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Flower growers digging deep -

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Flower growers digging deep

Broadcast: 05/10/2011

Reporter: Greg Miskelly

Rising overheads threaten to uproot Australia's flower industry.

Transcript

LEIGH SALES, PRESENTER: Still in Canberra, the Federal Parliament is due to soon finalise the
Government's carbon tax legislation, but the debate over its economic impact is set to go on for a
long while yet. Big business has already been plenty vocal, but now small businesses are trying to
flex their muscles, asking if the tax will help foreign importers more than it helps the
environment. Greg Miskelly visited a Sydney family of flower growers to hear their views.

GREG MISKELLY: It's 5 am on market day at the Sydney Flower Markets. The gates have just opened and
customers are rushing to grab a bargain. Tony Bagala has been selling here for over 40 years, and
he says the high Aussie dollar means flower growers are feeling the pinch.

TONY BAGALA, FLOWER GROWER: Well, the dollar has increased the imports, because the dollar value,
it makes it a lot easier for people to bring stuff in.

GREG MISKELLY: Today his local roses sit alongside cheaper imports sourced from South Africa, India
and Colombia. And competition is fierce.

FLOWER PURCHASER: The majority of it is probably quality, because it's wedding flowers and stuff -
the brides want to have a perfect flower on the day. You really have to shop around to get a good
deal. That's where you find a lot of the local stuff is a tad more expensive.

GREG MISKELLY: By 9am, the market is emptying and sales are flat.

TONY BAGALA: As you can see, the market in general, there's a lot of flowers left in the market.

GREG MISKELLY: Tony's son Michael Bagala grew up with the flower business. He says an even bigger
financial threat is looming.

MICHAEL "SENIOR" BAGALA, FLOWER GROWER: The carbon tax, that's something that is pretty worrying,
because we're already trying to cut costs as it is and we've run out of ways to cut costs.

GREG MISKELLY: He and his cousin, also named Michael, already feel trapped by rising power, petrol
and utility bills.

MICHAEL BAGALA, FLOWER GROWER: General expenses have gone up a lot. You've seen electricity, water,
it's just gone crazy. Overseas, they don't have that problem. They've got cheap labour, they don't
have worries about that. For them they can produce and not have to worry about those overheads
which we have now.

GREG MISKELLY: With the carbon tax looming, the debate so far has been focused on the big end of
town: the top 400 polluters and how much compensation they'll receive. But it's here at the Sydney
flower markets where small businesses are now asking: have they somehow been forgotten in this
debate?

When Frank Bagala started his farm, he and his brother planted carnations in the open field. But
soon they were building massive greenhouses: by using industrial amounts of power, heat and water,
they could create perfect rose-growing conditions all year round. Now, their hydroponic operation
grows thousands of high quality blooms. A new wave of mostly-migrant workers helps pick and pack
their roses, but while production is booming, profits are down, thanks to soaring energy bills.

MICHAEL "SENIOR" BAGALA: You've got irrigation lines, water expenses, electricity expenses,

GREG MISKELLY: And this heated water, what's powering that?

MICHAEL "SENIOR" BAGALA: What's powering that is A-grade coal from [inaudible], which gets the
temperatures we need inside the furnace, and pushes the water through the major pumps and
distributes the heat evenly throughout the farm. Mid-June, July, we do go through a fair bit of
cold; we go through about 30 to 35 tonnes... we burn in a week.

GREG MISKELLY: This coal-fired boiler cost the farmers $600,000. They hoped to beat winter energy
costs, but they say the weekly coal bill is around $9,000.

MICHAEL "SENIOR" BAGALA: Yeah, well, originally, yes, we did look at it and thought this is a cheap
source of energy, but over the last five years it's gone up 300, 400 per cent.

GREG MISKELLY: The company is already importing some rose varieties during the cooler months. The
younger Michael says the carbon tax offers no assistance to keep growing.

MICHAEL BAGALA: No, it's not, it's not. It's not encouraging us at all. It's making us have to
think about going offshore. It's making us actually say "What do we do next year? Do we switch it
off and import from overseas?" It forces you to think about that, where the last few years we were
thinking about, "Let's grow local, let's grow local, let's grow all year round, let's keep on
going."

GREG MISKELLY: Frank Bagala says he's worried not just for his family but for other locals growing
berries, flowers and vegies.

FRANK BAGALA, FLOWER GROWER: Yeah, it's a worry, because I'm not a big grower, but it's sad for me
to see it go after all these years.

GREG MISKELLY: His son says they did explore a solar energy option.

MICHAEL BAGALA: We've looked into it and the amount of money we have to outlay to get back, it
might take 20, 30 years of today's technology to pay it off. There is just no system that will help
us at the moment. Fossil fuel is it. It's this or nothing.

GREG MISKELLY: As the Bagala family ready for yet another market, they worry how the carbon tax
might slash their tradition of growing.

TONY BAGALA: It depends, is it going to be just on water, is it going to be just on electricity,
just going to be on coal, is it going to be on everything? How much is it going to cost? As we're
saying, people are struggling as it is now.

GREG MISKELLY: Would you be sad if you had to stop growing over winter? What would happen?

MICHAEL BAGALA: Yeah, I'll definitely be sad. Nothing beats a local grown rose, growing it
yourself, you have that achievement, bringing it up, selling it to the florist and they're happy
with the product.