Australian orange industry faces economic impacts
Fri 21 October 2011
Lauren Grounsell, Bachelor of Journalism
Australian orange farmers are facing financial ruin despite a successful season, as the strong Australian dollar threatens to sour the citrus industry.
Despite great rain ensuring an abundance of quality fruit produced, many farmers are facing the reality that sales cannot cover the cost of production and it would be cheaper to simply leave the fruit on the trees.
From a p
roduction perspective, this year’s outlook looked positive for Australian farmers, who produced 240,000 tonnes of navel oranges this season compared to the 177,000 tonnes in 2010.
However, the industry was hit hard by a different threat.
Citrus Australia’s communications manager John Back explained that in recent years, over half of Australia’s navel orange crop was exported, but this was no longer the case.
“This year the Australian dollar made our exports uncompetitive,” Mr Back said.
“With the Australian dollar so high, it meant we’d have to charge 30 per cent more for our product, just to make the same as we had in previous years.
“Our competitors in the export market did not have this problem and were able to set their prices lower, and therefore gain more business at Australia’s expense.”
Mr Back explained that the export and domestic market were interlinked, and fruit not sold overseas entered the already oversupplied Australian market, decreasing prices.
Farmers have been forced to sell oranges for as little at 15 cents a kilogram into the domestic market, and while this was good for consumers, it was essentially costing farmers their jobs.
Australian farmers have proven their resilience, surviving extreme growing conditions, but Australia’s strong financial position was something beyond their control, Citrus Australia’s CEO Judith Damiani explained.
“Our citrus growers have survived the drought, frost and pest infestations, but unfortunately the exchange rate may be the final straw for many growers,” Ms Damiani said.
Citrus Australia is taking the lead in encouraging Australians to support the domestic market in their Aussie Orange Fightback Campaign.
Recruiting the AFL and leading retailers, Citrus Australia launched Aussie Orange Week on August 13, 2011, in a bid to raise public awareness of the challenges being faced by orange growers.
Mr Back played an integral role in Aussie Orange Week, handing out oranges in Australia’s capital cities to build awareness.
“Most consumers have little idea where their food comes from, or when it is in season, because they are used to year-round availability of products in their local supermarkets,” Mr Back said.
Citrus Australia also created the Aussie Oranges website to further promote the fruit and educate consumers about healthy eating.
Many small Australian businesses were also doing their bit to support the domestic market.
Wurtulla Foodworks’ fruit and vegetable manager Ian McCoombs supported Australian produce, and has a reputation for supplying consumers with top quality Australian fruit and vegetables.
“I find the quality is better for Australian produce and customers prefer it,” Mr McCoombs said.
However, Mr McCoombs admitted sometimes it was cheaper to buy from overseas countries like China.
Companies such as Aussie Farmers Direct are in strong support of Citrus Australia’s Fightback Campaign, and pride themselves in delivering fresh Australian produce straight from the farm to urban doorsteps.
In a bid to secure the future of this struggling industry, Farmers Direct are delivering 3kg bags of juicy navel oranges to their customers for only $A3.00.
Aussie Farmers Direct CEO Braeden Lord said educating consumers was essential if Australian farmers were to survive.
“If each Australian household bought a 3kg bag of Australian Navel oranges each week, we could save these farming families from a truly dire situation which is completely beyond their control,” Mr Lord said.
Currently, 2000 Australian farmers depend on this industry to make a living, but citrus growers are aware that if the Australian dollar remains strong, suppliers will also be affected.
Since Aussie Orange Week, the outlook has been more positive, with Mr Back confirming the largest number of domestic sales in a four week period.
However, Citrus Australia are preparing for the worst, developing long term strategies to combat the industry slump.
Currently, Citrus Australia is working on expanding the export market in Asia.
“We have recently gained access to the Korean market, increased our penetration of the Japanese market, and are working on the China market,” Mr Back said.
“Opening new markets will help to offset lower sales in the US market.”
In years to come, Citrus Australia will work to encourage growers to switch to new varieties of fruits which will ensure higher returns from sales.
There will also be an introduction of more efficient farming practises, and a push for a reduction in government taxes within the industry.
Despite their hardship, Australian farmers are adamant they are not looking for handouts, but their message to Australian consumers is clear: eat more Australian grown oranges.
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