INVESTING horticultural levies in northern Australia is not a simple process.
Diversity in crops and a competitive domestic market means existing interests are not always served by the development of new industries.
Speaking at the the Northern Food Futures conference, outgoing Horticulture Innovation, chief executive officer, John Lloyd said the horticulture was an umbrella term for a hugely diverse group of crops.
“We’ve got things as diverse as lychees grown in tropical north Queensland through to mushrooms grown in Hobart and everything in-between,” he said.
“Horticulture is about a $10 billion industry, we export about $2bn fresh and import $3bn of which half is frozen.
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“What this says, is it is a very domestically focused industry, though some segments are exclusively export.”
Mr Lloyd said this diversity resulted in a very competitive domestic industry.
“This leads to some of the dysfunction that has been found in horticulture over the years,” he said.
“Because basically everyone is in their trying to get a share of that supermarket shelf, against other producers with other crops or other producers producing at different times or regions.”
Mr Lloyd said to address this, Horticulture Innovation has two investment portfolios, one of which is the strategic levy funds,.
“Out of those 40 or so industries in horticulture, most of those have some sort of levy that has been established by the federal government, that is in fact a tax,” he said.
“We receive the levy contributions from growers, our board policy is we match it dollar for dollar with commonwealth co-contributions.
In terms of opening up new areas what are the winning crops, generally horticultural activities don’t build new ports, and they don't build new roads and they don’t build new towns
“We keep each of those levies in the specific industry bucket, so if it is a cherry levy it stays in a cherry bucket and it is only spent on that particular industries interests.”
Mr Lloyd said the second portfolio addressed long-term and strategic issues associated with horticulture and agriculture, such as fruit fly, and the protection of pollination.
“There is a lot of investment we do aligned with these funds in northern Australia,” he said.
“But one of the challenges we have with horticulture, is that horticulture is not a primary crop.
“It is a Research Development Corporation (RDC) paradox that when you take someones levy dollars and you say you are going to invest in something that is not of concern to them, they generally get concerned about it.
“So there is a levy payer paradox there, and that is the difficulty of channelling levy payers money from other areas of Australia into northern Australia if they are not already participants in that market.”
Mr Lloyd said the role for the RDCs in northern Australia based on their charter was open for debate.
“I can’t comment on all the rest of the RDCs but in terms of developing new markets and new regions and these type of things, it is not specifically outlined in the charter of most RDCs.”
“It is in some I’m sure, but certainly not in ours.
“There is some question whether the RDC is the best vehicle to do it, or should the charter of the RDCs be changed to take on a national development role.”
Mr Lloyd said another legitimate question is why should the taxpayer pay to open up northern Australia.
“I have a personal view that we are now in an agricultural boom and we should be taking every advantage of that and Northern Australia is an integral part of it,” he said.
“So I think there is an answer in that, but that is an answer that needs to be taken to the taxpayer. “
I have a personal view that we are now in an agricultural boom and we should be taking every advantage of that and Northern Australia is an integral part of it
Mr Lloyd said in his mind it would be other crops, rather then horticultural, that opened up northern Australia.
“Horticultural crops are generally not primary crops, they are secondary crops, they are follower crops,” he said,
“In terms of opening up new areas what are the winning crops, generally horticultural activities don’t build new ports, and they don't build new roads and they don’t build new towns.
“Horticulture comes after that investment, the question is, what are your winning crops, what are your primary crops.”
Mr Lloyd said the Burdekin was a good example of crop succession.
“The Burdekin when I was a kid was cattle country, now it is sugar country and you can start to see development taking place around the periphery in the Burdekin, or conversion of sugar country to other crops which are more high value,” he said.
- Sharon O’Keeffe travelled to the Northern Food Futures conference as a guest of major sponsor ANZ.