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Thursday, 1 December 1960

Mr DUTHIE (Wilmot) .- Mr. Speaker,this bill is far more important than is the Apple and Pear Organization Bill 1960, which the House has just passed, and for that reason I want to spend some time on this measure.

Mr Mackinnon - Not too long. Spare us.

Mr DUTHIE - Much to the disgust of the sheep men, wheat-growers, dairy men, auctioneers, commercial travellers, insurance agents and the like on the other side of the chamber.

Up to date, the levy on apples and pears exported has returned to the Australian Apple and Pear Board about £40,000 a year to meet the cost of the board's administration and of publicity activities, sales promotion and like activities abroad. The board's present income has been found to be totally inadequate to meet the challenge by other producing countries to our apples and pears in overseas markets. If a levy of 6d. a case were in fact made, the return would be approximately £120,000 a year, and this would make a tremendous improvement in the finance available for the promotion of the sale of our apples and pears overseas. The position of the fruit industry at the present time may be such as to induce the board to impose a charge of 6d. a case from the time when this measure becomes law, instead of fixing the levy, as my friend, the honorable member for Lalor (Mr. Pollard), said may happen, at 4d. or 54d. a case.

I believe that time is not on our side in our efforts to meet this challenge to which we are subjected in competitive overseas markets, and I think that the industry ought to get cracking immediately this bill is passed by the Parliament and make efforts during the 1961 season to boost its overseas publicity campaign, its research activities, which are essential, and its trade promotion work generally. I congratulate the fruit industry on its progressive attitude, which has led it to realize that intensive promotion in the world's markets and research designed to improve the quality of fruit are necessary if this great Australian industry is to be maintained in a stable condition. Thousands of people in the various States depend for their livelihood on this industry. There are 1,200 registered growers in Tasmania alone. When one takes into account their families and the other people who, with their families also, depend on this industry, one gains some proper conception of what the industry means to Tasmania and the economy of that State.

The idea of an increased levy has been brought about by greater competition from other countries in our traditional markets. Page 6 of the report of the Australian Apple and Pear Board for the year ended 30th June, 1960, lists the countries which are seriously competing with us. South Africa. Argentina, Chile, Holland and Italy have increased their production of fruit, and competition from those countries is now threatening the marketing of Australian apples and pears overseas.

The first of the five main factors influencing the export markets up to recent years for our fruit has been the ordinary law of supply and demand, which quite often gets out of hand. The second factor has been economic weaknesses in purchasing countries arising from the devastation of war. These economic weaknesses have now been overcome and countries which were devastated by the war are now active as both producers and purchasers. Thirdly, seasonal crop failures overseas have helped steady sales of Australian fruits in our exports markets. One of the tragedies of primary production is that, for example, good fortune for wheat-growers in Canada may upset Australia's export trade in wheat. If wheat-growers in Canada experience bad seasons, the export price of Australian wheat is automatically lifted. The situation with respect to every primary product is the same, Mr. Speaker. The tragedy of drought, bad seasons or any other weather hazard overseas helps Australia. But if we have adverse weather conditions and other countries do not, we suffer and they are helped. This factor has had an important levelling effect in the past and has helped, through its consequential effects, to keep our export fruit industry fairly stable. The fourth factor has been occasional shipping difficulties, and the fifth factor has been increases in freights.

These factors have affected the marketing of our fruit and, on the whole, have had the net effect of keeping our markets fairly stable. But competition in the United Kingdom and European markets has now reached a new peak. Why? The cause is, first, the economic growth of countries like Argentina, Chile, Italy, Germany and South Africa, and, secondly, cheaper labour costs in South Africa and Argentina, which have enabled those countries to produce more cheaply than we do and to sell their fruit in the United Kingdom and European markets at prices lower than those at which we can afford to sell. Furthermore, other producing countries have improved the quality of their fruit. An additional factor is their proximity to the main markets compared with Australia. Their freight rates are lower than ours and they have shorter distances to cover. All this enables them to put their fruit on the market much more cheaply than we can.

The increased levy must be used to the full to step up the campaign to promote markets in various parts of the world. We must not confine ourselves to our traditional markets, but must seek new markets. The board is to be commended for what it has already done in the Asian area. For a long time, we were not exporting much fruit to Asia, but in recent years the board, as a result of its promotion campaign, has disposed of a lot of fruit in this area. For instance, in round figures, in 1959, it sold 100,000 boxes in Hong Kong, 27,000 in the Philippines, 29,000 in Ceylon, 13,000 in East Africa, 18.000 in Aden and 31,000 in the Pacific Islands. But our sales to these markets must be further increased. These markets are closer to us than the European markets are and this helps to keep freight costs to a minimum.

I should like to give an example of the way that production has increased in countries which compete with us. This will show the massive problem that we face. The board is aware of the problem and is worried about it. On page 6 of its report, the board said -

The Board wishes to emphasise that there is little in the 1960 season's results to give rise to optimism.

The report continued -

Last year, the industry suffered a considerable setback in the face of intensified competition from other supplying sources. Forward sales showed a sharp decline and returns to growers for apples sent on consignment were frequently below cost of production.

This industry is beginning to meet the great pressure of competition. Any money that can be spent in the promotion of markets will be of tremendous value to our economy. I shall give some figures to illustrate how production in other countries has increased and how competition from them has become really intense. From 1934 to 1938, Italy produced 269,000 tons of apples. For 1953-54 it produced 846,000 tons, but by 1958-59 production had jumped to 1,601,000 tons. Italy, of course, is only a hop, step and a jump from the European markets. France produces mainly dessert apples, but its production will be doubled by 1965. South Africa, because of its low cost of production and low freight charges, has practically wiped out great areas of our small fruits industry in the electorate of the honorable member for Franklin (Mr. Falkinder) and in the south of my electorate. Now South Africa is coming into the apple market. In 1959-60. South Africa produced 5,000,000 bushels, but production in 1970 is estimated at 13,000,000 bushels. Argentina, in 1939, produced 4,000 tons of apples, but this year it produced 100.000 tons.

North America, New Zealand and Australia, on the average, are producing more apples as the years go by. Our production is not increasing at such an alarming rate as the production of other countries is, but it is increasing so much that we should ask ourselves how we will ever get rid of the fruit we will produce in the next two, three or four years. It seems that we will not be able to do so unless we are able to increase our overseas markets tremendously and, in addition, increase our home consumption. The board should not lose sight of the need to increase consumption of apples and pears within Australia. However, we now pay 6d. for an apple, a pear or a banana in the dining-room here, and we should realize that such high prices must generate some buyer resistance.

The difficulties that I have outlined create a colossal problem for the industry. It is difficult for some growers to keep their heads above water, and we must not forget that some of them are selling their fruit at a price below the cost of production. They will not be able to stay in the industry if that state of affairs continues. The farmer cannot pass on his increased costs, and his costs have certainly increased in the last few years. The only thing that has not increased is the price at which he sells his apples on overseas markets. We are right at the heart of the problem when we speak along these lines.

How can we meet the intense competition that faces us overseas? The first means is publicity. From what I have read and heard from those who have been overseas recently, our publicity in the United Kingdom is very good. The board, in its latest report, gives some account of what is being done to increase overseas publicity. Mr. White, the Tasmanian Agent-General, is doing a very fine job for apple-growers in publicizing the fruit in the United Kingdom as much as he can, and the Australian High Commissioner is doing what he can to obtain increased publicity. In its report, the board said -

The Board's contribution to the 1960 United Kingdom Publicity Campaign was £10,000 (stg.) compared with £6,500 (stg.) in the previous year. It has been decided to contribute a similar amount for 1961. In this regard the Board notes with appreciation the Commonwealth Government's agreement to the proposals of the Overseas Trade Publicity Committee for a substantial increase in expenditure over the previous year. The 1961 campaign will involve a total expenditure of £521,000 sterling, and the Board's contribution will be more than doubled by the Government in providing specific funds for the .1961 apple and pear drive.

Television and all possible avenues are being used to publicize our apples in the United Kingdom. The impact of the television campaign was very great. Beautiful Australian girls are being used in this campaign.

After appropriate advance publicity, the girls gave away fruit at railway stations. This was accompanied by special apple dishes at railway restaurants. The National Farmers Union is also assisting in the publicity campaign. Publicity campaigns are also developing on the Continent, in Germany, Sweden and Norway. I believe these campaigns could be stepped up to much the same intensity as that which prevails in London. The report says -

The campaigns were organized through the Australian Trade Commissioners in Bonn and Stockholm in conjunction with the local trade. In this regard it is desired to record the Board's appreciation of the efforts of those concerned. With the increased funds available for Germany it was possible to undertake a concentrated newspaper advertising drive tied to the arrivals of Australian shipments. The advertisements were in colour and featured a brief description of the Australian varieties available. Reports indicate a marked consumer reaction. The campaigns in Sweden and Norway also featured press advertising together with point-of-sale material. It is considered that satisfactory results were achieved, having regard to the limited funds available.

It is very good to hear such reports. As to Australian publicity, good work was done through the Health Publicity Council.

Another way to attack the problem is by trying to reduce freight charges. In this respect the positron has deteriorated. Freight charges have increased by 20 per cent, in the last few years. Every small increase in freight rates deals a dagger blow at the industry. The report to which I have been referring says -

The Federal Exporters' Oversea Transport Committee has by negotiation obtained agreement from shipowners for an increase of 5 per cent, on general cargo and 7i per cent, on refrigerated tonnage . . . The current rate of freight represents about 40 per cent, of the C.I.F. value of apples, already a serious burden to carry in the face of the greatly intensified competition which must be expected in the future.

We on this side of the House have contended from time to time, and we will continue to contend, that we should have a national overseas shipping line, so that our primary producers, including apple growers, may get a better freight deal. The increases in freight rates have represented a tremendous impost on an industry in which the growers are already receiving for their product, in many cases, prices that do not cover costs of production. The Government has a bounden duty to primary producers to keep freight rates down. It may even have to consider seriously subsidizing freight charges if they continue to rise at the fantastic rate at which they have risen in recent years. We on this side of the House will continue to fight for justice for our primary producers in the matter of freight charges. We believe that some of our River class ships could have been converted and provided with refrigerated holds for the carrying of perishable cargo. As these ships are of about 10,000 tons displacement they would have been of great assistance in getting our fruit to overseas markets. Most of them have been sold in other countries, such as China and Japan. Some have been broken up and some are merely lying idle.

Mr. SPEAKER (Hon. John McLeay).Order!The honorable member is a little wide of the bill.

Mr DUTHIE - I am not wide of the bill, Mr. Speaker, because the report of the board distinctly refers to freights.

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