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Rural and Regional Affairs and Transport References Committee
04/07/2013
Review of the citrus industry in Australia

GRAY, Mr Ron, Private capacity

PUNTURIERO, Mr Michael, Mystere Orchards

SMYTH, Mr Robert Michael, Private capacity

Committee met at 9:01.

CHAIR ( Senator Heffernan ): I declare open this public hearing of the Senate Rural and Regional Affairs and Transport References Committee. The committee is hearing evidence on the committee's inquiry into the citrus industry in Australia. I welcome you all here today. This is a public hearing and a Hansard transcript of the proceedings is being made.

Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. The committee prefers all evidence to be given in public, but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. It is important the witnesses give the committee notice if they intend to give evidence in camera. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request the answer be given in camera. Such a request may, of course, be made at any other time.

On behalf of the committee, I would like to thank all those who have made submissions and will appear as witnesses. I welcome our first witnesses, who form our panel of citrus growers from South Australia.

Senator RUSTON: Chair, I want to put on the record that my husband is a consultant and has a small fixed-term, fixed-price contract which is partially funded by Horticulture Australia.

CHAIR: Mr Gray, you have lodged submission 12. Would you like to make any alterations or additions?

Mr Gray : No, I do not think so. I have a couple of press statements, but I do not have the resources to make photocopies.

CHAIR: Would you like to table those?

Mr Gray : If I could. One is a statement from the Juice Products Association, and there are a couple of other statements. One is from citrus growers who travel overseas on our money. Another letter is from Citrus Australia Ltd and is about expenses and how the hell they operate when they have no members. So there are those three documents.

CHAIR: Mr Smyth, you have submission 6. Do you want to make any alterations?

Mr Smyth : No, thank you, but I would encourage anyone to ring me after hours any time if it does not make sense. Some of it is a bit brief.

CHAIR: Mr Punturiero, you have submission 18.

Mr Punturiero : I have already distributed some—

CHAIR: Do you want to make any additions?

Mr Punturiero : I do have some extras, yes.

CHAIR: Right. We will work out whether to table it. Fire away if you would like to make opening statements. Then we will take some questions. We would prefer if the opening statements were brief.

Mr Gray : I have a very brief opening statement. I have been a citrus grower for 30 years and I have to say that I am going to see the complete demise of that industry within South Australia. We now have a system where I have never in all my years of growing citrus had a say in who represents me. We used to have the Australian Citrus Growers Federation; now they are called Citrus Australia Ltd. Even at a state level we now have a new group which is under that umbrella. I never voted for them. I have never allowed them. I cannot even stop them taking money from my fruit, and I think they should wear the great brunt of the state the industry is in now. I will give you a copy of a letter with an amount of money. They have a budget of over $3½ million. Most of that is R&D money, which I cannot stop them getting. They have done nothing with regard to quality of juice, the amount of juice that comes in or the chemicals that come in with the juice. You never hear them mention. I also have never, ever heard a processor say that Brazilian orange juice is cheap. I have never heard that from Golden Circle or National Foods, but I have heard Citrus Australia Ltd, citrus boards in each state and citrus grower bodies in each state keep parroting that it is cheap.

Two weeks ago the processors put out a press release saying they are 200,000 tonnes short of daily juice. That is daily, not concentrate. I think that figure is probably a lot lower, because years ago we were contracted to deliver about 300,000 tonnes of fresh juice. That is freshly squeezed daily juice. In their press release they said they have to import because we do not produce enough. That is a little bit sad. My neighbour next door just last week pushed all his valencias out. The neighbour on the other side has turned his off, and that family want to walk off their property. We are getting paid less than the Brazilian growers are getting paid, let alone the cost of that juice landing here in Australia.

I will give you an example. I took Nick Xenophon in to a food technician in Loxton. He worked for National Foods and Golden Circle. We had the TSE rate. All three of us sat down to calculate the landed price to a freezer in either Loxton, with one of the largest freezers, or Mildura—Mildura Fruit Juice Australia—and we were coming up with figures over $300 a tonne while, in that very same period, as a citrus grower I was getting paid $80 a tonne. We were told that the stuff is cheap but, in actual fact, if you add on all the costs to reconstitute it, paying the Brazilian grower, paying the processor, paying the trucks that take it to the factory, to ship it to Australia and to lift it off the wharf, and to store it frozen, all that adds up. They keep telling us it is cheap, but there are costs there. Citrus Australia Ltd and all the citrus groups have never looked at the juice industry.

CHAIR: That is not a bad opener. Anyone else?

Mr Punturiero : I might have misunderstood. I have made some notes out of some of the extractions. Do you want me to have a go at reading it?

CHAIR: Not necessarily. This is sort of an opening statement. You have a crack at it, but be brief.

Mr Punturiero : I will try and have a crack at it as best I can. We are a small business and we specialise in picking our produce, packing it and getting it to the export markets within five days. That is a big ask and it is achievable. So that means we have high-quality, fresh produce in the marketplace. We normally take two weeks to contact the AQIS person for them to give us registration of our packing shed. This year has been an absolute disaster because he informs me that I have got to pay $8,530 for registration for a pallet of produce to be sent by me to New Zealand. That equates to $8 a kilo, which is unviable for us even to attempt to try to compete against the big players. It is just not viable for us and not practical. The downside of that is that our customers in New Zealand and Hong Kong are not happy, and we give them good produce. Now I have got a dilemma: in the last week I have been contacted and they want a commitment from me to be part of their program of getting fresh limes into their marketplace as of next February. I was asked if what I commit to go through falls through. That is going to be egg on me. That means that I am going in there half-baked. I need some sort of commitment so I can assure them that I will be able to provide that same quality and same produce in X amount of days to their market. It is a value-adding exercise for our business and it is very important because there is an over-abundance of limes in this country. As in the past as to that $8,000 for the registration of our farm, we go through a broker. He is also paying $8,530 to do exactly the same auditing system, for him to export it overseas on our behalf. The aim was for us to gain the confidence and the capacity to do it ourselves directly and now we are in the dilemma that this is a very important turning point for us and we have put it on hold, as we cannot justify that expense.

CHAIR: Mr Smyth, do you have an opening statement?

Mr Smyth : The only reason I have done the trip to get here is that I am so disgusted by the way the industry is. When I look around at my local growers, and I am pretty involved with irrigation, and see what is happening it almost brings me to tears. I think it is beyond belief what is happening. It is all man-made. Whilst I do not have a lot of things to help solve these guys' problem, there are people around who do know and I hope that senators listen to them and I hope that you have enough power to do something about it.

CHAIR: We will go to Senator Xenophon.

Senator XENOPHON: I want to ask some questions of all three witnesses over three or four minutes. As for Mick Punturiero, I should disclose that in years gone by I have been a guest at his place, which I have disclosed on my register of interests. I have overnighted there. Mick, before, when for the seven years you were trying to build up a niche market for exports, you were paying something like $550 a year in registration fees to be an export facility—correct?

Mr Punturiero : Yes.

Senator XENOPHON: And the killer for you has been its jumping up from $550 to $8,530?

Mr Punturiero : Yes, that is this year's.

Senator XENOPHON: When I raised this on your behalf in the parliament and with Senator Ludwig, the former minister, the government said that there was some form of subsidy. But that subsidy would still mean you would be paying triple what you are paying now and it would peter out after a couple of years?

Mr Punturiero : Yes, but that is farming for this year and the hurdle of that is that I was advised I had to pay the $8,530 up-front and it was for me to go and try to get that balance back.

Senator XENOPHON: So it is an out-of-pocket expense and you do not want to be tying up your money before you get your refund?

Mr Punturiero : Yes.

Senator XENOPHON: You have also gone to the ombudsman. As of yesterday you have not received a response? Have you received a response late yesterday or today at all on it?

Mr Punturiero : I have not received anything, and also with the correspondence to minister for agriculture Ludwig. I have sent it everywhere and had no response at all.

Senator XENOPHON: I want to raise this with you. Your complaint to the ombudsman includes that the cost-recovery guidelines of the department have not been followed by the department itself?

Mr Punturiero : Yes.

Senator XENOPHON: We heard from some growers in Griffith yesterday who expressed a similar view. Are you telling me now that that export income that you have told me is so important for you to keep your head above water is just not worth you doing now. There is too much of a disincentive for you as a small niche exporter to get out there and export.

Mr Punturiero : It is very high-quality produce and small volumes. This is air freighted. This is not putting a bulk sea container and sending it overseas and whatever I get for it; this is price set and small volumes.

Senator XENOPHON: And the problem is $8 a kilo. What generally—without giving away any commercial secrets—is a price range for what you would get for your product overseas?

Mr Punturiero : It can range from $20 to $30—sorry, that will be—

CHAIR: Don't give it all away.

Senator XENOPHON: Just roughly.

Mr Punturiero : Between $20 and $30 a tray.

Senator XENOPHON: So $8 a kilo knocks you out.

Mr Punturiero : Yes, that is correct.

Senator XENOPHON: Where to from here? You have already ripped up 40 per cent of your trees from the drought—is that right?

Mr Punturiero : Yes. The so-called drought—yes.

Senator XENOPHON: When you say so-called drought, you ripped them up, because a lot of farmers could not afford to pay $1200 a megalitre for water?

Mr Punturiero : Yes, correct.

Senator XENOPHON: If the fees were on a sliding scale and were much more reasonable in line with what they were previously, would that give you the incentive to get back in there to try and get export markets in Hong Kong and New Zealand?

Mr Punturiero : Definitely, because then it would be more of a level playing field and it would be per kilo which everything is based on. It is per units.

Senator XENOPHON: You have said that the big corporate packing sheds have got an advantage over the small guys like you—is that right?

Mr Punturiero : Yes, because they are moving large amounts of units in—in the millions.

Senator XENOPHON: In terms of you being able to get product from the Riverland to overseas, can you do it in quicker time than the corporates?

Mr Punturiero : Definitely, yes.

Senator XENOPHON: Why is that; how does that work?

Mr Punturiero : We can pick it off the farm. Once we have our confirmed order from overseas, we can pick it, put it through our packing shed, put it on air freight and it is there within five days maximum.

Senator XENOPHON: Basically, you have got the same packing shed, which is accredited, but the fees for accreditation have just skyrocketed. Your packing shed has not changed—you are export accredited.

Mr Punturiero : Nothing has changed. It is only two-hour service we are talking about—two hours is $450 and now they are wanting $8,530 for the same two hours for registration on my shed.

Senator GALLACHER: Can we just put on record what the $8,000 actually means? What do you see for the $8,000?

Mr Punturiero : I have asked that question and they cannot give me an answer. They are just saying it is policy. It is the new cost recovery.

Senator GALLACHER: What was costing you $450, there is no difference in attendance, inspection or—

Mr Punturiero : It is exactly the same.

Senator GALLACHER: You get the same certificate.

Mr Punturiero : The same surface, same certificate, same everything; no change.

Senator GALLACHER: But now it costs you $8,500.

Mr Punturiero : For exactly the same thing.

Senator XENOPHON: You would not mind paying a sliding scale. If you were building up your market and selling more pallets and having a good year with exports, you would not mind paying more than $550.

Mr Punturiero : No, because the returns for me to export large volumes would be good and I could balance that amount across a large amount of units.

Senator XENOPHON: But right now you have given up on exports because it is too risky.

Mr Punturiero : Yes. I have not done any export for this season at all.

Senator XENOPHON: So you are going to lose that goodwill that you have built up over seven years—is that what you are worried about?

Mr Punturiero : Yes, because we were the first line producer out of this region to walk into the New Zealand airport with two cases of samples of our produce. I nearly got arrested over it.

Senator XENOPHON: Ron, you may have heard of the criticisms by some Griffith growers yesterday, quite scathing of Citrus Australia. Could you elaborate on what your concerns were? You mentioned a $180,000 fund. You have outlined that. Could you go into a bit more detail?

Mr Gray : Citrus Australia is something that has been opposed. It was put on us as growers. Now there is one change, which is voluntary subscription to be a member, but, because they get my R&D money, they obviously tell government that they have the support of the majority of citrus growers in Australia.

CHAIR: Could I just ask a really dumb question? When you say they were imposed on you, who imposed them?

Mr Gray : The South Australian representative body was imposed on us by the state agriculture minister. Gale Gago chose the new group, chose the people on it and growers were not given a vote. Citrus Australia Ltd was called the Australian Citrus Growers Federation. I did a freedom of information search and there was never ever a document to show that they could take levies from my fruit. Since I have been growing, they changed to a publicly listed company. I think they got a huge grant from the federal government to change over to this publicly listed company and now you cannot get on. As an individual small grower—

Senator STERLE: How long have they been around, Mr Gray?

Mr Gray : They have been around for two years.

Senator STERLE: And before that, the federation was around for how long?

Mr Gray : Thirty years.

Senator STERLE: We are just trying to figure out who imposed them upon you.

Mr Gray : It was done by the boards in each state. I got a freedom of information letter telling me that there was no permission ever given for them to take that money from growers, but each state had a board and each of those boards would take $5 or $6 dollars a tonne and pass it on to the Australian Citrus Growers Federation who, again, are accountable to no-one.

Senator STERLE: And they have been doing that for about 30 years?

Mr Gray : Thirty years, and look at the state of the industry. We used to grow 180,000 tonnes of valencias. It will be less than probably 30,000 tonnes this year. We were the largest citrus producing area in the Riverland. These people have $3½ million now to look after my interests. I do not know about you guys, but I have no say. I cannot stop them.

CHAIR: Who owns the shares? It is a publicly listed company.

Mr Gray : A publicly listed company and the majority of growers in South Australia do not even know anything about them.

CHAIR: If it is publicly listed, it is ASIC registered?

Mr Gray : Yes, I assume it is.

CHAIR: There would be a shareholder list, so could someone—

Mr Gray : It is Citrus Australia Pty Ltd.

CHAIR: Who owns the shares? Clive Palmer or you?

Mr Gray : I still get their magazine and have received this magazine all my life. I had to test this. I have never supported these people. To make it even sadder, I have neighbours whose father died about 15 years ago, and they still get the Citrus Australia magazine. He is not the only one. David King's father has been dead for 15 years and Citrus Australia still send David that magazine. I have told him not to tell them, just as an example to show you guys that they have no idea who they represent if they are sending out their magazine every month to dead people.

Senator XENOPHON: I have a couple more questions in relation to that. This is a question for Robert Smyth, as well as Ron and Mick. Fruit Juice Australia yesterday claimed that, if we had better food labelling laws to show whether it was local juice or imported juice—much better than we have now, with a misleading 'Made in Australia' label—it really would not make much difference because only 10 per cent of Australians would bother with more accurate labelling, in a sense. It would not change their buying patterns. They also said that, if we banned juice with carbendazim in it from Brazil, that it would destroy the fruit juice industry because there is not enough juice. So there are two things. Do any of you on the panel consider that accurate country-of-origin labelling would make a difference in your sales, in terms of the fruit juice price? Also, what impact do you think that reversal of the ban on carbendazim had on prices?

Mr Gray : I could answer that. It has been my passion for nearly 20 years, Nick. You are right: the parcel of fruit we have for fresh juice has shrunk—it has disappeared and growers have pulled it out. In Fruit Juice Australia's own statement two weeks ago they said they were 200,000 tonnes short for fresh juice. Ten or 15 years ago we used to be contracted to keep that fruit hanging on the tree. We would pick it each month to supply you guys with healthy, freshly squeezed orange juice. Somewhere along the line it became an easier business practice not to have a field officer, so in a cost saving measure now and the use of the current labelling laws they do not need very much Australian juice to put the carbendazim on the shelf to allow you guys to drink it. On that, it is a chemical I cannot use, yet these guys are telling you and our government has let it happen, Citrus Australia has let it happen. They are allowing our nice city cousins to drink carbendazim, yet I am not allowed to spray my oranges with it. If we are going to have a fair all-round thing, Nick, why can't I poison you as well as the Brazilians? I can't use the chemical. When there is nil tolerance on the chemical in this country what in the hell do we tolerate any of it in our orange juice? It just does not make any sense.

Senator XENOPHON: And what happened to the price when it looked as though the ban was going to stick and then it was reversed?

Mr Gray : If you were to make truth in labelling absolute truth in labelling, if you crushed every orange in this country now you would not satisfy the Australian juice market. It would turn it into an open market. They would have to come around and contract me and beg me to keep my Valencias on the tree because at the current labelling laws they are still not going to have enough. They need this 200,000 tonnes to blend with the carton and the water to call it Australian juice. To top it off, they now add aseptic use. If you read the cartons now—it has only just changed—it says that this product contains chilled juice, which up until I broke the story on aseptic juice was called aseptic juice. It now reads Australian fresh and chilled juice, which is the old aseptic juice. The price of oranges would go through the roof, which would also help my friend here because the juice price has always set a floor price in the market. If the packers know that the juice price is only $180 a tonne we get offered $200. It has always been like that ever since I have been growing oranges. The growers could have control of the juice market. The list of questions I have sent in to the committee have never been answered. How much concentrate do we import? When is it imported? There are so many questions on that important stuff that has never been answered.

CHAIR: Who owns the Mildura branded Berri?

Mr Gray : It is half-owned by the Chinese. Tanya Chapman stated last year in the last one of these meetings—

CHAIR: We has a series of bottles there yesterday and one was branded 'proudly Milduran' and in tiny writing it says it is from Wombat land overseas, fully imported. The interesting part was that it was 75 per cent water and there was about half a cent worth of water in the pack, in a two litre carton. At $1.80 or $2 a kilolitre it is about half a cent worth of water in the pack plus 25 per cent juice. It was 20c a litre cheaper than the pure juice. Don't ask me how that works. Do you know who lobbied the government to change their mind on the carbendazim ban? Someone went there—they might have had a very expensive bottle of Grange or something—to change the government's mind.

Mr Gray : I think Kate Carnell is the lobbyist for the food group.

Senator XENOPHON: She was.

CHAIR: So they approached the government, the government having previously decided like a lot of the rest of the world—can you fill it in, what countries do not accept that product?

Mr Gray : On my understanding, America has probably got the best rules as far as this goes. If the Americans found carbendazim in orange juice concentrate they stopped it immediately until the Brazilians could prove there was a nil content going to America. Here we stopped for a week, had the discussion and then continued to bring it in. When you talk about what is in a carton, I am really good friends with a food technologist. You can add sugar, which is really easy to detect. If you add fruit sugars, which these guys could be doing, which is really cheap—they bring it up from Melbourne in big tankers and you can add that to orange juice undetectably and you can make one tonne into two and three tonnes. The industry is so corrupt I think a brothel is run better. At least when you go in there you know what you pay for—

CHAIR: No, we do not want to go into that. Too much detail. I must put on the record I have never been to a brothel or played a poker machine in my life.

Senator STERLE: It is a very important question that the chair asked. If you don't know, please do not assume. Could you tell us who was lobbying when the one-week suspension was put on the concentrate from Brazil because of whatever the name of the chemical is.

Mr Gray : My understanding was it was Kate Carnell.

Senator RUSTON: Mr Gray, you were talking about the aseptic/chilled juices as if they were a bad thing. I saw the Channel 7 program a couple of years ago when you raised this matter. My understanding was that aseptic juice or chilled juice, as they now call it for obvious reasons—because it sounded like toilet water with the previous name—was Australian juice.

Mr Gray : You are right; it is Australian juice. How it is used at the moment from a grower's perspective is for predatory pricing. When I start growing my quality orange for export the juice companies make an offer for that juice. It is not the equivalent of an imported price. It could be as low as $40 a tonne, so the processors will take it at $40. It is obviously about a quarter of what they are paying for the imported. That will cover their freight from Loxton to Mildura, which is one of the few places that can put it in an aseptic bag and then it is brought back and stored in Loxton. It keeps for 12 months. It is an Australian product.

I could only find one grower in Renmark—Mr Tim Whetstone—actually doing it. He was actually putting his valencias into aseptic bags and then on selling them to a company which I think was called Charlie's juice. He had an advantage. The majority of growers had no idea that the cool stores in Loxton were full of this stuff called aseptic juice. This product damages the vitamin C. They have to re-add vitamin C to it. It is basically like long-life milk. But the majority of growers were not aware that this exists. The processors were using this as a way to buy our fruit for next to nothing, do the treatment, shoot it back to Loxton, put it in the cool room for nil cost because they bought it for only $40 a tonne. By the time they did all of that they were way in front.

Tim Whetstone stood up in state parliament and said that I damaged the industry with that story. My wife and I were getting zero dollars a tonne for our juice when that story went to air, so my question was: how much more damage could I do? Nothing.

Senator RUSTON: Yesterday a number of growers from Griffith made the statement that, even when they were offering their citrus to the processors for nothing, they were not taking it because it was cheaper to bring the concentrate in from overseas, carbendazim-laced or not—

Mr Gray : I did some research on that too.

Senator RUSTON: You are welcome to put your own advice. The end of my question was: surely it is better to be looking at a process by which Australian product can be treated in some way that we have 12 months a year's supply of Australian product because it does not have carbendazim in it, it is coming from Australia so the Australian consumer knows that the product is meeting Australia's really strict health and safety standards for food handling and it is taking Australian growers' product. I take your point that they are buying it very cheaply. I just wondered why there was such a focus on this juice in the absence of the concentrate that was coming in from overseas. I thought it was a product we could have worked with to get some benefit for Australian growers through.

Mr Gray : Yes, you can but no Australian growers I could find were aware of the process except a select few. So it was only being used for predatory pricing. I agree it is better than the imports so long as the consumer knows and the Australian growers get a benefit. The majority of growers did not get a benefit from the aseptic juice. What we used to do is store those oranges on the tree. My wife and I would work out that if we had 100 tonnes we would sign up with the processors to pick 10 or 20 tonne a month. The safest place to keep it is on the tree. I agree with you that it would be good. You mentioned the words 'cheap Brazilian orange juice' again. I need you to show the other senators how you came up with even saying that it is cheap. I need somebody to show you guys the actual cost of this cheap juice landed at Jeff Knispel's in Waikerie and up here in one of the processors.

Senator RUSTON: You don't think it is?

Mr Gray : I tried to import it. I got together with a guy and a truck driver, but the cost of freight—they come on a pallet of four 44-gallon drums. Then I went to see a food technician, and he said, 'Ron, you can't just add water and give it away.' I was going to give it away in Adelaide with Nick Xenophon. The food tech said, 'Ron, you're going to have get some colour.' I said, 'What are you talking about?' Brazilian orange juice is bright yellow. If you drink any long-life orange juice in Europe you will see it is not orange like ours; it is very yellow. I said: 'How do I do that? Citrus colouring is very expensive.' He said, 'You'll probably have to blend it with at least 10 per cent or more of Australian concentrate, or whatever, to get the colour that Australian consumers like.' We like orange orange juice. So there is another added cost. I thought I would be able to add water, go down to Rundle Mall and give it away.

These are the costs that you guys never hear of. The average grower does not hear of them. You cannot just add water and drink it. There is no pulp in Brazilian orange juice. It is literally a barrel of liquid sugar. If you want some little bits and pieces in there so you think you're drinking orange juice you need Australian oranges to get the pulp to add to the Brazilian concentrate to make it palatable. Some people do not like pulp, but the majority of people think orange juice should have a few little bits in it.

CHAIR: Is the difficulty at the supermarket price, rather than what is in it? Is anyone going to bother with what is on the label as long as it is the cheapest?

Mr Gray : Even at the cheapest I am still getting done.

CHAIR: But if you do not know and we do not know what price it is—by the way, there is some seriously bad corporate behaviour, as I have discovered in a wheat inquiry that we are doing. In Brazil they are not all angels in a corporate sense, I can tell you. If I were they, and I had a room this size—I used to have storages, and I had a couple of freezers this size—

Senator STERLE: Were they this cold?

CHAIR: Nearly as cold as this. If I sent some to the United States and they said, 'Sorry, old mate, it's got carbendazim in it,' and I still had a freezer full of it back home, would it not make sense for me to then say: 'God help us, that Kate Carnell's done a good job in Australia—we'll send it to Australia. What does it matter if we sell it at below cost? We are getting rid of it, and we've got to clean the room out.' How will we now they are not dumping it here if we do not know the price?

Mr Punturiero : That is the problem: we don't.

Mr Gray : Talking about the price of this concentrate, they say they did not want it. Many of these guys are trying to plan on a summer. They are trying to get their stocks into freezers but they do not want to bring too much in, or too little. What happens if they overimport is that they are going to use that stuff that is in their freezers. That is why they can have a season—'Let's bring in enough so we create an oversupply and then we'll get the rest from the other silly growers for next to nothing.'

CHAIR: Would a normal person standing in that corner over there, listening to this and having nothing to do with it, not think, 'Why hasn't the industry or their representatives gone to the trouble of finding out whether this is being dumped and bring on a dumping action?'

Mr Gray : I probably look and sound stupid. I went to a Citrus Australia meeting in Loxton 12 months ago. I put the same argument I am putting to you. The chairperson Tania Chapman could not answer one of my questions. You have hit the nail on the head: where is the person? In Brazil, the University of Sao Paulo tries to negotiate with all the import costs in a formula to come up with a price for the Brazilian growers. In Australia we have Citrus Australia—at its annual conference the major sponsors are Golden Circle and National Foods—and they have never, ever tried to analyse, to start from the process and work out those costs. They are not going to get it right; in any market there is no formula you can always use because the imports always change. But wouldn't it be great if we had Citrus Australia monitoring the imports and coming up with a price for us?

CHAIR: Anyhow, someone ought to get of their asses and do it. We are dealing with SPC. Several 800,000 or 900,000 trees are to be bulldozed if they do not get it sorted, and the dollar going down is helping. But four years ago New Zealand brought on an action which was an antidumping procedure in SPC's canned industry. I am amazed that, given what has happened, and especially when you see the logic of a product—75 per cent of the prawns that come out of a certain part of Asia and Japan are banned for antibiotics, but they get sold somewhere else round the world where the threshold is lower. I guess we are the lower threshold—we are the soft entry point for this stuff that has carbendazim.

Senator RUSTON: Mr Punturiero, when was the first time you found out that your registration fees were going to increase this year, albeit with the rebate?

Mr Punturiero : Two weeks before I started to pack for export. That is the normal procedure. You are given two weeks notice so that you can book in for a certain time.

Senator RUSTON: As you would be aware now from subsequent discussions, the issue of moving to full cost recovery was something that had been flagged a couple of years ago. During that process, did you not through any mechanism whatsoever ever get advised by your state body or your federal body that this was where we were heading to?

Mr Punturiero : There was apparently a letter from the department advising us of a change which we never received. They claimed they sent it to us. We were probably a little bit naive because we were of the understanding that this was to do with exporting into the USA, which has no relevance to us. It is big sheds. We did not bother about following it up. You could hear bits and pieces about it on the radio. But the only time we actually got the hammer smacked on our heads in relation to this $8,000 was two weeks before I booked AQIS to come to my shed. I could not believe him. I was pretty rude to him. I said, 'Obviously you have the wrong packing shed.'

Senator RUSTON: Can you give us a quick rundown on what AQIS actually do when they come to your shed to do this $8,530 inspection?

Mr Punturiero : They have a tick-a-box spreadsheet they follow. They check the hygiene of the sheds. They check that your plan for your property is up to date. They are very thorough.

Senator RUSTON: How long would it take them to do it?

Mr Punturiero : I work on two hours, but he can get out of there in an hour and a bit. It depends how much he wants—

Senator RUSTON: Is it just one person?

Mr Punturiero : Yes, one person.

Senator RUSTON: So one person for one hour is $8,530.

Mr Punturiero : Yes. I put two hours in my report, but it depends how much he wants to talk to you.

Senator RUSTON: Mr Gray and Mr Smyth, do either of you export?

Mr Gray : It is too costly—

Senator RUSTON: So you are not a certified premises in your own right?

Mr Gray : No.

Senator RUSTON: So this issue does not apply to either of you two?

Mr Gray : No.

Mr Smyth : No.

Senator RUSTON: Mr Smyth, you say in your submission that the industry has gone to you a very bad place and it is all man-made. Can you give us a bit of an idea of what you mean by 'man-made'?

Mr Smyth : I will be as brief as I can. It is basically to do with imports we cannot compete with. Whether it is wages, electricity, fuel, all of our inputs are so much higher than those of our competitors. With wages, I heard that it recently went to $2 an hour. That is what we pay in work cover alone. Then you have insurance and holidays. With all of this stuff going on we just cannot compete with it.

Senator RUSTON: The point of the question was: what is able to be done about it? Nobody wants workers to get less in wages, so what are the things that you think we should be doing that could be done to reverse the man-made problems that we have—

Mr Smyth : I think Ron and Michael have mentioned a few already. I support what they have been saying. I think this free trade is a load of rubbish. The global playing field is not level. It needs to be sorted out. We have been talking about it for that long, with labelling laws and so on. It goes on and on and on. I will not repeat what I have already said, but I think it is pretty simple stuff. In fact, I heard Clive Palmer on the radio as I was coming up yesterday. He made things sound pretty simple; he really did. I said to my wife, 'That sounds simple. Take the politics out of stuff and things might happen.'

CHAIR: Although we are under privilege here, I will not take the bait! We are running out of time.

Mr Punturiero : I will be very brief—

CHAIR: Senator Madigan has a question and I am sure Senator Colbeck has one—quick.

Mr Punturiero : Ron had a really good point. We are at their mercy because they are telling us that there are cheap imports and this cheap concentrate. No-one has any records of what that price is, but one thing I can guarantee you: I rang a juice company in South Australia, and I said, 'Look, I've got lime juice here available fresh off the tree,' and he said to me, in his exact words, 'Nineteen cents, take it or leave it, because that's what I can get it for, landed in Adelaide.' Nineteen cents—

Senator STERLE: A litre?

Mr Punturiero : a litre.

CHAIR: Landed from where?

Mr Punturiero : He did not say. He can get it, no worries.

CHAIR: It might have been a farm that was—

Mr Punturiero : Overseas.

CHAIR: subsidised by hemp growing.

Mr Punturiero : I am not sure. I cannot say. The interesting part, and why I am telling you this, is very, very important: two to three weeks later that same company was on the phone to me asking me whether I could do it for 60c a kilo—60c was merely to cover costs and all that stuff. He was begging me to do this deal to help him out, at 60c. So, as Ron was saying, what are these prices that this contract came in at? It cannot be 19c. It is bullshit.

CHAIR: The good news is that I have just cancelled my flight to Sydney and I am staying till the end.

Senator COLBECK: Mr Punturiero, I just have one question. Can you give us a sense of the total value of your export markets?

Mr Punturiero : The total value would be a very difficult ask for me, because how many units have I got to send?

Senator COLBECK: Let us go back to the last year. In the last year that you exported, what was the total value of product that you exported?

Mr Punturiero : I do not want to make that comment because if I get it wrong it will be misleading.

CHAIR: I do not want you to get in trouble with the tax office.

Mr Punturiero : I feel it is irrelevant.

Senator COLBECK: It is relevant in this context. Senator Xenophon is aware of this because we had this conversation earlier in the year at estimates. I have a constituent who is a cherry grower. Their total export sales are about $36,000 a year. That is their total market. So that is why I am asking the question.

Mr Punturiero : Okay, then I can answer that.

Senator COLBECK: Then what I do is relate that back to $8½ thousand, and it is about 25 per cent of their total export sales, which gives me a context of the cost versus the value of their export market, so that is why am asking the question.

Mr Punturiero : Fair enough, okay. Now you have given me the context. It would be approximately $20,000 to $25,000.

CHAIR: And 8½ for the—

Mr Punturiero : Yes, but that is the previous year. You have to understand. You have to be fair. That is the previous years of sales. This year my window opening was closing every day, meaning that from $25,000 it could be around $10,000, because my window is closing down very rapidly.

Senator COLBECK: That is because of a change in the market, but I am just trying to get a sense of what your market was before the change in the fees arrived, and it was about $20,000 to $25,000 in annual sales.

Mr Punturiero : Yes, but it had nothing to do with the actual markets; it had to do with my window of opportunity. My window of opportunity to New Zealand and Hong Kong is four weeks exactly—four weeks.

Senator COLBECK: Yes, but that has changed because of your decision making around whether you are going to pay the fees or not.

Mr Punturiero : To decide: do I spend the eight grand?

Senator COLBECK: I understand that.

CHAIR: I am going to end the circle. Senator Madigan.

Senator MADIGAN: Mr Punturiero, you have elaborated on this $8½ thousand. I think the point you are trying to make to the committee is that you cannot amortise the cost of $8½ thousand over the amount of product that you send out of the country—

Mr Punturiero : Yes.

Senator MADIGAN: as opposed to, say, if it was a larger company that is shifting 50 pallets. It costs them an average of, say, $160-odd a pallet. In your case, if you send two pallets, it is costing you $4,000 a pallet.

Mr Punturiero : Exactly.

Senator MADIGAN: So what you are saying is that one size shoe does not fit all.

Mr Punturiero : That is why I am here. That is exactly right. It is nothing to do with price.

Senator MADIGAN: And the other point that you are making is that there is no level playing field; there is no fair trade. The facts are that we have signed up to these agreements that do not compare apples with apples; that you blokes cannot use these chemicals—you do not wish to use these chemicals either; and that there is no comparison between the product you are making and the product that is coming into the country.

Mr Punturiero : That sums it up pretty well.

CHAIR: Thank you very much for your evidence. I now understand why a couple of your old mates went up to Carnarvon to do business, beside the fact that I think they might have been in trouble with the boys in blue! Thank you very much. Obviously this is not the end of it. It is pretty valuable for us to get on-the-ground experience from guys who actually have the issues under their fingernails rather than in a brief from a department. Thanks. Is there anything you would like to finish with?

Mr Gray : Yes, just quickly. I gave you a list of questions in my submission. Perhaps you could ask those who follow to answer any of those questions, and then you will get an idea of why I am so frustrated. There is the car industry. As a grower—and I have been trying to change these labelling laws for a long time—I do not want any money; I do not want anything. All I want is for what I grow to be clearly labelled at the front of the product.

CHAIR: Wouldn't it be fair to say that—and we must finish—having a carton of 25 per cent juice and 75 per cent water that has 'Mildura' on it, the average punter will think it comes from Mildura? But it does not.

Mr Gray : It is owned by the Chinese.

CHAIR: It is bloody craziness.

Mr Gray : The Mildura Fruit Company is half owned by the Chinese.

CHAIR: Thank you for your evidence.

Senator STERLE: We can ask them at 12.45 when they will be here.

Mr Punturiero : I really am pumped about coming all the way down here, and I hope that we have given you enough so that you can—

CHAIR: We have to keep going or we will run out of time.

Mr Punturiero : Thank you very much for having me here.

CHAIR: God bless you.

Mr Punturiero : God bless me? Okay. Do you reckon I will need it?

CHAIR: No, you do not. You are big enough to look after yourself!