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Thursday, 14 November 1935

Senator BADMAN (South Australia) . - When listening to the speech of Senator McLeay, I felt that a grave injustice was being done to a section of the dried fruits industry. After investigation, however, I have altered my opinion considerably. I have received several telegrams from independent packers and growers in South Australia, and, on inquiring into' their case, I have come to the conclusion that the disallowance of this regulation would be a grave injustice to the industry as a whole. On the receipt of those telegrams from the interest supporting the motion moved by Senator McLeay, I met thirteen of its representatives in conference. I submitted to the delegates a series of questions for my own enlightenment. I asked how much of the dried fruit was controlled, exported or handled by the independent organization. The secretary of the organization gave 25 per cent, as the figure, but that must have been quite incorrect, because 88 per cent, is handled by the Australian Dried Fruits Association, in South Australia, and only 12 per cent, of the total by the independent organization. When one discovers that certain information submitted to him is incorrect, one is never quite prepared to accept without confirmation any additional facts which may emanate from the same source. The Senate is concerned a 3 to whether, these regulations governing the control of dried fruits are in the best interests of the industry as a whole, or are being used to the disadvantage and detriment of a particular section. Senator McLeay made some grave charges against the Dried Fruits Export Control Board, which were tantamount to an accusation of restraint of trade. The honorable senator also said that, in his opinion, the board is prejudiced against the majority of the independent growers. A further accusation which he made was that the control hoard is dominated by the Australian Dried Fruits Association, because six of its members are members also of that association. Dealing with the latter accusation, I ask, would those six men be working in the interests of the growers or not? I take it that they certainly would be, because it would be to their own interest to do so. Otherwise, I cannot conceive anything more stupid or foolish than for the majority of the growers to elect them. Why should the control board he prejudiced against independent growers, who handle so small a proportion of the total quantity of dried fruits? The independent packers and growers handle only 2,500 tons out of a total of 55,000 tons of dried fruits exported annually; and 20,000 tons are produced in South Australia. Senator McLeay stated that between 1,200 and 1,500 growers in South Australia sell all or portion of their fruit to the independent organization. As there are only 2,206 growers of vine fruits in South Australia, that is a remarkable statement. I believe that that number does not consist only of vine fruit-growers, but includes a fairly large number of tree fruit-growers.

Senator Hardy - Does the honorable senator mean to say that if a person 'has a plum tree he becomes a grower?

Senator BADMAN - I have heard of numbers of persons dealing with the independent association who have not more than half a cwt. of dried fruit to market. Some of the other members have bad not more than 2 cwt. This position applies throughout many districts in South Australia. Such people have been appropriately referred to as "backyard growers". In the many years during which the Control Board has been in operation, it has evolved a system that has been most satisfactory to Australian growers. When I use the term growers, 1 do not include independent packers; I refer to the members of the Australian Dried Fruits Association and the Independent Growers Association. For the disposal of Australian production, the board has adopted the quota system. Taking Australia's total production as being 75,000 tons, I find that 15,000 tons is consumed in Australia, 40,000 tons is exported to the United Kingdom, 16,000 tons to Canada, and 4,000 tons to New Zealand. The Australian quota is sold at a fixed price, usually about £56 a ton, and the New Zealand quota at about £40 a ton. The price obtainable for the fruit exported to Canada may 'be higher than that ruling in England or New Zealand. Another point that must be considered is that Canadian payment is hy cash draft within 90 days, with exchange added. On investigation, I have reason to believe that the independent packers and growers' organization is seeking to obtain control of the Canadian market, because it aproaches the grower and pays cash to him, and wants cash in return. The independent body does not wish to be controlled by having to send a quota of its produce to Canada and other quantities to the United Kingdom and New Zealand after the Australian requirement has been absorbed. It is looking for the cash draft market and trying to build up its business on that basis. The control 'board issues licences to exporters and allocates the quotas for each importing country, on a percentage basis, to exporters of either the Australian Dried Fruit Association or the Independent Dried Fruit Association. The secretary of the Independent Association in Adelaide "informed me that, on one occasion when an application was made for a licence, the board refused it.

Investigating that case, I found that tho application form had not been filled in correctly and that the board could not possibly issue the licence on the basis that the applicant required. I propose now to refer "to the regulations which are so objectionable to the independent growers. Regulation 7, sub-regulation 2a, states -

That the licensee shall not sell any dried fruits overseas at a price loss than tlie authorized price.

The comment of the association is as follows -

Our packers are prepared to observe fixed prices for export provided they are allowed to supply their own clients and to supply those clients with the special class of fruit they desire. In common fairness, however, we consider wc should have some say in the fixation of any prices arranged in Australia for exports.

The independent growers and packers must admit that the representatives on the board which fixed the price were chosen by ! ballot. and because it did not have a sufficient number of supporters among the growers it was unable to have a, representative elected to the board. Sub-regulation 3e reads -

That the licensee shall ship all dried fruits through and ito such agents as are authorized by the board.

The comment of the independent association is that this is quite acceptable provided that it is limited to the United Kingdom as hitherto. Its regret is that it does not control all the Canadian exports. Sub-regulation 4 reads -

That the licensee shall ship all dried fruits through such person as the board determines.

The association comments that it does not object to shipping through an authorized agent, but does object to being allowed to ship only through and to such persons as the hoard determines. The independent association imagines that it will not get justice from the board. Sub-regulation 5 reads -

That the licensee shall insure each shipment of dried fruits with such person as the board determines.

The comment is -

This has never been enforced, and we would object if it were.

Sub-regulation 6 reads -

That the licensee shall sell all dried fruits on such terms and conditions as arc approved by thu board, and to such purchasers through such agents and in such quantities as the board determines.

The comment is -

This amounts to absolute prohibition ot trade, and will undoubtedly react on the industry.

There is no evidence that hitherto the system of control has reacted detrimentally on those engaged in the industry. I take it that something has happened to make necessary a tightening up of the regulations, and the result, is that some exporters fear that they will not be allowed to continue doing what they have been doing hitherto. Sub-regulation 10 reads -

That the licensee shall, not less than fourteen days prior to the export by him of any shipment of dried fruits, forward to the secretary or an authorized person in duplicate, an application, in accordance with Form C, lor authority to export those dried fruits.

This is the comment on that provision -

Impracticable and would preclude acceptance of many orders.

When I asked to be informed of any specific cases of hardship none was forthcoming, and I know of none except, perhaps, the case mentioned by Senator McLeay - the shipment which was refused because the fruit did not go forward by the vessel designated by the Canadian buyers. Sub-regulation 16 reads -

That the licensee shall, whenever so required by notice in writing signed by the secretary or an authorized person, withhold from export the whole or any portion of any dried fruits intended for export.

This is the comment on that provision-

This conflicts with the Pried Fruits Act which compels export of certain quotas of each variety of dried fruits. The act says certain percentages must be exported. The regulation gives power to an officer of the" board to prohibit export.

Senator Gibson - That is a good regulation.

Senator BADMAN - I believe it is, and it is absolutely necessary if we wish to exercise effective control over the export of dried fruits.

The Minister stated that the new regulations of 1935 were almost identical with the regulations of 1927, but had been slightly amended to give the board greater control over shipments to all export markets. There has been considerable development of the industry since 1927, and I have no doubt that the board discovered holes in the act which the Government ha3 very wisely decided to close. Hence these additional provisions to prevent future leakages. The Minister pointed out tha!: it was necessary to restrict the number of agents handling dried fruits for the overseas market, in order to prevent underselling and unfair competition, particularly in Canada.

Senator Payne - Has there been direct underselling, or the payment of secret commissions ?

Senator BADMAN - There has been underselling by various devices.

Senator McLeay - The penalty for such offences is a fine of £100.

Senator BADMAN - The Leader of the Opposition (Senator Collings) instanced the position of the dried fruits industry in California, stating that seven years ago the production totalled about 300,000 tons a year. It should be explained that during .the prohibition years in the United States of America, growers who had vines for the production of wine, grafted currants and raisin grapes on to existing stocks, with the result that the production of dried fruits rose to about 250,000 tons in 1928. To-day they are getting about £10 a ton for 200,000 tons of their output which is sold in the home market. If they had adopted the system obtaining in Australia and, by means of a board, exercised control of the industry, they would be in a far happier position because the local market absorbs about 170,000 tons n year, leaving a surplus of only 30,000 tons which might be dumped in the world's market as Queensland surplus sugar is dumped in London. Californian growers disposed of portion of their output in Canada prior to the entry into that market of. Australian producers, largely as the result of activity on the part of the Australian Dried Fruits Association, though I am aware that the Independent Packers Association" claims credit for having secured portion of the Canadian market for Australian exporters. The truth is that ten years ago the Australian Dried Fruits Association secured a preference for Australian growers of 3 cents ner lb. equivalent to about £14 a ton. The Ottawa agreement increased the preference by 1 cent per lb., and gave us an advantage of £18 a ton over American producers. Our export trade to Canada now amounts to about 16,000 tons a year. Preference in the New Zealand market also enables our producers to compete successfully against American growers. There is no control over the export of dried fruits from Greece or Smyrna, our principal competitors in the London market.

I am convinced that the board is doing its best to place Australian dried fruits on the world's markets under the most favorable conditions, and I am glad to know that its efforts are meeting with success. I regret that Senator McLeay did not investigate the other side of the subject before submitting this motion for the disallowance of the regulations. Had lie done so, I feel sure that he would have hesitated before taking action which might seriously injure the industry.

Recently I met representatives of the Independent Dried Fruits Association in Adelaide with a view to ascertaining their views. There were thirteen representatives present. It was stated that 1,500 growers in South Australia dispose of their fruit through the Independent Dried Fruits Association, and that 500 growers sell for cash.

Some interesting developments have taken place in South Australia during the last few years; the most noteworthy being the decrease of the percentage of fruit sold outside the Australian Dried Fruits Association. The figures are as folows : -


These figures show an appreciable improvement in the quantity of fruit that is being marketed through the Australian Dried Fruits Association. Despite thu claims made on behalf of the Independent Packers Association it is evident that that body is not giving the growers such a wonderful deal as to encourage them to market a larger proportion of their output through that organization. I feel sure that, in the course of a few years, the Australian Dried Fruits Association will have complete control of the industry, and will handle the whole of the South Australian export quota as well as that for Victoria.

Senator McLeay - Why not admit at once that the purpose is to secure a monopoly of the dried fruits export trade I

Senator BADMAN - The system which gives the best results for the grower is the one that should be approved. Prior to the appointment of the board the condition of the dried fruits industry was most unsatisfactory. Frequently exporters who sent dried fruits overseas received an expenses account which they were unable to meet. Since the act has been in operation, there has been a mostgratifying improvement of the industry. Some growers, who, ten years ago were almost bankrupt, are now financial. The Independent Dried Fruits Association declares that it is in favour of control, yet one or two of its member-; sought an injunction from the High Court against control by the board appointed under the act. I appeal to thu Senate no't to disallow the regulations which are necessary to ensure the continued development of the dried fruits industry in Australia along satisfactory lines. I hope that my colleague, Senator McLeay, will withdraw the motion.

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