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Tuesday, 26 March 1968


Mr PEARSALL (Franklin) - I support the motion for the adoption of the Address-in-Reply and congratulate the honourable member for Henty (Mr Fox) on his typically thoughtful contribution in moving the motion. I congratulate also the honourable member for the Northern Territory (Mr Calder) on his speech in seconding the motion. He is to be congratulated for his persistence in winning for this vast and important area of the continent, which he so capably represents, the democratic right for its member to cast a vote on all matters, and not just parochial matters, that come before this chamber.

I join with other honourable members in paying my humble and sincere tribute to the late Prime Minister. Many honourable members of this House owe their political existence here to his dedicated leadership and inspiring example. Several honourable members have referred to the manifold problems confronting the primary industries of this nation. The position in which many farmers find themselves today cannot be exaggerated. Perhaps never since the depression years of the late 1920s and early 1930s have they faced so many or such complex problems. The price of wool not only limits the income of, and further development by, the farmers in this industry, but materially and adversely affects our overseas balances. Because of the magnitude and duration of the present drought, breeding flocks and cattle herds throughout all of the south eastern States are being decimated. The small fruit industry in Tasmania is faced with ruin unless something is done in the immediate future to guarantee a stable market and stable price for the produce. The dairy farmer producing butter is now confronted with real problems, necessitating a provision in the Governor-General's Speech designed to allow many uneconomic properties to be absorbed by others in an effort to create greater stability within the industry.

Freights on all exported goods are constantly rising, and the effects of the devaluation of British sterling have given rise to additional apprehension and conjecture, in addition, of course, we are confronted with the possibility of the British Budget still further adversely affecting Australian primary industries. This sequence of events is occurring because Australia has an embarrassing over-production of food. Yet we live in a starving world. Most of the products which 1 have mentioned are produced within an economy of ever rising costs for the use of a market which, even if dependable, is uncertain as to the financial return which the producer can expect. Britain has been looked upon as the traditional market for many of our primary products. We look with concern at her efforts to join the European Economic Community. If those efforts are successful they will give further rise to uncertainty and misgiving within this industry.

The problems confronting fruitgrowers in Tasmania and affecting the very future of the industry have never appeared greater than they are today. Many of these growers were affected in varying degrees by the bush fires of February 1967. These were followed by the drought, which still persists in many parts of the Commonwealth. With commendable courage and fortitude and a lot of help from this Government, the orchardists have turned their hands to the task of rehabilitation. They have replanted and reworked their orchards and have produced

The result of the fruit season is of paramount importance to all of southern Tasmania. The economy is closely and dependency geared to this industry. There are more than 1,000 growers in the south of the island alone who are vitally concerned with the future of the industry and its immediate prospects. Also there are many people who form the labour force which is dependent on those 1,000 growers. The fruit growing industry is a generator of a tremendous labour force which is needed for the meticulous handling of this important crop. Many thousands of people are connected indirectly and directly with the industry. It requires a large labour force to grow, pick, grade, pack, deliver, ship and market the crop. The supply of sprays, machinery, equipment, fertilisers and packing and packaging requisites is inseparably bound to the welfare of this important industry. The annual value to Tasmania of the apple and pear crop has ranged over recent years between $16m and $20m. The fruit crop provides between 45% and 60% of agricultural earnings for the State and represents more than 15% of the total income from all primary industries in Tasmania. Total apple exports from Australia in 1966 were 8i million bushels, valued at almost $26m. Tasmania contributed 6i million bushels, valued at almost $19m. Tasmania's contribution represented more than 72% of Australia's exports. Those figures may serve to illustrate the paramount importance of this industry to Tasmania and the equally important role it plays in Australia's export earnings.

It would be a calamity of major significance should any disaster in marketing befall the industry. Costs over which the grower has no control are constantly being loaded upon him. The time has now come when he can no longer absorb these costs. Some form of financial guarantee is a pressing necessity. A recent cost survey by the State Fruit Board reveals a minimum cost of production of $2.28 a bushel. If one adds the small figure of 40c for the grower's wages and management costs, 5% for the capital value of his holding, and 1\% for depreciation on plant and machinery, the cost of production rises to $2.92. 1 would suggest that these figures are in no way extravagant. In fact, the whole survey is somewhat conservative and, of course, most of the cost figures are actuarial.

The export season has now commenced and the average forward sale price, which will affect about 10% of the crop, is $2.40 f.o.b., leaving nothing for the grower. It is estimated that approximately 70% of the crop will be sold under the system of guaranteed advance. This advance averages $1.10. The remainder of the crop will be exported on open consignment. These figures illustrate the grave problem which confronts the industry in Tasmania. As against an inescapable cost of $2.28 the grower is assured of a guaranteed advance of only $1.10, which is not even 50% of his cost of production. He is then left to await the outcome of a market 12,000 miles distant and a selling period of 5 to 8 weeks hence. This situation has created in the industry feelings of doubt, uncertainty and frustration. Some growers may be forced out of production by circumstances over which they have no control. Such growers may not necessarily be the least efficient growers. Future investment in the industry may be looked upon as nothing more than a gamble. Any decline in production must mean loss of income both for the State and for the Commonwealth.

I believe that some form of financial guarantee is essential. Such a guarantee would give incentive and purpose to an industry which at the moment is beset by doubt and apprehension. Such a guarantee would ensure Tasmania's ability to meet its export quota and would permit growers to forward their fruit with confidence. The Commonwealth Government would be required to make a financial contribution to the industry only when market returns are known and the position can be surveyed against a known background. I therefore urge the Government to take this action, which is the only course open to ensure stability and confidence within the industry. The industry is unanimous in its contention that such a course of action is necessary. Producers, exporters, the State Fruit Board and the State Government are of one mind in the request which I make today on their behalf. I am reliably informed that a formal application for such a guarantee has been made to the Commonwealth. Should a guarantee not be given I am afraid that thousands of bushels of fruit will drop and ruin and hundreds of growers may face bankruptcy. Due to the drought in other States it is possible that difficulty may be experienced in filling space quotas in those States. When and if this happens Tasmanian growers will be asked to make good any short fall in space so that the benefit of the 10c rebate may be obtained. Tasmanian growers can and will step in and fill the quota if this form of guarantee is provided.

I would point out that the industry is seeking this assistance only for this season and because of rising costs over which the grower has no control. The freight increase was imposed despite the protest of the Minister for Trade and Industry (Mr McEwen). Other unknown factors which may affect the industry include the effect of devaluation of sterling on this season's market and the effect of the United Kingdom budget, which could compound the problems confronting the industry. A more positive and lasting solution may be found for future seasons by one of the committees currently investigating the industry's problems. An industry assistance committee, comprising three growers, one from Tasmania, one from New South Wales and a pear grower from Victoria, as well as an exporter, a shipper and a member of the Australian Apple and Pear Board, has been established. It is endeavouring to devise ways and means of placing the industry on a better footing for future seasons. A committee of investigation has been set up by the Australian Apple and Pear Board. That Committee has taken evidence in Sydney, Brisbane, Melbourne, Adelaide, Perth. Hobart and Launceston. It comprises three people with many years of experience. They are Messrs Critchley, Lloyd and Sargeant The committee commenced its investigations only last September but has already submitted an interim report.

So I submit that the industry is doing all within its power to find a long-term solution to the problems that confront it. I believe that while we in Australia are faced with ever rising costs, over which we have no control, and while we are dependent upon a distant and unpredictable market, there is a need for some form of assurance which will allow growers to proceed with confidence to grow fruit, knowing that they are assured of a just reward for thenlabours. I would point out that the guarantee that is being sought is not dependent entirely on the possible effects of devaluation. The present situation in the industry was brought about by a combination of problems over which the industry has no control but which have been thrust upon it. I have pointed out briefly in passing that one of these problems is the increase in the cost of freight. The Deputy Prime Minister expressed some concern about this. Yet, while he was in the process of expressing concern, members of the Apple and Pear Board conferred with the Conference Line and agreed on freights to be charged for this season's crop. This agreement, of course, resulted in another increase which inevitably will be passed on to the grower. I wonder how much longer this can possibly go on. However, this is the intolerable situation in which the fruitgrower finds himself at the present moment.

The industry is of paramount importance to southern Tasmania and plays an important part in the economy of northern and north-western Tasmania also. Should anything befall this industry it could result in a loss of our overseas markets which would be a loss not just for this season but could well be a loss in perpetuity. This cannot be allowed to happen. In the GovernorGeneral's Speech mention was made of steps to be taken to consolidate the dairying industry, an industry which has enjoyed over the years a subsidy which annually runs into many millions of dollars. At long last we are facing up to this proposition. We do not want to create a set of circumstances in which a dairy farmer will be helped to overcome his problem while the fruit grower may have only one alternative as a form of production, that is, to resort to dairy farming. The only other alternative for the fruit grower is to sell up his holding in country areas and be forced, as the honourable member for Mallee (Mr Turnbull) has just said, to move into the city. It will be little short of a major tragedy for Tasmania if this situation cannot be resolved.

In many of the sophisticated countries today - America in particular and, to a lesser degree, England - they have found it necessary to give some form of assurance to primary industry and to the person who produces primary products. There was a time when we could take a gamble, when the industry had the inbuilt capacity to be able to absorb one season's loss in perhaps three seasons. This situation no longer applies in our primary industries. The time has come when not only the fruit industry but also many others will need some form of guaranteed advance which will finally have to be resolved in accordance with a realisation of the world's markets. Steps have already been taken to investigate the potentialities of other markets further to our north and no doubt our markets there will increase. We live in a part of the world where the living standards are such that our potential markets are unable to pay at a figure which equals our high cost structure. But this high cost structure is not the fault of the industry; in many respects it is due to costs which have been thrust upon it. I hope that the request which has come forward to the Government will be viewed sympathetically. I have mentioned in the remarks 1 have made so far only the actuarial cost of production survey which has been undertaken into costs in the industry. Many of these costs are beyond the industry's own control. I have not mentioned the incidence of freight cost which has risen this season to the astronomical figure of $2.34 for the shipment of a bushel of apples from Tasmania to our United Kingdom market. This figure is arrived at by negotiation between the Board and the Conference Line.

I feel that the time has come when the freight increases and the other cost burdens which are being imposed upon the industry can no longer in fairness be borne. 1 ask those Ministers who are to make a decision as a result of the approach which has been made by the Tasmanian Government, with the full accord and complete support of all those associated with the industry, to realise that they hold in their hands the destiny of the whole of the fruit industry in Tasmania. 1 ask them to realise also that this is one of the means whereby this industry can be saved. I have not exaggerated the situation in any way. Before rejecting the application which has been made and which at this moment will not cost the Commonwealth Government one single dollar but will inject into the industry confidence foi the Tasmanian grower, I ask them to consider what I have said. Then the whole matter can be reviewed in the light of market prospects, devaluation and all the costs which the industry has been asked to absorb. I urge those responsible before making a decision to make any investigation that they consider necessary and to seek the views of the Tasmanian Fruit Board which,

I am sure, will be in a position to confirm the picture which I have painted today, bleak though it is. Some solution must be found for the future of this industry which plays such an enormously important part in the economy of Tasmania and plays its role in the welfare of the Commonwealth.







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