2.  Imports

A flood of cheaper and often inferior quality imported produce has had a deleterious impact on particularly the Australian horticulture industry with 900 growers exiting the industry in the last 5 years.  These trends are likely to continue unless Government, supermarkets and fast food outlets support Australian producers while providing consumers the necessary information to make informed purchasing decisions.      

• Both frozen and fresh vegetable imports have increased by approximately 40% in the last 4 years while processed food imports have increased by 34% in the last 5 years.
• Federal Government support for farmers is the second lowest among OECD nations. With Australia’s farmers’ terms of trade declining by 23% in the last decade and globalisation trends set to continue, the predicament of horticultural growers is grim despite being the 5th most efficient growers in the world.
• Australian horticultural growers aren’t afraid of competition, but request that this competition be on a level playing field. Australian producers spend 12% of their annual income on food quality and safety programs yet compete with overseas producers who don’t have to adhere to the same standards.  For example, only about 5% of imported produce is residue tested and for only 25 chemicals initially, while domestic arrangements require growers to have their produce tested annually, and for 61 chemicals. 
• Exacerbating this predicament is the fact that some countries such as China have employee wage rates as low as US$0.60 per hour.  It is hardly surprising that such competition has seen a $230million loss in Australian horticultural export sales in the last 3 years.
• Country of Origin labeling (CoOL) is a crucial element to remain globally competitive. The current Food Standards Australia and New Zealand (FSANZ) transitional standard allows importing manufacturers of unpackaged food a choice of labelling by ‘country of origin’ or as ‘imported’ while packaged food can be labeled ‘made in Australia from imported and local ingredients’ when 90% of imported ingredients can be legally used.  Obviously, with respect to unpackaged food, countries differ with respect to their food safety/ quality standards while such misleading unpackaged food labeling does not allow consumers the ability to make informed purchasing decisions.
• Further the Association is concerned that the issue is not being enforced effectively at a State level.  For instance, a recent AQIS report stated that approximately 80% of compliance failures on imported foods related to labeling.
• With Australia’s two major supermarkets accounting for over 75% of retail turnover of packaged food, this market share provides these chains the power to increase cheap imported content within private labels, whilst still maintaining margin and market share.  This is a worldwide phenomenon with private labels accounting for about 45% of products sold in supermarkets in Europe, compared to 25% in the USA. Australia is estimated to hit 25% by 2010.

The objectives for this priority area are:

• Accurate CoOL for all packaged and unpackaged produce. 
• Proper enforcement of CoOL at State Government level. 
• Continue to follow up reforms of Customs practices regarding anti-dumping processes.
• Ensuring the implementation at State level of Industry Partnership Program initiatives from various horticulture peak commodities.