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Vegie growers face $500m a year FTA loss

The Age, Melbourne

Vegie growers face $500m a year FTA loss

22 April 2005

Vegetable growers stood to lose $500 million a year and 5,000 jobs if Australia struck a free trade deal with China, the industry says.

AUSVEG, which represents the nation’s 4,300 vegetable growers, said at least 900 growers would be forced out of the industry if the deal went ahead.

It follows a feasibility study into the proposed free trade agreement (FTA) which estimated Australia would be up to $23 billion better off and China up to $89 billion better off over 10 years.

But AUSVEG chairman Michael Badcock said with direct assistance to Chinese vegetable growers, and tough restrictions on Australian growers, the future was bleak under an FTA.

He said about 5,000 of the 23,000 food processing and production jobs would disappear under an FTA, while the industry itself would lose $500 million annually.

"Processing vegetable growers are particularly vulnerable, with cheap imports from China likely to end up in many home brand lines in increasing levels," he said in a statement.

Advertisement"Growers supplying Australian processing factories in Tasmania, Victoria, South Australia, NSW and Queensland will be under threat having devastating consequences to many regional communities and causing significant flow-on effects to downstream supply chains."

Already, Australian garlic growers have suffered in the face of stiff competition from their Chinese counterparts.

Australia is also losing out to China in important third markets.

In 2003, Australia sold 10,000 tonnes fewer of carrots to Malaysia. Chinese sales of carrots in Malaysia were up 10,000 tonnes.

China also increased sales of cauliflower and broccoli by 6,300 tonnes to Malaysia in the same year. Australian sales fell 7,000 tonnes.

Australian vegetable exports to China are worth just $519,000 a year. China’s vegetable exports to Australia are worth $41.5 million.

Mr Badcock said China would have an unfair advantage over Australian growers because of much looser pesticide residue and contamination restrictions.

Australian farmers also had to meet higher quality and food standard levels.

He said Australia’s focus on boosting production from limited water supplies also meant the government should be doing more to encourage horticultural production.

"Compared to other forms of agriculture, horticulture generates the highest dollar value return per megalitre of water, so we should be safeguarding this industry," Mr Badcock said.

Mr Badcock said growers were already suffering because of the federal government’s restrictions on ammonium nitrate which had pushed up the costs of fertiliser.

He said Australia should carve out horticulture from the FTA.

© 2005 AAP