Australian vegetable industry sentiment in decline as compliance costs top A$200mn

New research released by Ausveg has quantified the massive cost and scope of the A$213mn annual compliance, regulatory and red tape burden hampering the productivity and profitability of Australian vegetable growers and threatening the long-term viability of Australia’s vegetable industry.

The industry body launched two reports – Horticulture compliance and regulation: reducing the burden by 2030 report and the 2025 Ausveg Industry Sentiment Report – on 16 September, which revealed a continuing decline in grower confidence which it said must be urgently addressed to keep farmers farming vegetables, and ensure Australia’s future food security.

The results of the most recent Ausveg Industry Sentiment Survey from July revealed that two in five vegetable growers are actively considering leaving the industry within the next year due to challenging business conditions, and that a further two in five would follow suit if they had a viable exit strategy. The proportion of growers actively considering exiting has jumped from an average of one in three since January 2025.

The latest Industry Sentiment Report revealed a continuation of the severe operating challenges consistently identified in Ausveg’s six-monthly surveys of vegetable growers since 2023.

A lack of operating profit for capital improvement, expansion and innovation; compliance burden; input cost increases; poor retail pricing; and increased labour costs have again been identified as the key issues leading growers to contemplate their future.

These challenges are contributing to declining profitability across the industry, with 62 per cent of surveyed growers in July indicating they were financially worse off compared to 12 months ago, and 53 percent expecting to be worse off in a further year.

With the growing burden and cost of compliance regularly identified among the top productivity and profitability drains for Australian vegetable growers, Ausveg commissioned Corporate Value Associates (CVA) Australia to produce the horticulture compliance and regulation report, including a thorough examination of the current compliance and regulatory landscape in the vegetable industry, the impact on Australian vegetable growers, and recommendations to address these increasingly urgent issues.

Through the forensic examination of the operations of large and small vegetable growing businesses across the country, the report has identified that the cost of compliance across the vegetable industry is estimated at A$213mn, or 4 per cent of a vegetable growing businesses’ average operating costs. 

This equates to 42 per cent of average vegetable industry earnings before interest, taxes, depreciation and amortisation (EBITDA) of approximately 9 per cent, illustrating the significant burden of compliance on vegetable growing businesses’ productivity and profitability.

The report found that a 25 per cent reduction in compliance costs would equate to savings of approximately A$53mn per annum across the industry, representing a meaningful opportunity to improve profitability and productivity for vegetable growers across the country.

The report also identified 34 actionable recommendations aimed at reducing duplication, improving efficiency of certification and audit processes, moving towards more results-focussed compliance, and a streamlining of government processes and support services.

Ausveg is now working to urgently establish an industry taskforce to implement these recommendations as a crucial step to addressing the crisis in sentiment among the growers Australia depends on for 98 per cent of the fresh vegetables consumed in this county. 

“As sentiment in the vegetable industry has plummeted and remained at record lows, Australian vegetable growers have increasingly called out that overwhelming compliance burden is taking an unsustainable toll on their productivity, profitability and future viability, as well as their mental wellbeing. For the first time now, we have a true measure of those pressures,” said Ausveg CEO Michael Coote.

“Compliance isn’t just about government requirements, but also the raft of audit, certification and other obligations imposed by service providers, supply chain partners, retailers, regulatory bodies and industry codes of conduct. These have continued expanding in scope, volume, and complexity, leading to duplication and snowballing time and cost pressures.

“Vegetable growers accept that certain compliance is necessary, particularly around food safety and the wellbeing of consumers, employees and themselves, but with the burden of compliance now equating to an estimated 42 percent of vegetable growers’ EBITDA, it is clear that even moderate compliance efficiencies will have material productivity and profitability benefits for vegetable growers, who operate in a typically low margin, high volume industry.”

Coote said growers need to be spending less time filling in forms and doing repeated, time-consuming audits, and more time getting on with their real jobs, producing the world-class vegetables that Australians depend on.

“The warnings in our Industry Sentiment Report are clear – unless we see smarter, not harder, compliance regimes in the vegetable industry, and the key issues facing growers addressed, more and more will leave, supply will drop, and veggies will cost more for consumers,” said Coote.