Sharman Stone (Murray, Liberal Party) Share this | Hansard source

This is a motion about a crisis in an industry which should be leading the next manufacturing revolution. We are aware that, just as the mining booms in the 1800s faded into history, so too inevitably will the dependency on minerals extraction in the 21st century. The food-processing industry is, however, a job-creating, wealth-generating enterprise that should be sustainable in perpetuity. This motion is highlighting the struggles of fruit growers in the Goulburn and Murray valleys as they and their manufacturers, SPC Ardmona, face unfair and destructive competition from imported fruit snapped up at bargain prices by the supermarkets which have the stranglehold on Australian food retailing. This unfair competition is compounded by domestic policy failures.

Coles and Woolworths should have the finest Australian processed fruit and vegetables on their shelves. They should be proud of their offerings, and they should be trumpeting the source of their ingredients on labels which stand out large and proud on every shelf and in every freezer. Instead they boast that they aim to have some 80 per cent of their offerings in home brands on their shelves as soon as they can. The dirt-cheap imports from China, South Africa and Italy—with some products directed through New Zealand—give them contents at sometimes half the price of Australian fruits and vegetables, while our shonky labelling laws hoodwink and bamboozle the shopper, who has to guess at proportions of local product in the can or bottle when the label reads, 'Made from local and important ingredients.'

Home brands full of imported product—some dumped and all of it inadequately screened for food safety—mean even greater profits for the big two supermarkets. Coles reported a 16.3 per cent increase in pre-tax profit since 2007-08 amounting to $1.356 billion in 2011-12. Woolworths in the same period reported an increase in profits of over $2.18 billion, up 3.6 per cent in sales, with a forecast profit even higher for 2012-13. Their sales rose by 4.8 per cent. Meanwhile, the Australian Bureau of Statistics reports:

It was a mixed year for fruit production in 2011-12. Nationally … The number of bearing trees for citrus fruit fell by 9% to 6.8 million for oranges, and 20% to 1.5 million for mandarins. This decline was due to growers reducing their tree numbers or exiting the industry as a result of low domestic prices and an influx of imported fruit.

It goes on:

Nationally, production was down for a number of key vegetable crops as a result of depressed prices and/or poor seasonal conditions.

I think Coles and Woolworths need to hang their heads in shame.

The value of horticulture in the Goulburn and Murray valleys has been calculated to be some $2 billion annually at the farm gate, where the value-adding and employment multiplier effects begin. The fruit-processing industry in northern Victoria alone employs some thousands of workers, who range from growers to pickers, pruners, packers and those involved in transportation and storage of fruit, its packaging manufacturing, its cool storing, and pest management and control. Then there are the 870 full-time equivalent who work directly in the three SPC Ardmona factories at Shepparton, Mooroopna and Kyabram. Together, this huge workforce has processed on average over 150,000 tonnes of fruit and vegetables annually for this old company, SPCA, an Australian company which is now owned by Coca-Cola Amatil. It is not hard to understand that the regional city of Shepparton, the larger towns of Kyabram and Cobram, and dozens of other smaller surrounding neighbourhoods depend on the wealth generated by the world-class fruit growing that was established nearly 100 years ago in northern Victoria.

Fruit growing is a long-term business. Unlike croppers, orchardists make investments that take years to deliver return. They cannot pass higher costs on to the manufacturers or consumers. Orchardists growing processed variety fruits cannot switch their crop onto the fresh fruit markets without driving those prices below the cost of production, and that is something we saw last year. Orchardists have no choice but to meet the extremes of each season head-on, whether it is drought, hail, floods, high winds or tornadoes. Crop insurance is often prohibitive. They control pests and diseases with world's best practice regimes, which makes our fruit some of the healthiest, safest and finest eating in the world. But this pest control, whether it is biodynamic, organic or through some other means, does not come cheap.

In normal circumstances our orchards must and do react continuously to incremental changes in their circumstances and they manage their risk accordingly. However, the changes that processing fruit growers are currently experiencing—due to the high dollar; the flood of dirt-cheap imports, many of them dumped and snapped up by the duopoly of Coles and Woolworths, who have been joined by Aldi; and the exorbitantly rising costs of production that they cannot pass on—all amount to precipitous, sudden and unpredicted catastrophe, none of it of the orchards' own making and none of it the fault of the huge workforce which then takes that fruit, adds value to it and gives Australia some of the finest eating product in the world.

SPC Ardmona, now owned by Coca-Cola Amatil, once exported 30 per cent of their produce. Next year they expect to export none at all. They have just told their growers in the Goulburn and Murray valleys that they will take no fruit at all from half of their growers next year, or only half of the processed varieties they were contracted to collect. That is some 25,000 tonnes less of pears and peaches. That is an extraordinary volume, and it has been calculated that if you took that volume of fruit and spread it across the MCG, the Melbourne Cricket Ground, it would go to several metres in depth.

There is an enormous job loss already in these orchards as they receive this shocking news of the contracts being cancelled for next year. Already the permanent workforce has been reduced by some 46 per cent according to the data that has been collected from growers in a very recent survey. The annual ongoing total job loss, including casual and seasonal work, in the peach and pear orchards is estimated to be more than 1,500 workers. If this were a car industry, we would be killed in the rush of politicians wanting to have their photos taken beside men in hard hats with declarations of millions of dollars of support. There would be breast-beating about how shocking it is that Ford, Holden or maybe some other brand of Australian-made car needs support, how wonderful that vehicle is, and how Australia needs that motor vehicle industry because of its value adding, its employment and its icon status. Here we have a superb industry with magnificent product on its knees due to circumstances beyond its control.

SPC Ardmona executives are aiming to present an antidumping action request to the federal government. They want to challenge the legality of the fruit that is coming from South Africa and China and also the tomatoes from Italy. They want an antidumping action which will make it fair and put duties on those imported products to even up the playing field so that Aldi, Coles and Woolworths think twice before they bring in the vast tonnages of imported product, often now at half the price. We are also begging for a safeguard action. This is another lawful WTO measure which is used by many other nations and gives a response to a sudden, immediate, unprecipitated disaster which knocks out a local industry. If ever you want to see a disaster that was rapid in its onset and catastrophic, you need look no further than the disaster that has befallen the processed fruit industry of Australia.

We are now facing down a situation where there are thousands of people to be unemployed. Already, pruners who should be hard at work in the Golden and Murray Valleys are being turned away. Instead, people are turning on the bulldozers. If we do not have, in the very immediate short term, some $3,500 per hectare to bud over or remove the trees that no longer have any market for the fruit once taken to the factories, then the biosecurity disaster in terms of diseases in these unsprayed trees will be a catastrophe. None of us should take this lightly.

We have a four-month window of opportunity to shut down the blossom production of these trees or to bud them over to new varieties. If we cannot sell the fruit and there is no support, these trees must be bulldozed. We need the funds for that emergency right now. I beg the state government to work with the federal government to deliver that support.

We also need a comprehensive package just like the motor industry has been delivered which will give our growers an alternative way to make their living growing different varieties. These factories processing fruit need technology support so they too can better compete into the future. I commend this motion to the House. It is a crisis situation not of the people's doing.

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