CITRUS INDUSTRY (WINDING UP) AMENDMENT BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr GOLDSWORTHY (Kavel) (16:01): I am pleased to resume my remarks that we were tracking through prior to the luncheon adjournment, and I was talking about my wife's family still living and working in the Riverland region. As the member for Chaffey pointed out previously, the vast majority of the citrus industry is located in the Riverland region. There is a small portion of the industry in and around the Murraylands region but it is my understanding that the vast majority of the citrus industry is based in and around the Riverland region.

I worked in the region in the early 1980s for the best part of three years in the banking industry and the particular corporation that I worked for had a significant proportion of clients involved in the primary production industry and, therefore, in the citrus industry. It was my observation back at that time that the primary production industry within the region ebbed and flowed. There were some producers who, if they had their production base spread across a number of commodities, were able to ride out the cycles of the industry.

If a particular producer had all their eggs in one basket, then they were subject to the cyclical nature of commodity prices and production and things like that, but it is my observation that if a primary producer had some citrus, grapes and some other plantings such as stone fruit then they could generate a reasonable level of income for themselves and their family and obviously have a flow-on effect in the local economy.

There is a considerable number of variables that impact on the economic activity of the region and, as I mentioned previously, I have witnessed that firsthand as a resident of the region, a person living and working in the region. Since that time, over the last 30-odd years, returning to the region as a visitor, going back and holidaying in the region and visiting some of my wife's relatives, I have seen the district and the region change over that period of time.

I have to say that seeing the effects of the drought over those very sad and sorry years was really a sorrowful thing to witness. You once saw flourishing orange orchards, thriving and producing for the local economy and supplying the export and domestic markets. With the effects of the drought, the water allocations were reduced as we know and the growers exited that industry and we then saw those orchards die and be pushed up into large heaps where they were just burnt.

Discussing these issues with the local member—the outstanding member for Chaffey—some of those growers were assisted through packages to exit the industry and a five-year moratorium was placed on those properties. I understand that there are two years to run on that moratorium and hopefully we will be able to see those vacant blocks of land replanted with whatever the particular property owner sees fit, to re-energise the primary production industries in the Riverland.

There was a company called Berri Fruit Juices (BFJ) and that was a significant employer of local people; some 1,100 local people were employed at BFJ. When I was working in the Riverland I had some friends who worked at BFJ, but unfortunately we have seen that business go to the wall, with some of its operations, I understand, being transferred interstate. That is an example of the changing face of industry within the Riverland region.

My wife's brother is employed by a big multinational corporation that is directly involved in the primary production industry in the region. As the member for Chaffey pointed out in his contribution, there are producers planting new varieties and implementing best practice to maximise their returns from their property. In some ways, it is similar to the apple and pear producers in my district in the Adelaide Hills whom I know quite well, where some of the producers have at least 10 per cent of their property out of active production.

They actually remove a certain variety of apple trees and plant new varieties in an effort to meet what the market requires, not only domestically but overseas. So, some of the producers in the Adelaide Hills operate similarly to those in the Riverland region described by the member for Chaffey, in terms of a percentage of productive land being used to introduce new species and new styles of operation.

As I said, we have witnessed the severe effects and severe impacts of the drought on the economy of the Riverland. As I explained, I know some people in the Riverland and they are really a resilient group of people. They have been through tough times previously in past decades for one reason or another. They have gone through a tough time in relation to the drought but they are a resilient community in that part of the state. I know that they will overcome and are overcoming the effects of the drought and will push on into the future and continue to make the Riverland region a significant economic contributor to South Australia.

Mr VENNING (Schubert) (16:10): I rise to support the Citrus Industry (Winding up) Amendment Bill 2012 and also to repeal the Citrus Industry Act 2005. Of course, I was here when that was done and it sounded like a good idea at the time. There certainly were warring factions and we thought that by putting our efforts behind it and tying it up we would have solved it—but it certainly did not and, in fact, I think it probably made it worse.

I support removing the $3.3 million per annum burdensome cost that we imposed as compliant costs on the industry and that our citrus growers, packers, processors and wholesalers had to pay. I had much advice on this matter, particularly from a previous member of this parliament, Kent Andrew, who was the member for Chaffey some time ago. He was a valuable and hard-working member, too, incidentally and he gave us very good advice back then. He was also involved with these committees as he was a citrus grower.

The independent review set up an advisory committee (SARAC) to represent the interests of South Australia's $350 million citrus industry. Of course, I have been a member of SARAC—but a totally different organisation. I was a member of SARAC before I came in here. In fact, I resigned from SARAC to come into parliament. It was the South Australian rural advisory council, which this is, but this was a committee set up by the then minister Frank Blevins as an advisory council to him as minister, so it really has a totally different use.

I was a bit concerned about this title because it does not really mention the word 'citrus' in it; it was the South Australian rural advisory council. It rolls off the tongue and it was a very good committee back then. Certainly minister Blevins was very smart to have a committee like that which looked after not just the industry but the whole rural community. He got good advice and he chose good people to be on it—10 points for him. I was on it so he must have got it right! That was SARAC reborn in a different guise.

The committee will have a national affiliation with Citrus Australia Limited (now called CAL) and will be supported by a $1 a tonne voluntary levy via a PIF scheme, as the member for Hammond said earlier. We know all about PIF schemes because we were discussing that with the grain industry and we have a few little hiccups there. I note the SACITWP consultation meetings were chaired by the Hon. Neil Andrew, former federal Speaker, member for Wakefield and a good friend of mine. Wakefield, of course, contained most of our citrus regions.

The Hon. Neil Andrew had a very good track record. To get a consensus was a pretty fair feat because there were some warring factions here, and the members for Chaffey will certainly know that if you got in between them you knew all about it. They were not exactly a friendly lot. You might say there was competition, and there certainly was—that was fine as long as it was constructive, but it was not always. That was the reason why I think we did here what we did, so a good 10 points to the Hon. Neil Andrew for doing that.

Maybe we need him to sit on a similar committee to resolve the problems with the South Australian Farmers Federation. We really do need that right now. Citrus and horticulture are a vital part of the SAFF commodity section so there is a direct link there and we need to go further and fix this. I still have some citrus growers in my electorate of Schubert from Mannum to Swan Reach along the river. There are not a lot but there are some there. In the Barossa much of the citrus has been pulled and vines have been planted—more is the pity because I think in hindsight many of them would have been a lot better off if they had stayed with their trees and it was not altogether a smart move.

We need our citrus growers to thrive and be successful. We should be very careful not to put hurdles in their way especially by allowing imports of foreign fruit from so-called developing countries, particularly juice from Brazil.

I believe Farmers Federation problems also need to be addressed when we look at this. At the moment we are in the middle of these discussions and I am opposed to the idea of scrapping SAFF completely. As I said the other day—and the minister would know this because he was a minister for agriculture—it would be a mistake to scrap the whole thing. I would be going back 15 years and totally rewriting or amending the constitution of SAFF and bringing in levies and elections. You can fix it. To throw the whole thing away I think would be a mistake, because I do not think you will get enough consensus to make any progress with it. That is my little bit for today. I will be active. I know that the shadow minister has had a fair bit to say about this. I am very concerned with what has happened. We need our organisations to be strong right now, especially, and to see it fragmented like this is not good.

I certainly support this bill and I again thank all those who have brought this about. It is good to see unity in an industry. I particularly thank the Hon. Neil Andrew for the work he did, and the minister.

The Hon. P. CAICA (Colton—Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (16:16): I thank the opposition in both places of this parliament for the support that they have shown and the goodwill in which this matter has progressed, and I acknowledge the significant contributions made by the opposition in this place. I also thank the officers from the department who have worked so diligently on this bill, particularly in their ongoing and detailed liaisons with the citrus industry. In this regard, I thank Mr Simon Gierke, Mr John Cornish and their colleagues. Finally, I acknowledge the role of the officers and staff of the Minister for Agriculture, Food and Fisheries and thank them for the role that they have played in progressing this bill to date.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr PEDERICK: I am interested in the discussion about the dollar a tonne levy, which is agreed to. We note that this arrangement for $1 a tonne came when the citrus industry has been under considerable stress. What mechanisms are in place if the industry participants want to alter the levy—and I would say more likely upwards—noting that the member for Chaffey said that a lot of the levies have been around $3 a tonne?

The Hon. P. CAICA: As I understand it, in relation to all PIFS that exist in South Australia, there is a requirement for a management plan to be put in place. The department, along with the industry, is currently undertaking the development of that particular plan. As is custom and practice, if any variations were to be made to increase or vary the PIF contribution by growers, that would be worked out with the growers themselves and with their agreement.

Mr WHETSTONE: Touching on the dollar per tonne levy, that is calculated on a tonne rate, and there have obviously been issues of concern from industry and from myself. I understand there is a management plan that will give scope for the dollar a tonne to be changed, or increased or decreased—whatever we need to see. Rather than there being a dollar a tonne levy, was any consideration given to a contribution per hectare so that we would get a steady income stream? Obviously we note that seasonally within the citrus industry in some years you will get half an income stream and the following year you might get a twofold income stream.

The Hon. P. CAICA: As I understand it, the Citrus Transition Working Party was the group that provided the recommendation to the minister in relation to the $1 per tonne. The Transition Working Party had representatives of industry on that and make those recommendations. So, whether or not there were internal discussions that the Transition Working Party had, or considered a hectare figure, I am not aware. All I know is that the recommendation that was made to the minister was for $1 per tonne.

Mr WHETSTONE: Just following on from that, in terms of the $1 a tonne, we are looking at about a 150 tonne crop over a five-year average, or thereabouts; it equates to 150,000. In terms of administering SARAC—the running costs, employing a liaison officer—are you able to give me a breakdown of exactly what sort of funds will be left to address any of the issues that the industry will incur along its travels through this transition period?

The Hon. P. CAICA: I thank the honourable member for his question. I am advised there is a breakdown in the report that has been compiled by the Transition Working Party, which is attached to the PIRSA website, and that gives the breakdown. I also understand that there will be some basic costs involved within that auditing. Also, it will be up to SARAC to determine what and how the money will be apportioned beyond those basic costs that are catered for there; but the information, as I understand it at this stage, is on the website, and that will be varied at the determination of SARAC.

Mr WHETSTONE: Just a final question, minister. The $1 a tonne levy will address some of the administration. Will SARAC have to deal with all of the internal issues that need to be addressed through that $1 a tonne, or will Citrus Australia have any contribution with any unidentified costs that the industry might incur throughout the season?

The Hon. P. CAICA: I thank the honourable member for his question. As I understand it, any contribution or anything that might be provided by the federal body will be a matter for that body, that being the subject, of course, of agreements and discussions between SARAC and that particular body. The minister has made it absolutely clear that the funds collected under the PIF are to go to supporting the industry here in South Australia. I think that was supported by the industry, that those funds themselves find their way not only into the particular fund but to be spent within South Australia with the assistance of the industry. Any determination of funds that might come from the federal body will be determined by SARAC with the federal body and under the proviso of the suggestion that has been made by the minister.

Mr WHETSTONE: I keep coming to that final question. With the $1 per tonne levy, will any of that $1 be handed or used in Citrus Australia's interests or administration costs?

The Hon. P. CAICA: Again, to reinforce the comment I made earlier, the minister has certainly made it clear that her view is that the funds collected under the PIF be used and apportioned for the benefit of the South Australian citrus industry. I know that when I was the agriculture minister previously—and I probably should not go back there—there were certain views in various industries about how any money going to a federal body that is collected in South Australia would then manifest itself as benefit to South Australia. They will be ongoing discussions, I expect, but certainly the view from the government and, in particular, the minister is that those funds collected under PIF be apportioned in such a way that they are of benefit to the South Australian industry.

I would like nothing more—and I go back not just to my role as the agriculture minister but as a trade union official—than for there to be strong, national organisations that assist all components of the various industries that that national organisation represents. We know that has not always happened that way when we talk about the world of agriculture, but I hope that one day that will occur not only for the citrus industry but all other aspects of the agriculture industry. Ultimately, it will be a matter for SARAC, with respect to its internal processes and discussions with the federal body and based on the proviso of the apportionment of those funds that are collected here in South Australia, to advance the interests of the South Australian citrus industry.

Clause passed.

Clauses 2 and 3 passed.

Clause 4.

Mr PEDERICK: My understanding is that this clause does not fully replicate a clause in the act about reporting citrus trees and what variety or amount of citrus might have been packed by a packer. Just for validation for the house, I understand that, instead of processors and growers reporting to a board, they are reporting directly to the minister who will then be passing that information on, if need be, to Citrus Australia Ltd and, potentially, other bodies.

The Hon. P. CAICA: As I understand it, this particular part 7 was actually introduced as a result of discussions with the member for Chaffey. It involves, if you like, the reserve powers of the minister, and I am advised they would only be invoked if, at any time, Citrus Australia, who has some responsibility for the collecting of information, was not able to collect that information for whatever it might be and then those reserve powers would be invoked.

As I also understand it, it is certainly the expectation that those powers would not necessarily be used at all often. We would hope that the information that is collected in the interests of the industry would be provided to the national body by the growers here in South Australia. These are reserve powers, and I acknowledge the role of the member for Chaffey in having this part 7 amended to reflect this particular process.

Mr WHETSTONE: In that process, there was, I guess, some concern about collecting the information. I understand that the minister has the power to collect that information, but the process of collecting the information, as I understand it, is of some concern. I have been contacted by several packers who have expressed concern that they now have the onus on them to compile data and supply that data to the minister, such as crop types and tonnages. That is an extra burden on the packers, and is something that was previously performed by the citrus development board. That is only part of the data information. Who will have the capacity to compile planting data, and how is the Privacy Act around collecting that data going to be addressed?

The Hon. P. CAICA: As I understand it, under the new arrangements, Citrus Australia will provide a number of programs in the area of information services, including the national citrus communication program, the national planting database, which the member for Chaffey mentioned, and the national information citrus program. SARAC will be responsible for ensuring that Citrus Australia is diligently collating national information on crop estimates and planting statistics, with emphasis on the integrity of the South Australian information.

As I also understand it, the processors themselves are required to send in information to the Auditor-General from time to time. That information is actually used in such a way to ensure that you are getting the majority of growers—in fact, all the growers—with respect to their particular contributions. But, again, the new arrangements provide for a number of programs in the area of information services, as I have said.

As I understand it, feedback from some stakeholders indicates that information provided in a national context is more relevant to their particular businesses, given the nature of that business and its relationship to the national market. I am also advised there are numerous private providers of information services that individual businesses will continue to pursue. But, again, I understand that this matter is in place, understood and agreed to by the industry as best as it can.

We also know that this is the very nature of agriculture. I often wondered, when I was the agriculture minister, about the early people who opened up land and who were fiercely independent, and of course that does not often lend itself, with that fierce independence, to necessarily working as well as it might from time to time, as a collective. I think that was highlighted by the member for Schubert just a moment ago.

Knowledge is power, and I think whatever information can be provided will further enhance the current and future direction of the citrus industry in this state. I am convinced that that will empower the citrus industry to better plan its future as well, through the provision of that information.

Mr WHETSTONE: I hear what you are saying but, again, Citrus Australia has a voluntary membership. As I said in my earlier contribution, only 10 per cent of the industry are members of Citrus Australia, so they do not have the power or the means to actually collect data, especially when it is surrounded by privacy clauses.

There is a number of issues around addressing collecting the information that bothers me. Another would be crop forecasts. Citrus Australia would have to have people on the ground, as would SARAC, and my concern is that dollar will need someone out there compiling the information on an ongoing basis. Again, as you said, knowledge is power, and to be out there on the ground to articulate that information is a costly exercise.

When collecting tonnages and varieties, a number of the big growers in South Australia contract pack their fruit interstate. So that fruit does not pass through a South Australian registered pack house. How will that information filter back into South Australia, the responsibilities of those Victorian and New South Wales pack houses? It does not appear that there is an onus on them to report that information back.

The Hon. P. CAICA: As I mentioned earlier, Citrus Australia provides a number of programs in the area of information and services. I mentioned that they include the national Citrus Communication Program, the National Plantings Database and the national InfoCitrus program. These particular services are funded through the national research funding that is available. I am further advised that if indeed a grower subscribes to these particular programs, it would not matter whether they pack it in Victoria or in South Australia, that information would be collected through this particular process. If the packer subscribes to that particular program, that information will be collated and available.

I guess there is a dilemma if some people are not subscribers. It is very difficult to get that information. Being well connected to the industry, like a lot of your friends and colleagues in the Riverland, you should encourage information to be provided that better informs the welfare and the nature of the industry at any particular point in time.

Mr PEDERICK: I want to make a statement. In regard to part 8 and the expiry of act amendment which was introduced by the Hon. John Dawkins in the other place, I would just like to put on the table that I was very pleased—and I said it in my contribution—with the good faith negotiations with both the department and the minister's office. I know that all my discussions with Natalie Rutherford were in good faith and everything went as we discussed as far as this amendment is concerned.

In this place, where things can get fairly robust, I certainly appreciate the work that went into getting this amendment up and agreed to by the government. I am very pleased with that. I think it gives a realistic date (1 January 2014) from which the Citrus Industry Act 2005 can be repealed. I just note my appreciation, minister.

Mr WHETSTONE: Thank you, minister, and the minister's department. I would just like to put something on the record. With the expiry of the act on 1 January 2014, under the guidance of SARAC, obviously the end aim is to be part of Citrus Australia. Can the minister advise the committee that, if there are barriers for the transition from SARAC into Citrus Australia, the minister will revisit the Citrus Act so that we can address any issues for the betterment of the industry?

The Hon. P. CAICA: I thank the honourable member for his question, and the first thing I would say is that we want to go forward, not back and, as I understand it, the industry itself wants to go forward and not necessarily go back. I think during this process, the ongoing dialogue that will occur within the industry and be provided for by SARAC will determine what it is that might manifest itself at that time following the expiry date. I hope and trust that the industry will continue to look forward and not look back to what once was.

Clause passed.

Title passed.

Bill reported without amendment.

Third Reading

The Hon. P. CAICA (Colton—Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (16:40): I move:

That this bill be now read a third time.

In doing so, I again thank the opposition and acknowledge the comments made about the input from members of the opposition in the other house. The government has very much enjoyed working collaboratively and cooperatively with the opposition to get the outcome that we have achieved here today.

Bill read a third time and passed.