Agriculture: Dried fruit industry savaged by deregulationby Peter WestmoreNews Weekly
, May 5, 2001
The Australian dried fruit industry is facing terminal decline, due to the removal of tariffs on imported dried fruit, together with fierce competition from subsidised producers (like Turkey) which have undercut Australian exports.
Australians are among the largest consumers of dried fruits in the world, with average annual consumption around 1.8 kg per person. Until recently, this was supplied by Australian producers.
However, since the 1980s, successive Federal Governments had reduced protection for the Australian industry, leading to a flood of cheap imports from third-world countries, including Iran, Greece and Turkey.
Whereas Australia was a major exporter of dried fruit, it has been largely replaced by Turkey, as shown in the following table showing the share of imports to various countries from Australia and Turkey in 1995:
A former grower, Len Stevens, told the Sunraysia Daily that the dried vine fruit industry could soon "die without a whimper", if present policies are not reversed.
He said the dismantling of the Australian Dried Fruit Association's marketing and regulatory structures, together with cheap imports, were taking a serious toll on the industry.
Unlike Australia, Turkey makes no bones about what its policies are designed to achieve.
The Turkish Government says, "Turkey has a vast agricultural resource base with significant potential to expand output, particularly through increased crop yields.
"In the past, the government has intervened heavily in its agricultural sector through price supports, input subsidies, import protection, marketing monopolies and export subsidies and taxes.
"To increase food self-sufficiency and rural development, stabilise farmers incomes, provide adequate nutrition and affordable food and promote exports have been adopted among government objectives."
These objectives have been secured through a succession of five-year plans, which have expanded production and rural incomes.
The Turkish Government says that "Production levels are high and Turkish dried sultanas and apricots dominate world markets."
Turkey's sultana exports grew by over 20 per cent between 1990 and 1995.
In response to these pressures, the Australian Dried Fruit Association commissioned a Canberra firm, ACIL Consulting, to review the existing marketing, regulatory and support structures in the dried fruit industry, and make recommendations for change which will enhance the viability of the industry and industry growers, and ensure an industry of sufficient size to be viable.
ACIL's 93-page report makes depressing reading.
It fully endorsed the view that the industry should be deregulated, saying, "both in Australia and overseas, progressive economic liberalisation and globalisation have forced a fundamental reappraisal of the role of government and traditional instruments of intervention and regulation."
It listed the consequences of these policies being reduction in import protection (tariffs); the termination of the Trade Practices Commission exemption allowing domestic price collusion; the end of statutory equalisation between domestic and export markets; fewer restrictions in licensing rules for packers; and higher water prices, which it called "a shift towards full cost recovery in water pricing".
ACIL Consulting recommended the deregulation of the dried fruit industry, in line with what has been done in the sugar and dairy industries, abolition of the single desk for exports, and similar measures.
It reported that during grower meetings held as part of its review, "There were frequent complaints that 'they' [clearly, governments] were not doing enough to help growers."
In a sign of insufferable arrogance, ACIL Consulting, which operates out of modern air-conditioned offices in Canberra, declared that "until and unless references to what 'they' should do are replaced by what 'we' should do, the dried fruit industry will not be successful in solving the problems it confronts."
Its only practical suggestion was that growers should shift out of dried fruits into producing wine grapes.
These recommendations have been largely adopted.