A severe cutback in SPC Ardmona’s capacity to purchase fruit from local growers has raised questions about the future of the Goulburn Valley fruit industry. As Dylan Bird reports, however, orchardists are refusing to accept the decline of a sector that has been part of the region’s identity for more than a century.
On a crisp August morning, Peter Hall’s Mooroopna orchard is a hive of activity. Small teams of workers are dispersed across his property, busily tending to the crop to make sure it is on track in the lead-up to picking season. In one section, a man is pruning atop a mobile cherry picker, while a couple of guys nearby are freshly planting plum trees.
“It’s a large business,” says Hall, explaining the work the needs to be done to keep the orchard healthy in the colder months.
“We’re investing for five years time.”
While the vast, densely packed orchard gives every impression of a thriving industry, a patch of land near the entrance to the property tells a different story. Dotted with mounds of crushed branches, this is the previous site of Hall’s canning-variety trees, which he destroyed after learning that SPC Ardmona had abandoned his contract.
“I’m no longer growing canned peaches, and I have been doing that for forty-odd years,” says Hall.
“So…[removing the trees] was quite catastrophic.”
Apple with evidence of pest at Peter Hall’s orchard, Mooroopna. Photo by Dylan Bird.
Hall’s situation is not dissimilar to many other fruit growers throughout the Goulburn Valley. In April this year, SPC Ardmona announced that it was cutting its local fruit intake by up to 50 percent. As a result, 60 of the cannery’s 114 suppliers had their contract abandoned, and many others had their quotas significantly reduced.
This has not only removed a primary income stream for growers, but has also led to a widespread fear of a pest invasion owing to the large quantity of unpicked fruit in the region.
Greater Shepparton councillor Fern Summer, who has been a vocal supporter of the local fruit industry, is worried about what might happen if the threat is not adequately contained.
“I don’t want a razor wire fence around Shepparton because it’s been quarantined due to these pests and biohazards,” she says.
“It would destroy the entire community.”
Facing an uncertain future and a potential biosecurity catastrophe, growers have taken it upon themselves to remove all of part of their orchards. With a lack of direct government assistance, however, this presents as an added financial burden.
“It’s going to cost about $38 million to excavate all these trees. We need a sizeable chunk of funding,” says Summer.
The figure is taken from a report published by Fruit Growers Victoria in June, which calls for millions of dollars in government assistance to remove trees and re-plant alternative crops.
Unpicked fruit at Peter Hall’s orchard, Mooroopna. Photo by Dylan Bird.
These include a federal government concessional loans scheme, which provides funds of up to $650,000 to eligible farmers on a low interests rate, as well as a $5.5 million Victorian government infrastructure and industry fund to underpin a long-term plan for the region’s fruit sector.While there has not been any financial aid to excavate trees, multiple levels of government have announced measures to minimise the effects of the SPC Ardmona cutbacks on local growers.
Meanwhile, the Greater Shepparton council has run a number of Horticulture in Transition workshops in an effort to encourage struggling orchardists to embark on a career outside of fruit farming.
For Greater Shepparton Mayor Jenny Houlihan, the workshops are an important step in assisting farmers to make best use of the region’s resources.
“We’ve still got a great irrigation system, we’ve still got great soils, we’ve still got a great climate,” she says.
Houlihan is well acquainted with the opportunities the region can offer. Upon arriving in the Goulburn Valley in the 1960s, she worked as a teacher before starting up a small retail business in Shepparton’s CBD. While sympathetic to the plight of orchardists, she sees it as inevitable that some will need to adjust their business to accommodate changing economic circumstances.
“It’s a matter of recognising what are the markets out there now, what can people transition into, and helping with those opportunities,” she says.
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Peter Hall has been adapting his business for some years. When he took over his family orchard in the early 1980s, roughly 80 percent of his product went to the cannery. Over time, however, he gradually reduced his canning trees as the fresh fruit market, both in Australia and abroad, provided more security and assurance. Now, a small plantation of a specific variety of pears is all that remains of his canning crop.
A worker plants plum trees at Peter Hall’s orchard. Photo by Dylan Bird
“It’s in a state of transition,” says Hall, referring to the local fruit industry.
“Some of us have been transitioning for a lot longer, like we have, and others have been shocked by the cannery changes.
“There’s a lot of growers in a worse situation than me.”
Doug Brown is one orchardist who faces an uncertain future. For around 13 years, he has sold virtually all the produce from his canning-variety trees to SPC Ardmona. While the company has not abandoned his contract, he is unsure whether there will be a viable market for his fruit in the coming years.
Fresh trees to be planted at Peter Hall’s orchard. Photo by Dylan Bird.
“The cannery’s telling us that they will be taking fruit in the upcoming season but can’t guarantee it from thereon,” he says.
“So that is a risk to our business.”
Brown has already suffered at the hands of a diminishing demand for his fruit. Over the past decade, his selling capacity has decreased from around 500 to 300 tons of fruit per year. With a commission of approximately $500 per ton, he says it is difficult to maintain a profitable business given the extraneous costs of labour and machinery.
He has also recently removed around a quarter of his orchard at a personal cost of around $7000. Despite such setbacks, Brown is not yet making plans to give up fruit farming.
“At the moment we’re staying growing canning fruit,” he says.
“We’ve bought machinery and updated the orchard…with a future in mind.
“It’s a gamble – all farming is a gamble – but we’re hoping the cannery finds a way to get through this situation.”
While SPC Ardmona’s announcement in April came as a shock to many growers, there is every indication that the business has been experiencing difficulties for some time. Over the past five years, the company’s export volumes have declined by 90 percent, while its share of the domestic canned fruit market has dropped to 33 percent.
SPC Ardmona factory, Shepparton. Photo by Dylan Bird.
This has underscored a tumultuous period for the company. In 2011, the company closed its Mooroopna plant, before reopening it in 2012 with the assistance of a $4.4 million Victorian government contribution. In early September, however, SPC Ardmona indicated that it would likely be forced to cease operations in both its Mooroopna and Kyabram factories, and focus all regional production in Shepparton.
The reasons for such difficulties are manifold, however one major cause has been the high value of the Australian dollar, which contributed to a flood of imported canned fruit hitting domestic markets in recent years.
In response, SPC Ardmona Managing Director Peter Kelly has led a chorus of Goulburn Valley orchardists in calling for the government to implement temporary tariff protection measures through the World Trade Organization (WTO). If initiated, this would involve the imposition of a duty on imported products that are deemed to have been ‘dumped’ – that is, sold to an importing country at a price below that of its original value.
SPC Ardmona has so far been successful in having its case brought before the Anti-Dumping Commission. Currently, it has applications relating to peach products imported from South Africa and tomato products from Italy being considered by the Commission.
A further inquiry is being conducted by the Productivity Commission to determine whether safeguard action should be taken through the mechanisms of the WTO. An Accelerated Report released by the Commission on 26 September, however, concludes “there is no compelling evidence of critical circumstances that could warrant a provisional safeguard measure.” The Commission’s final report is due in December.
Although supportive of such inquiries, many Goulburn Valley orchardists are skeptical about the previous government’s commitment to alleviating the pressures on the industry.
“We started having meetings with the government three or four months ago and their initial response was ‘don’t bother’,” says Hall, referring to SPC Ardmona’s decision to seek tariff protection.
“They [were] quite happy to say ‘let economic forces prevail and let them take their course’.”
Most recently, SPC Ardmona and the Australian Manufacturing Workers Union have lobbied the federal and state coalition governments to make good on a pre-election pledge to invest $25 million each to modernise the cannery. So far, there has been no indication as to whether such funds will be delivered.
While the government has some power to assist orchardists, some of the problems facing the industry stretch beyond Australia’s direct control.
From the establishment of SPC in 1917 up until the 1980s, the Goulburn Valley horticulture industry was safeguarded by protectionist economic policies. As global trade barriers and agricultural subsidies were reduced, however, the company – which merged with Ardmona in 2002 and was bought by Coca-Cola Amatil in 2005 – faced increasing pressure from cheap imports and the growing dominance of supermarket chains.
Ultimately, this shift towards free trade and competition has resulted in the transference of control away from orchardists to volatile market forces and large-scale multinationals.
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In a 2013 paper, Jane Dixon and Bronwyn Isaacs examine the way in which the rise of the supermarket has impacted on community dynamics in the Goulburn Valley. Through their research and interviews with a range of local residents, the authors identify a collective unease and ambivalence about what the future of the region will look like.
If recent happenings are anything to go by, however, this is does not appear to reflect a community that is willing to allow global economic pressures to decimate the local industry.
In 2012, a group of locals established the Goulburn Valley Food Co-operative following the closure of the Girgarre Heinz factory. With an overarching goal of promoting Australian food security, the Co-op has forged links with food manufacturers to produce and distribute locally made products.
According to Co-op spokesperson Liz Waters, who sits on the group’s steering committee, the initiative tapped into a growing discontent among farmers and community members about the dominance of large companies.
“It was about time that someone fought Goliath,” she says.
While the Heinz closure put 146 people out a job, it was the flow-on effect on farmers and other related businesses that Waters says spurred the community into action. Through an Internet campaign and local publicity, the Co-op has attracted funds from more than 500 individuals each pledging $50 to become lifelong members.
Significantly, in 2012 it received $2 million from a ‘white knight’ investor, which provided the group with the means to begin planning for production.
While the group initially had its sights set on attaining a factory, a failed attempt to purchase the Heinz plant and the collapse of the local Banksia Investment Trust meant that it had to find more industrious ways to advance.
“Slowly the idea of a virtual factory emerged,” says Waters.
“It became obvious that all around the region there were small factories working well below capacity, so why would we build yet another under-utilised factory if we could design products these small factories could produce?”
It was through teaming up with such businesses in the region that the Co-op managed to release its first product last July. Packaged in the form of a ready-made ‘meal for four’, it contains organic semolina pasta produced by Casalere and a tomato-based sauce developed by Riverina Grove, both of which utilise local ingredients. Complementing the products is a small book of recipes by Peter Russell Clarke, and a postcard that explains the history of the Food Co-op.
The group also currently has a pear cider in production, after a local orchardist offered up 10 tons of pears that he could not offload owing to the diminished demand for fruit in the region.
“Being able to use these terrific fruit products rather than pull the trees out of the ground is something we’re very keen on,” says Waters.
At present, the group’s products are stocked in around 20 small food outlets throughout the Goulburn Valley and regional Victoria.
While Waters is confident that the Co-op’s output will significantly increase, she is mindful of the need to keep the benefits flowing to the local community.
“We’re pretty keen on keeping food miles fairly short, and also supporting not only our local workers and local primary producers but also our local retailers” she says.
“We’re also [committed to] every one of those people involved in each of those steps getting a fair share for what they do, rather than the producers…or the farmers getting a very small take, and then at the end of the day a high-end retailer making a lot of money out of it.”
In addition to such economic benefits, Waters says the Co-op is playing a very important role in restoring pride to the Goulburn Valley horticultural sector.
“It’s been terrific working with the local producers, and certainly being able to use products that of course are of fabulous quality,” she says.
“Hope is probably one of the key things. It’s something that was talked about a lot at our first rally, and has been a constant theme all the way through.
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One need not look far in the Goulburn Valley to appreciate the centrality of horticulture to the region’s identity.
As we drive around Hall’s orchard, he tells childhood stories of his excitement in going to the SPC cannery in his father’s truck, with the cricket playing in the background.
“As a kid it was a wonderworld really,” he says.
“Everyone you talked to at school had a dad or an uncle or a mum who worked there, so it’s quite embedded in the fabric of the town.”
While there is a hint of parochialism in Hall’s outlook, he is not at all close-minded about the nature of the local fruit growing industry. In his view, one of the most concerning consequences of the sector’s decline would be if migrants stopped coming to the Goulburn Valley in search of work.
“It would be a shame if the fruit industry didn’t maintain its ability to help those people get a start in Australia and make something of themselves and feed back into our country,” he says.
The Goulburn Valley has long been a destination point for migrants. In the mid-20th century, large numbers of Italian and Greek arrivals came to the region, while in later years people from countries as diverse as Albania, Turkey, Iraq and Sudan have established a home in the area.
A major reason for such secondary migration has been the seasonal work opportunities created by irrigated agriculture, which traditionally have not demanded a high level of English nor required any formal qualifications.
Over the past decade, a large portion of Hall’s workforce has comprised of Afghan refugees. He speaks glowingly of the role such workers have played in the success of his business.
“These refugees have wanted to work, they’ve all contributed, they’ve picked my crop,” he says.
“And if I don’t have fruit pickers I’m finished, so I’m very respectful of [them].”
Hall is also positive about the effect migrant workers have had on the region.
“They’ve contributed to our local society, they’ve become part of our community, they’ve bought houses, some have become successful businessmen in their own right, and they’re now contributing back to our country by paying taxes, so to me it’s been a tremendous success story,” he says.
“I feel good that the fruit industry has been able to provide…employment for people who have come from some of the most desperate situations.”
Cr Houlihan is similarly positive about the benefits migrants bring to the Greater Shepparton region. However, she is concerned that the troubles faced by the industry will dissuade people from staying in the area long-term.
“It’s obvious that if there’s not enough fruit to pick, that is going to affect the casual work or people coming here to prune,” she says.
“And that includes our migrant population, or people who want to come here as backpackers, or people who live here and want to do that part time work.”
Nonetheless, she is hopeful that the changes in the region’s economic base will provide conditions amenable to a broad range of people.
“We’re much more diverse here…than we used to be, and that’s one of our strengths,” she says.
“We have a strong small business base, and…that gives a lot of opportunities for people who have lived here all their lives and people who come here.”
Interestingly, it has been the Goulburn Valley’s Indian population which has led the development of a new agricultural sector. Since the mid-2000s, a number of families began pulling out their fruit trees and replacing them with vegetable crops.
Lucky Khakh was the first to make the transition. Arriving in Australia in 1994, he spent five years driving taxis in Melbourne before buying an orchard in East Shepparton. As the Victorian drought made fruit farming increasingly difficult, he decided in late 2004 to transform his land into a vegetable crop.
Since then, he has acquired plots adjoining his property to form a 90-plus acre farm specialising in zucchini and broccoli, and is now the largest vegetable producer in the region.
On seeing his success, a host of around seven Punjabi families in the region have followed suit, planting vegetables to either replace or complement existing orchards.
One of the most fertile regions in India, Punjab has a climate and terrain not dissimilar to Shepparton.
For Khakh, it was this familiarity with agriculture that made him turn to vegetable growing.
“I grew up on a farm…and we did a lot of things from a young age,” he says.
“I knew how to [grow vegetables].”
While vegetable growing has proved a financial success for some people in the Goulburn Valley, Mr Hall is skeptical about the ability for orchardists to effectively make the transition.
“It’s a totally different sector,” he says.
“There’d be a few barriers to entry…for a grower who’s been entrenched in growing deciduous fruit trees to swap into something like vegetable growing.”
In addition to the vastly different farming techniques involved in the process, Mr Hall is wary about the protential for the vegetable market to become flooded with new converts.
“[It] probably produces some competitive issues because if it’s good, everyone gets into it and it gets overdone pretty quickly,” he says.
“There’s a lot of market intelligence that would have to be determined.”
In Mr Khakh’s view, there is some scope for the vegetable growing sector in the Goulburn Valley to accommodate new farmers.
“I don’t think there’s any problem if another 10 or 20 people start growing zucchinis or other vegetables,” he says.
More concerning, in his view, is the cost of agricultural production in Australia, which makes it difficult to compete with vegetables imported from overseas.
Since 2007/8, Australia’s vegetable imports have grown by an average of 10 percent per year. China is Australia’s largest importer of fresh vegetables, accounting for around 75 percent of all garlic on the Australia market.
While Khakh remains confident that he will be able to continue to sell his vegetables to wholesalers in Melbourne and Sydney, he questions the propensity for large volumes of specific vegetables to flood Australian markets.
“[In the future] it could be broccoli, it could be anything,” he says.
Recent statistics suggest some cause for concern. Since 2007, broccoli imports from China have increased by 78 percent, and the average price of Australian broccoli is roughly 2.5 times higher than that imported from China.
For Khakh, it is the high cost of labour and machinery in Australia that makes agriculture a difficult sector to maintain.
“Here it costs 10 times more than China” to pick and pack vegetables,” he says.
“Australian growers [risk] going backwards.”
It is a familiar story for Goulburn Valley orchardists, many of whom bemoan the stringent food safety and employment guidelines which result in the harvesting of a superior, but invariably more expensive, product.
“If you were to ask me what the biggest issue was, [it] is the cost of doing primary production in Australia, and particularly the cost in labour rich sectors,” says Hall.
“It’s that crunch between our high cost of production, because we have such high expectations of food quality and safety in Australia…and then other countries that don’t have those cost structures.”
As orchardists face increasing uncertainty about the demand for their fruit, they are left with little option but to keep doing what they know.
While the future looks undeniably bleak for some, Hall is adamant that growers in the region will be able to continue working in an industry that delivers more than mere financial benefits.
“It’s a pleasing industry because we’re producing food for people, we’re producing jobs for people, and you’re trying to care for the environment at the same time,” he says.
“So it’s really got some unique combinations, for lifestyle, for jobs, and producing something that you’re proud to produce.”
With a complex web of consumer-choice, international trade and government policy playing a part in the future success of Australia agriculture, it appears there is no silver bullet to save the industry.
While Hall is unequivocal about the need for immediate financial assistance, he believes that real progress cannot be made until there is an attitudinal shift towards agriculture and manufacturing in Australia.
“We’re still positive about our industry,” he says, looking out over his sprawling, sun-tinted orchard.
“But we’re just saying, can you also be positive about our industry.”
The Siren 