Leeton, NSW, 7 April 2003

Citrus Growers' Annual Conference

Ladies and Gentlemen

It's a great pleasure to be here in Leeton today, in the heart of Australia's citrus growing region.  And it's an honour to have been invited to speak at your conference.

The conference brings together a wide selection of interests - growers, processors, marketers.

All have an important stake in the industry and in defining the industry's successes.

I have no doubt that the significant adjustments and commercial imperatives facing the Australian citrus industry are foremost on all your minds at present.

Indeed it has not been easy.  But the industry has made real gains - your efforts are bearing fruit, literally.

Export Success

In particular, as Minister for Trade, I have been particularly impressed by the Industry's success in becoming a net exporter of high quality fresh fruit.

Australian citrus exporters are sticking with export markets despite a difficult trading environment- caused by increased competition and rising production costs .

This success is all the more noteworthy given you have faced intense competition from countries like Brazil, China, the USA and South Africa.

While larger producers such as Brazil and the US continue to dominate the world trade in citrus juice, our experience with high quality fruit clearly demonstrates that there are valuable market opportunities for smaller producers such as Australia.

Riversun's achievement of a firm foothold in the lucrative US market for navel oranges, and the hard-won access for Easy Peels to the Japanese market were a turning point for the Australian citrus industry.

And thanks to efficient handling, processing and transportation systems, fresh fruit can now be seen in Asian supermarkets, restaurants and hotels within hours of leaving our fields and processing factories.

Such successes have contributed to a rise in exports of citrus products from $121 million in 1995 to $188 million in 2001.

Importantly too, the growth in exports has far outstripped the growth in imports of fresh or dried citrus .

Imports of fresh or dried citrus in 2001 amounted to 15,000 tonnes mainly from the USA  and Spain, marginally up from 14,000 tonnes in 1995.

International Trade: the Key to Growth

But no industry can afford to be complacent.  Australia's citrus industry must be fully prepared to meet the challenges and the tremendous opportunities of an increasingly sophisticated and competitive market.

At the same time you can be sure that the Government will continue playing its part at all levels, bilateral, regional, and global.

On the bilateral front, the Citrus Market Diversification Program and the former Supermarket to Asia strategy have proved particularly effective in identifying and opening up opportunities.

The market promotion activities of the Government's new National Food Industry Strategy  will provide further platforms for Australian citrus exporters

Of course, the industry's continued export success depends on producers getting a fresh high-quality product on shelves without delays.

Let me assure you, we keep pushing for all unjustified quarantine barriers to be removed, and arrangements on fumigation treatments and inspection to be set in place as soon as possible in all potential markets.

This does take time and effort, as it involves detailed technical procedures and considerable resources both in Australia and in other markets.

This is why I am particularly pleased about a good outcome for Australian citrus exporters in Japan, Australia's fifth-largest market for citrus exports.

In October 2001, following lengthy negotiations and the submission of extensive technical data by Biosecurity Australia, Japan agreed that Australian citrus exports could undergo cold disinfestation while in transit to Japan, rather than before export.

This has significantly reduced delays and improved the quality of fruit for sale to Japanese consumers.

At a global level we are part way through a new round of global trade negotiations at the World Trade Organisation, kicked off at the WTO ministerial meeting in Doha in Qatar in December 2001.

Agriculture is the central and arguably most difficult and contentious area.

We are also embarking on a range of bilateral and regional initiatives, to complement our efforts in the multilateral negotiations, and ensure even greater diversity and depth in our export products and markets.

Last month we held our first formal round of negotiations to explore the key elements to be covered in the Free Trade Agreement (FTA) with the United States, and now we are preparing for the next full round of negotiations, in May.

We are now both determined to complete the agreement in 2004.

The FTA with the United States, and our other regional trade initiatives, are part of the most ambitious ever trade agenda for Australia.

We are going to have to be particularly dynamic, flexible and sure-footed in ensuring that trade in Australian agricultural products - including our citrus trade - continues to grow in global agricultural markets.

This leads me to the role industry can play.  The citrus industry itself has an important role in guiding the Government in these efforts by identifying market access priorities.

It has been working very effectively with the Government through the Horticultural Market Access Committee. 

The committee has made detailed submissions on the industry's priorities in the Doha round of multilateral trade negotiations, as it has in the context of the FTA negotiations with the United States.

In its submissions, the committee has pointed out that oranges are our top horticultural export to the United States, as well as our top horticultural import from the United States.

That sends a clear message about the importance of the citrus industry in these negotiations.

Industry should continue to advise us of major objectives in overseas markets so we can improve the prospects for Australian citrus exports wherever possible.

The status of agricultural negotiations in the WTO

The Doha Round will be crucial for liberalising trade in agriculture and food, still the most protected area of global trade.

We have continued to state that there will be no Doha Round outcome without an outcome on agriculture. 

Why?  For two principal reasons.

The first is the new found role and influence of developing countries in the negotiations, and because of the mandate achieved at Doha.

Developing countries now make up more than 100 out of the 145 WTO members.  They are overwhelmingly agricultural economies.

They are no longer prepared to keep opening their markets to developed countries for industrialised products and services until the developed countries give them fair access for agricultural products.

The second is the mandate for the agriculture negotiations that all WTO members agreed at the Doha meeting.  It requires that the Round succeed in:

• improving market access for agricultural products;
• substantially reducing domestic support; and
• reducing - with a view to phasing out - all forms of export subsidies.

By 31 March - just a week ago - all parties were supposed to agree on the targets and objectives - the so-called modalities - for agriculture.

That hasn't happened, despite two proposals by the Chair of the agriculture negotiations, Stuart Harbinson, to try and break the log-jam between the major players.

The proposals still failed to deliver substantial market access improvements in key markets.

This is unacceptable to the farmers of Australia and of other Cairns Group countries - they have waited for decades for a fairer international trading environment. 

Despite all our problems with the Harbinson proposals, we at least still accepted that they could be a basis for discussion in the WTO.

Unfortunately, the European Union, Japan and some other protectionists in the negotiations have refused to even discuss the issue.

They have even tried to deny the Doha mandate which they agreed to just sixteen months ago.

The stakes, ladies and gentlemen, are very high.

Failure to reach agreement on agricultural trade reform will jeopardise the success of the whole Doha Development Agenda.

It is time for those dragging the chain on agriculture to ask themselves whether they are prepared to risk the Round and the boost it will provide for global prosperity, just to protect a group of insulated farmers.

We have to be prepared for a drawn-out battle to raise the ambitions of the EU and Japan, in particular, so that agriculture does not become the cause of failure in the Doha Round.

The next WTO ministerial meeting, in Cancun Mexico in September, will be a real test of the willingness of the EU, Japan and others to get real about the Round.

In the meantime, we will be working very hard - as permanent Chair of the Cairns Group - to ensure that all members of the WTO understand our interests, and our case for agricultural reform.

And I will continue to work closely with our agricultural industries to ensure their concerns are recognised.

I am confident that the gains we make during the current round of WTO agriculture negotiations will improve the situation for efficient producers such as yourselves.

The Domestic Environment - Making the Most of Opportunities

The Australian industry must, however, be ready to take advantage of market openings. 

Over the past decade the citrus industry has shifted away from the production of low value juice to an increased focus on the production of higher value fresh fruit. 

This has involved the removal of large quantities of Valencia trees and the planting of navel and easy peel varieties.

The industry is now better placed to pursue niche and counter seasonal export marketing opportunities and the returns to growers are higher. 

I commend your efforts to reform and improve the industry so you can be on a more competitive footing.

The Government is conscious of the difficulties facing some citrus producers - particularly in the Riverina - caused by rising water costs, lack of farm labour and changing consumer requirements.

The Government believes the Australian citrus industry has a strong future and remains committed to working with it to ensure its long-term viability.

Recently, in response to industry requests, the Department Agriculture, Fisheries and Forestry confirmed that Horticulture Australia Ltd would continue to administer export control arrangements beyond 31 January 2003, when existing regulations were due to expire.

Horticulture Australia Limited will continue to issue export licences to facilitate horticultural exports into key markets, particularly citrus exports to the US. 

Conclusion

Ladies and gentlemen

Your industry's success, its efficiency, and its vitality place a great responsibility on Government to ensure that your efforts do not go to waste, that every opportunity for export is taken up.

We will continue to fight hard on all levels to ensure that the playing field is as level as possible for the Australian citrus industry.

And of course I know the industry itself will continue to put in the hard yards, by working to remain cost competitive, by coordinating its marketing efforts and by accessing new export markets.

Thank you.