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Wednesday, 6 October 1971
Page: 1933

Mr KENNEDY (Bendigo) - I wish to support the amendment moved by the Opposition to this Bill. I dp so because I am concerned about the financial position facing fruit growers in my own electorate in particular at Harcourt and the future of the townspeople whose livelihoods depend so much upon the growers. I have already spoken on the position facing Harcourt. I would merely add in' general reference to the position of fruit growers in Australia that their incomes are in the vast majority of cases totally inadequate by today's standards. Costs of all goods and inputs are escalating, and prices andprofits are diminishing. The uncertainty of present overseas markets leaves a large question mark over Australia's fruit growing areas. This very serious economic position one of stagnation is affecting fruit growing towns and contrasts markedly with rising profits and wages in other sectors of the Australian economy.

Growers are leaving their properties, many of them heavily ensnared in debt which has been aggravated, in the case of Harcourt, by a series of natural disasters including hail, frost, wind and . fire.

Orchards have been bulldozed and properties are up for auction. The employment situation is very grim, and the threat of depopulation hangs over the area.' The future of Australia's apple and pear markets is very much in doubt. The United Kingdom takes about 55 per cent of our export apples, which are admitted duty free. But competition from our main rivals South Africa and New Zealand has intensified, and Great Britain's possible entry into the European Economic Community will mean not only the loss of our concessional entry into the United Kingdom but also the impositionof tariffs on our imports, with the removal of tariffs on exports from the EEC countries. To face these threats, Australia will have to concentrate more on the production of those varieties and sizes of fruits that are most popular in our export markets. It is good that much has already been done in this matter by growers themselves.

It may perhaps also mean that increasing quantities of apples and pears will be used for processing to save them from the hazards of seasonal fluctuations in supply and demand. We will also have to act with more imagination and vigour to diversify our trade outlets in the Asian area to take up the. slack that will arise in the United Kingdom and Europe. I pay tribute to the growers who have already made economies in picking and packing, for example, to reduce costs. But they will always be at the mercy of exporters and shipowners. Against these, only the Government can take effective action. In this context I join with the honourable member for Braddon (Mr Davies) in expressing concern that the support prices in this Government's stabilisation scheme are related to f.o.b. returns and have no relation in particular to shipping charges. There is no doubt that the Commonwealth Government must fight the shipping combine which is now demanding a vicious 24 per cent increase in freight rates. The Government must support the case of the Australian Apple and Pear Board. If the Government does not do this then I believe that it should protect the growers against these savage freight increases by subsidising the freight rates or by including freights as one of the costs in the stabilisation scheme.

There is no doubt that the increases demanded by the shipping lines will almost cripple the export of Australian apples and pears. The increase could mean the addition of about 40c to 50c to the cost of a bushel of fruit. This has come at a time when returns on the 1.5 million pears exported from Victoria last year were only marginal and when the . export of some 645,000 bushels of apples this year will draw on the federal stabilisation scheme to the extent of about 45c to 47c a bushel. Little wonder that Tasmanian growers have been advised that if the freight increases are allowed it will be worthless, indeed ruinous, for many growers to export their fruit. It would be more advisable to let the fruit rot on the trees. I stress that it costs approximately $6.24 to put a case of apples on sale in England, that is, from the Australian grower to the shop in the United Kingdom, but of this, $3.33 is eaten up in shipping and marketing charges. This is the sacrifice that the Australian apple and pear growers have to make.

I would like to refer briefly to the formula of stabilisation in the Government scheme in which a maximum of 80c a bushel is the maximum support for a total of 4.4 million bushels sold at risk. The Bill allows for a review of the support price but not for the rate of stabilisation. I believe this is a very unrealistic situation and it can only mean greater hardship for growers in (he future. Why was the figure of 4.4 million chosen? After all, some 70 per cent of apples and 45 per cent of pears are exported at risk these days. There is every reason to believe that the level of exports will continue to be around 10 million bushels. The amount exported on consignment this year was around 7.5 million bushels. So where does this leave the maximum offer of 80c, which sounds so impressive? As the honourable member for Braddon and the honourable member for Dawson (Dr Patterson) pointed out in the debate yesterday any excess above the 4.4 million bushels will diminish the maximum price. This will be totally unrealistic to the Australian producer. Thus, if the support is for 7.5 million bushels and not for 4.4 million bushels then the support to the grower will prove to be about only 47c a bushel if his fruit does not reach the price set in this Bill. This will put growers in a hopeless position.

Australia can give very substantial protection to its secondary industries; it can give a very effective stabilisation plan to wheat growers; and it can provide fairly effective schemes such as the dried fruits stabilisation plan, the dairy industry stabilisation plan and the tobacco stabilisation plan. We can also offer a deficiency payment for wool of quite substantial proportions. Yet the Government so far has refused to give similar security to apple and pear growers. This is why the Opposition believes it is essential that a more realistic figure for the rate of stabilisation should be provided, and accordingly it will move for a review of the rate of stabilisation.

I would like to support also the Opposition's call for the establishment of a single statutory national marketing authority. I am surprised that so much opposition has been recorded by Government supporters to this proposed amendment. Government supporters continually talk about the growth of bureaucracy and the danger from big brother when such an authority is not only essential for the apple and pear industry but also actively sought by growers themselves. I have never yet heard any Government supporter complain about the bureaucracy and big brother characteristics of the Australian Wheat Board, and very rightly so. Yet they are all now making the same fuss about the establishment of a marketing authority for apples and pears that they made before the establishment of the Wheat Board.

The simple fact is that the present marketing of apples and pears overseas is unco-ordinated, over-complex, archaic and costly. The first victim of this outdated system of private enterprise marketing is the Australian apple and pear grower himself. A multitude of exporters compete with each other or co-operate for private gain in the marketing of this invaluable Australian resource. Some 19 of them are involved in Tasmania alone. In marketing this involves quite unjustifiable extra costs that could be avoided - both in Australia itself and on arrival at the overseas port. We find, for example, that if the fruit is not unitised it may be confused and mingled in storage on board the vessel and may have to be sorted out again on arrival overseas. One could mention that in some cases the comparatively long delay in arranging the packages after they arrive at the port may mean that the fruit arrives at the shop perhaps less attractive than that provided fresh by our foreign competitors. At the same time, it is nonsensical that Australian fruit should be sold overseas Under about 150 brand names. This is private enterprise gone mad. lt is particularly Unjustifiable given the use of one brand name by New Zealand and South Africa whose fruit is exported by a single marketing authority in each case.

Apart from the economy and efficiency that can be obtained by the means mentioned, a single marketing authority could also speak for the entire industry with a single voice and, as the Government has said again and again, this is just what it likes to see and hear. There is no doubt that this would strengthen Australia in its exploitation of present markets and its pursuit of new markets which will be needed in particular if the United Kingdom enters the European Economic Community. Also it would strengthen the fruit industry in its negotiations with shipping lines over freights as all growers would be speaking as one through the authority and the authority would be that much stronger. There is no doubt that the Australian Wheat Board has been outstandingly successful, when Government political policies have not obstructed it, in its consolidation of existing overseas markets and in its search for new markets. There is no reason why such a body should not provide ' the same benefits for Australian fruit growers. 1 have no doubt that apple and pear growers cannot get the maximum return possible on their produce so long as the existing marketing system continues. It urgently needs overhauling, not in the name of increased bureaucracy but for the sheer well-being of producers who are at present in serious straits, and in the interests of the well-being of Australia. South Africa and New Zealand have learned only too well the costly lessons of having multitudes of middle men between the producer and the purchaser.

Australia urgently needs new ideas and new methods. Other economies that could be made and passed on to the grower would include the purchasing of fertilisers, packing materials, sprays and so forth, because they would be handled by the one authority. In particular a strong single statutory marketing authority is essential to provide leadership in the industry and to plan ahead for the future. Many growers have pointed out that there is no single authority within the whole industry which can identify all its problems, make recommendations on how to tackle them and then supervise their carrying out. The future of the industry demands a positive sense al direction and positive leadership. The lack of this can only hinder the industry. For example, the industry lacks the means that such an authority could' provide to tackle rising costs and unnecessary costs at their roots, and can only try to keep up with these after they have been caused. So this scheme before the House, like most Liberal Parry schemes, accepts the unnecessary wastefulness and costliness beyond the growers' control in production, presentation, financing, shipping, marketing and so on, and leaves the grower completely exposed and largely unable to prevent them.

The Labor Party believes that just as there should be one single statutory marketing authority with one of its functions being to have supervision over all problems of cost affecting wool growers, so should there be such an authority for apple and pear growers. I note from the speeches that were made during the debate yesterday that Government supporters have asked 2 questions: Firstly, would such a body be constitutional? Secondly, where is the money coming from? I have been handed a document by the honourable member for Braddon in whose capable hands my birthplace remains. This document is the sub-' mission of the Apple and Pear Growers Federation of Tasmania and it answers questions that were raised by the Hon. D. F. Clark, MHA, the Minister for Housing in Tasmania, on 20th June 1971. The Minister asked:

The cost of operating could be $20m annually with $2-3m being required in cash. It is clear where this money is coming from?

The answer given by the Federation was:

The chief source of finance would be the the Rural Credits Department of the Reserve Bank whose function is to provide finance to statutory marketing boards and similar authorities. Such finance would be made available on the security of the fruit vested in the Authority. The Bank may require a State Government guarantee. Anything in the way of marketing expenses could be financed from this source including such items as the cost of overseas freight (about $12,300,000) and cartons (about $5,500,000).

The Authority should be in a position to make limited seasonal advances to orchardings to cover the purchase of spray materials and other supplies. These should be financed in a sound business basis. The source of finance for this function would be a State guaranteed overdraft operating on a seasonal basis. The continuance of an effective stabilisation scheme will play a vital part in ensuring that growers costs are partly covered and in giving financial stability to the Authority.

It is expected that the Authority would carry out its functions without the State Government having to subsidise the industry. The greater savings possible under an Authority would assist to achieve a more solvent position in the industry than currently exists. Suitable financial arrangements with the Authority and orchardings in respect to credit arrangements could well encourage trading banks to come back into a field previously vacated by them in favour of exporters.

The money to repay seasonal advances will come from the same source as under the present system, the grower, who recoups it from the proceeds of the sale of his fruit, and if this is insufficient as sometimes happens, from his own pocket. Exporters sometimes make losses when they speculate on fruit but when the market risks are apparent as they were in the 1971 season these risks are borne by the grower.

The second question that was raised was related to the constitutionality of such a scheme. The Tasmanian Apple and Pear Growers Federation was asked:

Would the Australian Apple and Pear Board be able to issue a sole licence to the Authority and if so would this be challengeable in the High Court?

The answer given was:

Where Commonwealth and State legislation conflict the Constitution of the Commonwealth prevails. It is difficult to see where such conflict could eventuate in respect to the granting ofan export licence to the Authority.

In other words, Government supporters are opposed to a proposal which is of the utmost importance to the growers concerned and they have raised specious points which have been refuted by the growers' organisation itself.

The right honourable member for Fisher (Sir Charles Adermann) said that if Government supporters agreed to this amendment it would mean defeating the Bill. What are the facts? Following a vote in favour of a statutory marketing authority, the Bill could be resubmitted immediately and be passed the same day. The right honourable gentleman must be joking. It would take a few minutes or a few hours at the most. The point is that members opposite do not want to put themselves into the embarrassing position of supporting an idea which was proposed by the Australian Labor Party and which has the support of the growers themselves.

I should like to conclude by thanking the Minister for his prompt reply to a question that I asked about stabilisation in the egg industry. I mention it now because it concerns the whole problem we are now considering. In his answer, the Minister pointed out that a great deal of obstruction was being offered to the introduction of a stabilisation scheme for the whole of Australia because of the arrogance, small mindedness and complacency of the Victorian Government. Personally, I find it disgraceful that while many small farmers are being driven off their poultry farms in the present chaos, the Victorian Government still refuses to recognise its responsibility to egg producers by refusing to join the other mainland States whose governments favour control of production. I raise this point because the area of Harcourt, about which I have been speaking, is an important poultry producing area in which many egg producers are facing uneconomical returns from their produce, their future is very much in doubt because of the arrogance of the Victorian Government. 1 have referred to this question previously and I thank the Minister for his prompt reply and also for the action that he is taking in an attempt to put some pressure on the Victorian Government.

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