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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-04-04 Daily Xml
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CITRUS IMPORTS

The Hon. J.A. DARLEY (15:45): I rise today to briefly speak about my recent visit to citrus growers in the Riverland, where I learnt about some of the issues which concern them and affect their livelihood. There is great concern over the impact of imported juice concentrate. The issue of overseas imports of juice concentrate is complex. For years it has been stated that Brazilian orange juice is cheap; however, the market has been manipulated for many years.

Juice processors have never been able to substantiate their pricing, and Riverland producers have always received less for their produce than what the processors pay for overseas concentrate. Currently, the price for local produce is $50 per tonne compared to $350 per tonne for imported concentrate. Processors have always said that Australian producers can only supply about 45 per cent of what the market demands, and this is how they justify their need to import concentrate.

Each year, processors predict whether producers will have a good or a bad crop. Based on this prediction, processors will place their orders for overseas concentrate. If the prediction is that local producers will have a small crop, a larger order for concentrate is placed. If this prediction is then wrong, processors find themselves with an excessive amount of concentrate.

The cost of storage for the concentrate is high, so the processors' preference is to use their excess concentrate stock (which they have already paid for) rather than buy fresh oranges from local producers. This reduces the demand for fresh produce and pushes prices down as supply is plentiful. The juice industry is worth about $1 billion a year. It is a growing industry; however, it is growing on imports.

In the past few years, the lowest amount of concentrate imported from overseas was 450,000 tonnes. Last year, this figure grew to 600,000 tonnes. This would be good if production was showing similar growth; however, I understand South Australia used to produce 180,000 tonnes and this figure is now as low as 40,000 tonnes.

Unemployment has risen as the number of pickers, packers and production plants have declined. This has a flow-on impact to the larger community because as unemployment has risen more and more people choose to leave the area to seek out opportunities elsewhere. Whilst the towns are dying, many producers are finding themselves with unwanted fruit rotting on their trees. In South Australia alone there is approximately 20,000 tonnes of unpicked oranges.

When I visited the Riverland about three weeks ago I witnessed one producer pulling out his trees with a bulldozer as he could no longer afford to continue. Many have branded this as a publicity stunt; however, the reality is that there are many other producers who would like to do the same thing. The ironic part is that they cannot afford to pay for a bulldozer to pull out their trees because business has been so bad.

It seems to be absolute lunacy that there is fruit rotting and wasted and producers wanting to pull out their trees when processors are using concentrate imported from overseas to manufacture juice. Citrus growers are not asking for a handout. One of the strongest measures which they have been lobbying for is truth in labelling. They believe that if consumers are empowered with the knowledge of what was in their food products and where it came from the overwhelming majority would support local products.

We all know the issues with food labelling: as long as 51 per cent of the product and the packaging are made in Australia then it can be labelled as Australian. As it stands, Australian orange juice may consist of orange juice concentrate from Brazil which is diluted with Australian water. If the bottle is made in Australia then the overall product will more than pass the 51 per cent test required to be labelled as Australian.

One citrus grower I spoke to said that his dream was for food producers to have an independent body similar to a footy tribunal where disputes can be heard. This independent body would oversee arguments about pricing and other issues so that a fair outcome can be achieved. At the moment, food producers feel abandoned by their industry groups and the government, who both seem to have done nothing to protect them, their industry or the nation's food bowl. For food producers to dream of having their voices heard in an open and fair environment does not seem like too big of an ask to me. However, the new position of Small Business Commissioner should fulfil this role.

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