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Thursday, 16 May 2002
Page: 2416

Mr FORREST (11:53 AM) —It was a great delight to listen to the member for Braddon and have his support for this Horticulture Marketing and Research and Development Services (Amendment) Bill 2002, which is a very important one for my constituency. We have been waiting for it for quite some time. Listening to members speak about their electorates often fascinates me. A lot of what the member for Braddon has boasted about I could claim for my own constituency, like the potatoes, carrots and so forth. But we do not want to compete because we share the same hopeful aspirations for horticulture. That is particularly the case for rural regions of Australia as they get into more extensive crops that the world is asking for instead of continuing to grow things which the market is not necessarily interested in. I refer also to what is happening with water availability and the changes to the way that water is regarded in Australia, thus stimulating an important industry.

This particular bill continues the government's program of modernising Australia's agricultural entities so that they can be modern, flexible entities, not hamstrung by government bureaucracies, so that they can progress and be innovative and not waste time because the market is changing so quickly. There is the need to relay sensitive market information to give growers of horticultural produce maximum opportunity because of the long lead times in getting some of these crops grown and on to the market. It is an exciting thing to see.

There has been a lot of uncertainty about horticulture. This particular amalgamation that the member for Braddon referred to shows the need to pass this legislation so that the government is the authorising controller in the ultimate sense and is where the buck stops for a privately owned and operated entity.

This bill creates two interesting abstract concepts. One is that there has to be an industry services body which provides not only the market and the product research but also an industry export control body. I am particularly concerned about that aspect. Under the bill, the minister will have the power to declare a body either an industry export control body or an industry services body. This has my support. In what were the Australian Horticultural Corporation and the HRDC, whilst their functions will be joined and performed by a private corporation, the Commonwealth, in other words the parliament, will retain the ultimate control of the functions. Particularly in regard to export control, this is vital.

Of all those industries that the member for Braddon has mentioned, I note he mentioned citrus as an area of interest for Tasmania. It is a vital industry in terms of my constituency. I represent the Murray Valley, along with the member for Farrer on the New South Wales side, and I note that this particular industry has really suffered substantially because of the need to advance in the world trade arena. The industry has suffered major reductions in tariff protection, which has exposed the industry to its inefficiencies. It forced the industry to move away from its reliance on frozen concentrate orange juice, which comes from a valencia product. At great pain, the industry has responded and a number of types of valencias have been removed and replaced by a planted navel product, which has cost the industry dearly. Their great expectation now is that this navel product will have access to international export markets.

I am very concerned because the first task that HAL will have is to deal with the implications of an industry commission report which is now with the minister. I do not have the advantage of knowing what is in the final report, but I am very anxious on behalf of my citrus growers to read, in the draft report, recommendations that will severely undermine the security that the citrus industry has with respect to the US export market.

This has been achieved by assigning a single desk entry into the United States. There is a very constrained, narrow window measured in weeks for our industry to get into the United States market in off season. It is vital that that is managed and controlled tightly. We do not want inferior product getting into that market and destroying the very good reputation that Australian citrus growers have established in the United States market. In the draft report of the Productivity Commission, draft recommendation 7.8 stated:

Horticulture Australia Limited should give serious consideration to discontinuing the requirement that citrus exporters use a single importing agent in the United States.

It alarms me that an important government body like the industry commission would show such lack of understanding of the vital importance of disciplined, ordered market entry to put a recommendation like that in its draft report. I understand that they have not modified those drafts and I am very anxious for the minister to have that report tabled so that my citrus growers and I can contest a suggestion that the single entry to the US be abolished.

It alarms me that an important government body like the Industry Commission would show such lack of understanding of the vital importance of disciplined, ordered market entry to put a recommendation like that in its draft recommendation report. I understand that they have not modified those drafts and I am very anxious for the minister to have that report tabled so that my citrus growers and I can contest a suggestion that the single entry to the US be abolished.

It just makes nonsense of the struggle the industry has had in the last 10 years. Pressure has been put on the citrus industry in Australia in that period. Where growers once enjoyed a tariff protection of 35 per cent, it was reduced to five per cent overnight and, cold turkey, they were asked to compete without that protection in the domestic market. Today you can buy in supermarkets in Australia oranges from southern Africa and oranges from California in the United States. The citrus industry's big opportunity now is the international market.

I am pleased that the minister is present and, although I understand that right now he is busy satisfying the beef industry—again the culprit is the United States—and he does not want two world wars being conducted at the same time, my citrus growers are anxious to see the final recommendations of the Industry Commission's report. They will object and fight strongly against the draft recommendation 7.8. Minister, I warn you that I will be giving them my maximum support.

To compete in a world trade market, which is this industry's greatest hope and expectation, and to enjoy a premium market—to get the best product on to the marketplace and establish a premium—can only be achieved when we have got tight and very orderly marketing into those markets. The industry has been very active in its promotion of its products in our nearer markets in Asia—Hong Kong, Indonesia, Korea, the Philippines and Taiwan. Let me explain that the applied tariff rates against which they have to compete into Indonesia are 25 per cent. Although the Minister for Trade and the Minister for Agriculture, Fisheries and Forestry have been pushing very hard for a fairer access into Korea, the tariff rate is still 50 per cent. In fact, if it is more than 20,000 tonnes of product into the market the tariff rate goes to 64.7 per cent. Those countries still need to get the message that Australia expects fair trade and to compete on a level playing field. The Philippines is much better. We have seen some reductions: it used to be 30 per cent and it is now down to 10 per cent. In Taiwan we have been pushing very hard. They are anxious about their entry into the World Trade Organisation and once that is achieved we expect that they will honour Australia's request to lower their tariffs. They are still at 30 per cent and lower if the quota is less than the small amount of only 600 tonnes.

The playing field is nowhere near level. I am sorry to focus entirely on the citrus industry—but it is very relevant to this bill—and it has been waiting for this legislation to enforce its export control of the HAL. I am very anxious for the bill to be passed, and I am very pleased to see the opposition supporting the bill. I would like to allow the minister time to sum up. In response to the remarks by the member for Braddon, I want to reinforce how important this industry is to our GDP. It is the second largest agricultural industry after wheat in aggregate. Whilst it is a `fruit salad' of individual commodities and products which on their own are small, as an aggregate industry horticulture is big. After wheat it is our largest single agricultural export. The member for Braddon is right. It has grown at the incredible rate of 142 per cent in 10 years. It represents 18 per cent of agricultural production. It is vital to regional areas because it is a labour intensive industry that employs 80,000 people across the nation and a further 11,200 in the processing sector. Being food related it is intensive because it has to satisfy some very strict quarantine requirements. There are a lot of families involved, generally mums and dads. Twenty-one thousand farms are engaged in horticultural industries around Australia. It is a very important industry and I am glad that parliament recognises that. I am pleased that a bill like this has unanimous support.

In the year 2000 the industry represented $5.5 billion of GDP—and with the industry's growth rate that figure must be higher by now. The relevance for me and the member for Braddon is that the farmgate value of that is $4.7 billion. That is revenue to our rural locations; it is a sizeable amount. With that level of employment, it is an industry we must try to encourage.

With those remarks I will finish and allow the minister to sum up. I will be interested in his comments about the tabling of the Productivity Commission's report and his assurance that he will consult widely with citrus growers, who are very important people to the members for Farrer and Riverina, to me as the member for Mallee and to the member for Wakefield.