This plan would be developed with a focus on 4 action areas:

• Ensuring surplus food feeds people not landfill.
• Inspiring household behavioural change.
• Helping farmers get food off the land and onto plates.
• Putting an end to hunger in Australia.

• Encouraging a reduction in household food waste and improving food literacy through behaviour change campaigns and school education programs.
• Providing incentives for farmers, logistics companies and others to help reduce the cost burden of transporting food for donation, reducing food waste.
• Working with the cold chain industry to increase knowledge of food security issues and decrease food waste.
• Establishing regional food hubs to allow surplus food to be repurposed or donated closer to the farm gate.
• Improve data sharing across the food supply chain so it is easier to identify where surplus food is and match it with demand.
• Increasing federal funding for the food relief sector to $45m per annum in line with community need.[99]
  84. OzHarvest argued that investment in regional infrastructure—regional food hubs—which centralised ‘the collection of surplus or off-specification produce and food waste would unlock significant volumes of rescued food’. Regional hubs would also generate ‘local employment and alternative revenue streams for primary producers’, while increasing access to food relief for regional and remote communities. OzHarvest observed that ‘these communities are already extremely vulnerable, often feel forgotten and many are affected by natural disasters and climate change’.[100]
  85. OzHarvest proposed public education campaigns to prevent food waste based on ‘other memorable and generation-defining campaigns’ such as ‘sun safety (Slip Slop Slap) to anti-littering (Keep Australia Beautiful)’. Such campaigns ‘combined mass media messaging with school-based education programs that embed long-term, generational change’.[101]
  86. OzHarvest also highlighted the lack of federal funding for it and similar organisations, stating that ‘the Department of Social Services currently provides annual base funding of $1.4m for food relief to the entire sector: OzHarvest, Foodbank and Secondbite combined’.[102]
  87. Another potential remedy for reducing food waste is educating consumers on the use of ‘best before’ dates. Dr Steven Lapidge, of Fight Food Waste Limited, highlighted the distinction between ‘use-by dates’—a food safety mechanism that ‘generally provide an appropriate service’—and best before dates, that operate around stock rotation. Dr Lapidge noted that ‘more than 50 per cent of the population do not know the difference between a best-before or use-by or packed-on date; they just see a date, and, if the food is approaching that day, they automatically throw it out’. This leads to ‘a lot of extra food waste for no valid reason’. Dr Lapidge proposed ‘removing best-before dates’ where possible, noting that work was already underway to investigate this. He also noted that some of the larger retailers in the United Kingdom had already commenced removing best before dates ‘and it's been very effective’.[103]
  88. The Australian Food Sovereignty Alliance recommended that ‘the Federal Government should establish a campaign to educate consumers on “best before” dates to reduce food waste’.[104]
  89. OzHarvest highlighted their use of 'use it up' tape, ‘that helps households put a label on their shelf and then put food on that shelf that they have to use, as a visual cue’. OzHarvest found ‘that reduces food waste in households by about 40 per cent’. They observed that ‘those kinds of things, which seem a little bit gimmicky, have an impact at a household level that we think is important’.[105]

Creating the circular economy?

5.90Perhaps the ultimate solution to food waste is the creation of a circular economy—where ‘“food waste becomes valuable, affordable healthy food becomes accessible to everyone and innovation uses a regenerative approach to how food is produced, distributed and consumed”’.[106] Professor Brent Kaiser, from the University of Sydney, observed that ‘as we move towards greater use of circular economies in the industry, a lot of those food waste streams can find homes’. Professor Kaiser noted that a lot of waste streams could be used in different areas of value adding where they are not used now:

For example, if I am fermenting yeast cells and making proteins out of yeast cells for various foods, they need sources of carbohydrates or other sources of proteins to allow that process to go forward.[107]

5.91Professor Kaiser suggested creating ‘the incentives and the ability for different industries to come together so they can reutilise a lot of the waste streams and make things happen’.[108]

5.92Professor Susanne Schmidt, from the University of Queensland, highlighted the potential of waste to regenerate soils, ‘with fertiliser being recycled from waste’, as well as the potential for biofuels, ‘including ethanol production from waste products and others’.[109] Professor Schmidt noted the work being done in Europe, including converting human waste to fertiliser. She highlighted the need for government engagement and investment in this space.[110]

5.93Ms Tammi Jonas, President, Australian Food Sovereignty Alliance, stated that ‘if you have closed circular systems closer to where people are consuming the food, you actually eradicate most of your waste concerns’. Ms Jonas observed that much of the ‘waste’ being created was the result of current production systems and supply chains, while ‘perfectly edible food is being wasted’.[111]

5.94The Australian Institute of Food Science and Technology recommended that the Australian Government ‘works with industry to mitigate ways that existing Australian policies and regulations are inhibiting the Australian food system’s potential to upcycle waste and participate more fully in circular economy projects’;[112] while the National Rural Women’s Coalition urged increased investment ‘in sustainable primary production and the circular food economy’.[113] The Australian Food and Grocery Council’s vision for the future included:

A climate neutral food, beverage, and grocery manufacturing footprint by 2050 or sooner, via the accelerated integration of renewable energy solutions and reduced wastage underpinned by a thriving circular food and packaging economy.[114]

Committee comment

5.95The food supply chain is critical to food security in Australia. The Committee notes that to date the food supply chain has stood up pretty well under various stresses, such as the COVID-19 pandemic and recent weather-related disasters. The response of government and industry to the pandemic highlighted the resilience of the food system. The Food and Grocery Sector Group (FGSG) and the Supermarkets Taskforce have shown the importance of having standing arrangements for meeting crises—arrangements which it is widely agreed stood up well to the test of the pandemic. But the pandemic and recent floods have also highlighted vulnerabilities, particularly in food transport, vulnerabilities which increase as communities become more remote from the major nodes and networks of the food supply chain.

5.96Probably the most critical need for improving the resilience of the food supply chain is to map it. The mapping of the food supply chain should be a joint exercise between government and industry and should be undertaken as part of the broader planning process recommended in Chapter 2. We need to know where things are grown and in what quantity, how they are transported, where they are processed, what the major transport routes are, the main centres for the collection and distribution of product, and where transport routes are vulnerable and what happens if they are cut. The collection of comprehensive data is vital to the mapping process. The Australian Government should also consider options for technical innovation in the collection, access to and dissemination of this information and data.

5.97We also need to identify vulnerabilities in terms of inputs. The pandemic revealed the vital role that labour plays in the food supply chain; but it also brought our attention to less obvious inputs such as fuel additives and pallets. We need to know where these things come from and how we will maintain supplies when supply chains break down. We also have to consider the role of inputs such as fertiliser to plant production and grain to meat production. The chicken meat supply chain depends on reliable supplies of grain. Farmed salmon depends on fishmeal from overseas.

5.98In addition to mapping, there needs to be put in place transport resilience planning that will allow for the creation of multi-modal options for the movement of food and other supplies, the optimal location of distribution centres to cope with potential breaks in the supply chain, and the development of redundancy across transport networks. For example, the break in the east-west transcontinental railway demonstrated the importance of having access to sea freight to move supplies from east to west. The cutting of major roads by flooding in various parts of the country over the last two years has highlighted the need to develop more resilient infrastructure and alternative routes across the road network. The importance of rail to the movement of major commodities has also been highlighted by a number of stakeholders.

5.99Port regulation was another of the issues raised in the evidence. The Committee notes the support of the grains industry for Productivity Commission recommendations calling for the repeal of Part X of the Competition and Consumer Act, and the development of a mandatory container terminal operator code. The Committee agrees that on the face of it these are useful measures and should be implemented. The Committee is also conscious of Viterra’s calls for the abolition of the mandatory port code. Again, on the face of the evidence presented to the Committee this is a matter requiring consideration by government.

5.100Supply chains in the Top End are particularly fragile, easily cut and expensive to maintain. The result is a high level of food insecurity in remote communities, and higher prices for fresh produce. Solutions proposed include freight subsidies for the transport of goods to remote communities, government support for decentralised distribution centres, and support for not-for-profit community stores. The Committee believes that increased government support for the transport, storage and sale of goods in remote communities, along with other measures (see Chapter 7) has the power to alleviate much of the food insecurity in remote communities in the Top End.

5.101The Committee believes that food waste is a critical issue in this country and that it needs to be addressed as a matter of urgency. The quantity of food waste is simply unsustainable economically and environmentally. The management of food waste should be an integral part of a National Food Plan.

5.102A number of solutions to the problem of food waste have been proposed, including

• Public education to reduce household food waste.
• Repurposing food waste—for example as animal feed or processed food.
• Supporting food donation, including through tax incentives.
• Establishing regional food hubs.
• Better management of the cold chain.
• Improving data sharing across the food supply chain.
• Increasing federal funding for the food relief sector.
• Reviewing ‘best before’ dates with a view to there removal.
• Creating a circular economy.
  103. The Committee supports all of these proposals and believes they should be implemented as part of a broader strategy to eliminate food waste. In particular, the Committee supports providing a tax incentive to support the donation of food and related services by industry modelled on the Food Waste Tax Incentive developed by KPMG and the Fight Food Waste Cooperative Research Centre. This proposal would not only enable food donation, but the provision of support services, such as transport and storage.
  104. The Committee acknowledges the ongoing role of plastic packaging in food distribution and food safety. At this stage, and for the foreseeable future, plastic packaging is likely to remain indispensable to the storage and transport of fresh and processed food. However, given the environmental costs of plastic packaging, the development of a viable system for the recovery and recycling of plastic packaging is vital. This should be a priority for government and industry. In addition, the Government should, through appropriate research and development programs, support innovation in biodegradable and plant-based plastics and environmentally sustainable packaging. Government and industry should also encourage the use of reusable bags by wholesalers, retailers and consumers.
  105. The Committee supports a review of ‘best before’ and ‘use by’ dates on food, given the high levels of household food waste.
  106. The Committee also acknowledges the benefits of developing a circular economy in the food system—one in which there is little to no waste as everything is fed back into the system in a productive way. The Committee therefore recommends support and funding for research focused on the development of a circular food economy.

5.107The Committee recommends that as part of the development of a National Food Plan, the Australian Government coordinate with industry in the development of a National Food Supply Chain Map, identifying:

• where products are grown or produced and in what quantity;
• how they are transported;
• where they are processed;
• what the major transport routes are;
• the main centres for the collection and distribution of product;
• where transport routes are vulnerable; and
• what happens if they are cut.

This map should also identify key inputs and vulnerabilities to lack of supply.

The Australian Government should consider options for technical innovation in the collection, access to and dissemination of this information and data.

5.108The Committee recommends that as part of the development of a National Food Plan, the Australian Government develop a transport resilience plan focussed on food security, including the optimal location of distribution centres.

5.109The Committee recommends that the Australian Government implement the recommendations of the Productivity Commission calling for the repeal of Part X of the Competition and Consumer Act 2010 and the development of a mandatory container terminal operator code.

5.110The Committee recommends that the Australian Government review the mandatory port code covering grain ports.

5.111The Committee recommends that the Australian Government incorporate measures to eliminate food waste into the proposed National Food Plan, including:

• A national public education campaign aimed at the elimination of household food waste.
• Repurposing food waste—for example as animal feed or processed food.
• Supporting food donation.
• Establishing regional food hubs.
• Better management of the cold chain.
• Improving data sharing across the food supply chain.
• Increasing federal funding for the food relief sector.
• Creating a circular economy.

5.112The Committee recommends that the Australian Government provide an incentive through the tax system for those who donate food or related services, based on the Food Waste Tax Incentive developed by KPMG and the Fight Food Waste Cooperative Research Centre.

5.113The Committee recommends that the Australian Government work with industry to develop a viable system for the recovery and recycling of plastic packaging.

5.114The Committee recommends that the Australian Government, in conjunction with the food industry, review the application of ‘best before’ and ‘use by’ dates on food, and consider the use of QR codes on packaging to provide relevant information to consumers.

5.115The Committee recommends that the Australian Government develop and fund a research program focussed on the development of a circular food economy.

Footnotes

[1]Department of Agriculture, Fisheries and Forestry, Submission 116, p. 16.

[2]University of Melbourne, Submission 34, p. 7.

[3]University of Melbourne, Submission 34, p. 9.

[4]Australian Food Sovereignty Alliance, Submission 147, p. 54.

[5]Woolworths Group, Submission 139, p. 10.

[6]National Farmers’ Federation, Submission 103, p. 20.

[7]National Farmers’ Federation, Submission 103, p. 14.

[8]National Farmers’ Federation, Submission 103, p. 15.

[9]National Farmers’ Federation, Submission 103, p. 20.

[10]Ms Jenna Cairney, Acting Deputy Secretary, Business and Jobs, Department of State Growth, Tasmania, & Mr Jordan Szmekura, Director, Trade, Development and Marketing, Trade and International Relations Unit, Business and Trade Tasmania, Department of State Growth, Tasmania, Committee Hansard, 12 April 2023, p. 4.

[11]Mr Lyall Howard, Chairman, Salmon Tasmania, Committee Hansard, 12 April 2023, p. 10.

[12]Mr Brett Fifield, Chief Executive Officer, Hort Innovation, Committee Hansard, 23 June 2023, p. 13.

[13]University of Melbourne, Submission 34, p. 6.

[14]Ms Jenna Cairney, Acting Deputy Secretary, Business and Jobs, Department of State Growth, Tasmania, Committee Hansard, 12 April 2023, p. 2

[15]Dr Mary Wu, Chief Executive Officer, Australian Chicken Meat Federation, Committee Hansard, 2 June 2023, p. 3.

[16]Dr Mary Wu, Chief Executive Officer, Australian Chicken Meat Federation, Committee Hansard, 2 June 2023, p. 3.

[17]Ms Anne-Marie Mooney, Chief Operations Officer, Inghams Enterprises Pty Ltd, Committee Hansard, 23 June 2023, p. 17.

[18]Department of Agriculture, Fisheries and Forestry, Submission 116, p. 18.

[19]Ms Brianna Casey, Chief Executive Officer, Foodbank Australia, Committee Hansard, 23 June 2023, p. 6.

[20]Mr Paul Denny, Assistant Secretary, Food, Agricultural Policy Division, Department of Agriculture, Fisheries and Forestry, Committee Hansard, 30 November 2022, p. 6.

[21]Australian Retailers Association, Submission 140, p. 3.

[22]Woolworths Group, Submission 139, p. 11.

[23]Ms Claire McClelland, Chief Executive Officer, Australian Fresh Produce Alliance, Committee Hansard, 26 May 2023, p. 15.

[24]Australian Food and Grocery Council, Submission 128, p. 11.

[25]Australian Retailers Association, Submission 140, p. 2.

[26]Mrs Tanya Barden, CEO, Australian Food and Grocery Council, Committee Hansard, 24 March 2023, p. 36.

[27]Mrs Tanya Barden, CEO, Australian Food and Grocery Council, Committee Hansard, 24 March 2023, p. 36.

[28]Australian Dairy Products Federation, Submission 136, p. 32.

[29]Bureau of Infrastructure and Transport Research Economics (BITRE), Road and Rail Supply Chain Resilience Review, 2023, BITRE, Canberra ACT, p. 12.

[30]Bureau of Infrastructure and Transport Research Economics (BITRE), Road and Rail Supply Chain Resilience Review, 2023, BITRE, Canberra ACT, p. 12.

[31]Mrs Tanya Barden, CEO, Australian Food and Grocery Council, Committee Hansard, 24 March 2023, p. 35.

[32]National Retail Association, Submission 141, p. 2.

[33]Australian Retailers Association, Submission 140, p. 2.

[34]Australian Dairy Products Federation, Submission 136, p. 32.

[35]Ms Kathryn Rankin, Acting Head of Policy and Advocacy, NSW Farmers Association, Committee Hansard, 6 July 2023, p. 14.

[36]Australian Livestock and Rural Transporters’ Association, Submission 166, p. 1.

[37]Australian Livestock and Rural Transporters’ Association, Submission 166, Attachment 1, pp. 4–5.

[38]Australian Livestock and Rural Transporters’ Association, Submission 166, Attachment 1, p. 4.

[39]Committee for Greater Shepparton, Submission 81, Attachment 1, p. 27.

[40]Mr Chris Brooks, Director, PC3 and Transport, Primary Connect, Woolworths Group, Committee Hansard, 16 June 2023, p. 14.

[41]Woolworths Group, Submission 139, p. 12.

[42]Woolworths Group, Submission 139, p. 13.

[43]Mr Chris Brooks, Director, PC3 and Transport, Primary Connect, Woolworths Group, Committee Hansard, 16 June 2023, p. 14.

[44]Australian Retailers Association, Submission 140, p. 2.

[45]Australian Food and Grocery Council, Submission 128.1, p. 2.

[46]Viterra, Submission 122, pp. 2–3.

[47]Mr Damian Fitzgerald, Executive and General Counsel, Viterra, Committee Hansard, 20 April 2023, p. 26.

[48]Mr Pat O’Shannassy, Chief Executive Officer, Grain Trade Australia, Committee Hansard, 2 June 2023, p. 35.

[49]Australian Food and Grocery Council, Submission 128, p. 15.

[50]Mr Pat O’Shannassy, Chief Executive Officer, Grain Trade Australia, Committee Hansard, 2 June 2023, p. 36; Ms Annabel Mactier, Policy Manager, Trade and Supply Chains, GrainGrowers Ltd, Committee Hansard, 2 June 2023, p. 35; Productivity Commission 2022, Lifting productivity at Australia's container ports: between water, wharf and warehouse, Report no. 99, Canberra, pp. 17, 42.

[51]CBH Group, Submission 23.

[52]Mr Damian Fitzgerald, Executive and General Counsel, Viterra, Committee Hansard, 20 April 2023, p. 27

[53]Viterra, Submission 122, p. 5.

[54]Mr Damian Fitzgerald, Executive and General Counsel, Viterra, Committee Hansard, 20 April 2023, p. 28.

[55]Woolworths Group, Submission 139, p. 5.

[56]Mr Chris Brooks, Director, PC3 and Transport, Primary Connect, Woolworths Group, Committee Hansard, 16 June 2023, p. 14.

[57]Mr Paul Harker, Chief Commercial Officer, Woolworths Supermarkets, Woolworths Group, Committee Hansard, 16 June 2023, p. 14.

[58]Mr Paul Harker, Chief Commercial Officer, Woolworths Supermarkets, Woolworths Group, Committee Hansard, 16 June 2023, p. 14.

[59]Mr David Stout, Director of Policy, National Retail Association, Committee Hansard, 10 July 2023, p. 42.

[60]Menzies Centre for Health Governance, Submission 41, p. 7.

[61]Menzies Centre for Health Governance, Submission 41, p. 5.

[62]University of Melbourne, Submission 34, p. 2.

[63]Mr Philip Hausler, Senior Executive Director, Agriculture, Department of Industry, Tourism and Trade, Northern Territory, Committee Hansard, 27 July 2023, pp. 2–3.

[64]Miwatj Health Aboriginal Corporation, Submission 65, pp. 9–10.

[65]Miwatj Health Aboriginal Corporation, Submission 65, p. 8.

[66]Miwatj Health Aboriginal Corporation, Submission 65, pp. 8–9.

[67]Miwatj Health Aboriginal Corporation, Submission 65, pp. 9–10.

[68]Miwatj Health Aboriginal Corporation, Submission 65, pp. 8–9.

[69]Australian Fresh Produce Alliance, Submission 135, p. 3.

[70]Australian Fresh Produce Alliance, Submission 135, p. 4.

[71]National Food Supply Chain Alliance, Submission 49, p. 3.

[72]Mr Charles Thomas, General Manager, Corporate Affairs, National Farmers Federation, Committee Hansard, 8 March 2023, p. 2.

[73]Mr Richard Forbes, Chief Executive Officer, Independent Food Distributors Australia, Committee Hansard, 8 March 2023, p. 5.

[74]Mr Richard Forbes, Chief Executive Officer, Independent Food Distributors Australia, Committee Hansard, 8 March 2023, p. 5.

[75]Mr David Stout, Director of Policy, National Retail Association, Committee Hansard, 10 July 2023, p. 45.

[76]Mr John Lowe, Chair, Business, Economics and Trade Committee, NSW Farmers’ Association, Committee Hansard, 6 July 2023, p. 13.

[77]Mr Brendan O’Keeffe, Economist, NSW Farmers’ Association, Committee Hansard, 6 July 2023, pp. 13–14.

[78]Dr Patrick Hone, Managing Director, Fisheries Research and Development, Committee Hansard, 26 May 2023, pp. 3–4.

[79]Dr Patrick Hone, Managing Director, Fisheries Research and Development, Committee Hansard, 26 May 2023, pp. 3–4.

[80]CSIRO, Submission 149, p. 7.

[81]CSIRO, Submission 149, p. 7.

[82]Stop Food Waste Australia, Submission 120, p. 1.

[83]Stop Food Waste Australia, Submission 120, pp. 1–2.

[84]OzHarvest, Submission 40, p. 4.

[85]OzHarvest, Submission 40, p. 6.

[86]OzHarvest, Submission 40, p. 5.

[87]Australian Fresh Produce Alliance, Submission 135, p. 16.

[88]Ms Claire McClelland, Chief Executive Officer, Australian Fresh Produce Alliance, Committee Hansard, 26 May 2023, p. 19.

[89]Mr Michael Toby, Corporate Affairs Manager, Costa Group Holdings Ltd, Committee Hansard, 4 August 2023, p. 19.

[90]Mr David Stout, Director of Policy, National Retail Association, Committee Hansard, 10 July 2023, p. 44.

[91]Mr Matthew Cossey, Chief Executive Officer, CropLife Australia, Committee Hansard, 21 June 2023, p. 7.

[92]Australian Fresh Produce Alliance, Submission 135, pp. 16–17.

[93]Ms Claire McClelland, Chief Executive Officer, Australian Fresh Produce Alliance, Committee Hansard, 26 May 2023, p. 20.

[94]Australian Fresh Produce Alliance, Submission 135, pp. 16–17.

[95]CSIRO, Submission 149, p. 8.

[96]CSIRO, Submission 149, p. 9.

[97]Stop Food Waste Australia, Submission 120, p. 2.

[98]Foodbank, Submission 24, p. 19.

[99]OzHarvest, Submission 40, p. 2.

[100]OzHarvest, Submission 40, p. 6.

[101]OzHarvest, Submission 40, p. 5.

[102]OzHarvest, Submission 40, p. 7.

[103]Dr Steven Lapidge, Chief Executive Officer, Fight Food Waste Limited, Committee Hansard, 20 April 2023, p. 22. See also Mr Matthew Rose, Advocacy and Sustainability Lead, OzHarvest, Committee Hansard, 23 June 2023, p. 31.

[104]Australian Food Sovereignty Alliance, Submission 147, p. 35.

[105]Mr Matthew Rose, Advocacy and Sustainability Lead, OzHarvest, Committee Hansard, 23 June 2023, p. 31.

[106]National Rural Women’s Coalition, Submission 20, p. 5.

[107]Professor Brent Kaiser, Director, Sydney Institute of Agriculture, University of Sydney, Committee Hansard, 11 August 2023, pp. 14–15.

[108]Professor Brent Kaiser, Director, Sydney Institute of Agriculture, University of Sydney, Committee Hansard, 11 August 2023, pp. 14–15.

[109]Professor Susanne Schmidt, School of Agriculture and Food Sustainability, University of Queensland, Committee Hansard, 10 July 2023, pp. 15–16.

[110]Professor Susanne Schmidt, School of Agriculture and Food Sustainability, University of Queensland, Committee Hansard, 10 July 2023, p. 17.

[111]Ms Tammi Jonas, President, Australian Food Sovereignty Alliance, Committee Hansard, 11 August 2023, p. 19.

[112]Australian Institute of Food Science and Technology, Submission 85, p. 3.

[113]National Rural Women’s Coalition, Submission 20, p. 6.

[114]Australian Food and Grocery Council, Submission 128, p. 4.