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Thursday, 14 November 1985
Page: 2182


Senator WATSON —by leave-This is the second report on assistance to the apple and pear industry to come before the Senate this year. The Industries Assistance Commission was asked in March to investigate whether the assistance arrangements applying for the 1984 season were in need of variation. Unfortunately, this request was made at a time when harvesting of this year's crop had already begun and, thus, time constraints would have made it extremely difficult to implement any new underwriting arrangements that may have eventuated. However, the IAC interim report concluded that no further assistance was to be recommended. The IAC's decision on interim assistance was contrary to the submissions it received from the Tasmanian Department of Agriculture, the Tasmanian Apple and Pear Growers Association and the Australian Apple and Pear Growers Association which had advised the IAC that within the area of fruit `at risk' sales, there was definitely a need for further support.

Similarly, the recommendations contained in this final IAC report will be met with mixed reactions from the apple and pear growers. In fact, the IAC has recommended that the apple and pear industry should be assisted somewhat below the current level of assistance and the present underwriting be extended for only a further three years and then terminated. I believe that the industry would have preferred that after three years the position not necessarily be terminated but reviewed. During these three years the IAC has recommended that underwriting be restricted to `at risk' sales, et cetera.

The apple and pear growers have been pleased to note that the IAC has recognised the need to protect vulnerable `at risk' sales. However, the IAC has recommended that the trigger price be calculated on the basis of 80 per cent of the volume weighted average `at risk' f.o.b. price for the highest three of the past four years. The industry would have preferred to have seen the trigger point assessed by a figure of 95 per cent over the past four years. As Tasmanian growers anticipate production costs of $9 per case next year, they are apprehensive about the adequacy of the underwriting arrangements advocated by the IAC for the 1986 season. Growers will be dismayed that after a decade of intensive rationalisation the IAC still advocates a further consolidation of the industry.

Tasmanian fruit growers have a convincing record of performance in rationalising their operations to better meet market demands. This has been achieved by re-planting with new varieties, the recent investment of $10m in new technology and the review of marketing strategies. The stage has now been reached where the rejuvenated apple industry has re-established its position as a major agricultural industry in Tasmania.

In compiling this report the IAC seems to have been alarmed at the prospect of what it saw could be a re-enactment or a recurrence of the disastrous markets of 1981 when the Tasmanian Apple Marketing Authority failed to secure markets and also because of disastrous overseas prices. But what the growers need is a measure of underwriting of production costs in the event of a deterioration of the prospective market after shipping. That is where the problem arises.

The IAC report, despite its failure to recognise the need for adequate assistance, drew attention to some of the difficulties facing apple and pear growers. I think we should all be encouraged by the fact that a body as responsible and authoritative as the IAC has commented on the disadvantages of the absence of any plant variety rights legislation. I hope that the Senate and the Government take note of those comments. Secondly, I believe that freight costs imposed an excessive financial burden on Tasmanian apple and pear growers in terms of wharfage and associated costs because Australian growers have difficulties competing, for example, with similar costs and similar exports from New Zealand. Tasmania's surplus of apples and pears must be exported since there are limitations on the quantity of Tasmanian fruit that can be profitably landed on the mainland. The devaluation of the Australian dollar has brought about a largely unanticipated improvement in overseas market prices and we hope for a better season this year. I seek leave to continue my remarks at a later stage.

Leave granted; debate adjourned.