APPLE AND PEAR INDUSTRY

The Hon. T.J. STEPHENS (14:48): I seek leave to make a brief explanation before asking the Minister for Agriculture, Food and Fisheries questions about the apple and pear industries in this state.

Leave granted.

The Hon. T.J. STEPHENS: I refer the minister to the comments of the chair of Apple & Pear Australia quoted in yesterday's The Advertiser regarding the struggling apple and pear industry requesting $21.9 million over four years from the government to support the industry. The industry itself is willing to commit $102.8 million, creating a total package of $124.7 million. These industries contribute $42 million to the South Australian economy each year, equating to $168 million over four years, and are crucial to the long-term viability of key South Australian regions. As floods are on their way and the industry has recently been hit with the revelation of cheap and nasty imports by supermarkets, as well as the reality that it cannot compete with cheaper labour costs overseas, my questions to the minister are:

1. Does the government support the South Australian fruit industry; if so, will it prove it by committing to this transitional support package?

2. Is the government still committed to fighting the WTO's ruling regarding the import of fire blight-prone New Zealand apples into this state?

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (14:49): I thank the honourable member for his most important question. I understand from the PIRSA Food ScoreCard that, in 2010-11, the South Australian apple and pear industry had an estimated production of about 3,000 tonnes, which equated to a farm gate value of approximately $48 million. Apples are grown mainly around the Adelaide Hills, the Riverland and Limestone Coast. I am led to believe that South Australia represents about 10 per cent of the area planted to apples nationally, but it has some of the highest density new plantings in Australia. This is a clear sign of our industry making moves to attempt to reposition itself and make itself more competitive.

I have been informed that the seasonal conditions this year have been reasonable and that this has resulted in a strong production result. It appears at this point in time that the supply is outweighing demand, leading to lower prices for our farms. Clearly, eating a South Australian apple a day will help support our farmers during this difficult time.

The industry is calling for a federal government funding package to help industry adapt to apple imports. This is in response to a World Trade Organisation ruling allowing for the importation of apples from New Zealand. I remind members that the importation of apples is a commonwealth government responsibility.

In response to industry concerns about the importation of New Zealand apples and the potential for plant diseases, the state government partnered with the Apple and Pear Association to develop a strategy for improving community understanding of plant health and improving on-farm biosecurity, and I think those efforts were very much appreciated by the apple and pear industry.

The industry is proposing that the federal funding will be used to improve its ability to compete with imported products. Apple and Pear Australia commissioned the Centre for International Economics to provide an economic assessment of the potential impact of imported apples from New Zealand to China and the US. The report states that the Australian apple industry is uncompetitive by international standards. Specifically, Australian growers lag behind international competitors on orchard productivity, product quality is inconsistent and the supply chain is highly fragmented.

The report also estimates that the immediate impact of increased import competition will be to lower the domestic market price. It suggests that the farm gate price will be around 21 per cent lower, wholesale prices 13 to 14 per cent lower and farm income up to 32 per cent lower. Apple consumption in Australia is predicted to be 17 per cent higher, with imports achieving a market share of around 22 per cent of the domestic production, estimated to climb by 11 per cent. So, as we can see, the government does support the fruit industry; it has done in the past and it continues to do so. We can see that the industry is facing very challenging times and we will continue to work with them to assist where we can.