Sydney-based social enterprise Good & Fugly has released its inaugural Farm to Supermarket Food Waste Report exploring farmer and supermarket relationships.
Good & Fugly’s research was produced from a study commissioned and conducted by Fifth Quadrant with 57 farmers, surveying their general observations about trends and experiences with, and attitudes towards their dealings with commercial buyers and supermarkets.
The findings of the report – which surveyed both large farmers ($500k+) and smaller farmers (<$500k) – highlighted the pressures faced by Australian farmers and the outdated nature of the supermarkets' screening systems for fruits and vegetables, also uncovering some insights into farmer profits and wider industry concerns.
Good & Fugly co-founder Richard Tourino, was intrigued to investigate the relationship between Australian farmers and supermarkets, and specifically what impact this
relationship has on food waste.
“We can see through this research that there’s a lot of produce being rejected by supermarkets purely for the way it looks and its dramatically impacting farmers’ profits.
“Collectively, if we look at the loss of profits from farmers in the report due to rejected produce and average it out across Australia’s 15,000 farmers, these losses equate to a total of $27.9 million, or roughly 13.95 million kilos of fruit and vegetables, being lost annually in Australia,” said Tourino.
Some of the key findings of the research included:
A range of concerns worrying farmers
When looking towards the future, farmers are most concerned about rising production costs, labour issues, and weather conditions.
While a quarter (25 per cent) of small farmers are concerned about produce being rejected by supermarkets, 1 in 3 (32 per cent) larger farmers cite it as a concern, ranking it above cashflow issues and lack of control over pricing.
Majority of respondents (56 per cent) agree that perfectly good produce is rejected due to cosmetic issues and the same number think making better use of imperfect produce is important to improve sustainability in the agricultural sector.
‘Appearance’ is overwhelmingly the reason supermarkets reject produce, followed by size , with farmers reporting 68 per cent of fruit and vegetable rejection from commercial buyers was due to appearance.
Fear of product rejection
The prospect of rejection by commercial buyers influences on-farm ‘self-rejection’, 51 per cent of farmers screen out good produce because they don’t think it will be accepted by commercial buyers. 1 in 5 (20 per cent) large farmers are losing more than 30 per cent of what they grow because they expect it to be rejected by supermarkets because of its appearance or size.
One in four (23 per cent) farmers report supermarkets expect them to hand over imperfect produce for free. This increases to 1 in 3 (32 per cent) for larger farmers. And overall, a staggering 81 per cent of farmers believe they are not paid a fair price for their produce. One in ten farmers (12 per cent) reported an annual loss of $50,000 or more as a result of rejected produce.
Farmers feel supermarkets are too strict on their screening of fruit and vegetables, with 40 per cent of large farmers reporting that supermarkets will reject a whole pallet over one bad apple’.
Limited options for rejected produce
37 per cent of farmers said the rejected produce can be sold to alternate buyers, but this is often at a discount. 32 per cent of farmers report that rejected produce is repurposed into other products such as marmalade and soaps.
Woolworths the top pick
Despite clear indications that the relationship between farmers and supermarkets is troubled, 40 per cent of farmers picked Woolworths as the best to deal with as a fruit & vegetable farmer.
Tourino said it wasn’t just up to farmers and supermarkets to solve this issue.
“The more consumer demand there is and uptake in eating quirky produce, or looking for new and innovative ways to utilise ‘fugly’ fruit and vegetables by local companies, the better it will be for everyone.
“We’re already seeing a surge in creative start ups tackling the food waste problem in their own ways and supporting farmers along the way. We’re urging supermarket giants to reconsider how they screen their produce and to normalise the sale of quirky looking fruits and veggies. It will be better for the environment, for farmers, and for Australian consumers,” said Tourino.