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					Plant industries




PLANT INDUSTRIES
Summary

The early success of the pome fruit industry led to the popular term for Tasmania of ‘The
Apple Isle’. The fruit and floriculture sector contributed around $125 million to the
Tasmanian economy in 2000/01, and about $150 million in 2001/02.

The fruit sector remains strongly dominated by the apple industry, with apples having a
gross value of $41 million in 2000/01. The production of winegrapes has expanded rapidly
in recent years such that wine is now also a significant contributor in the fruit and
floriculture sector. Cherries are also beginning to be a significant component of the sector.

Most fruit and nursery activity is based in southern Tasmania, though smaller areas are to
be found in Tamar and Mersey valleys. The grape growing areas are located in the Tamar
Valley and the north-east, with smaller plantings in the south and east of Tasmania.

The vegetable sector is also a strong contributor to the economy, especially in the north of
the State. Potatoes in particular dominate the $145 million vegetable sector.

In the pasture and field crop sector, poppies are the dominant industry. Together with the
pyrethrum industry, Tasmania is a major supplier to world markets as our high quality
product and consistent levels of production give Tasmania a strong marketing advantage.

Collectively, the plant industries have a farm gate value around $400 million, and a gross
value around $430 million.




Department of Primary Industries, Water and Environment                                 Page 43
Fruit and floriculture industries




FRUIT AND FLORICULTURE SECTORS
Summary

The fruit and floriculture sector contributed around $150 million to the Tasmanian economy
in 2001/02.

The sector is dominated by the pome fruit industry (which is almost exclusively based on
apples), and the wine industry. Together, these two account for three quarters of the total
value of all industries in the sector.


Summary of value of fruit and floriculture industries ($m)
                                              91/92       97/98    98/99    99/00    00/01    01/02
Production value (farm gate)
- Pome fruit (apples and pears)*                  41.0      38.2     53.1     45.5     41.3     55.5
- Stone fruit                                      1.2       2.5      2.3     5.75      7.8     5.75
- Wine (product value)                              11        17       37       38       39        55
- Berry fruit (gross value)                        c.2       2.6      2.9      3.2      4.3       4.5
- Hops                                            15.5                         7.6      7.5       6.3
- Nursery (gross value)                           c.12       14      16.2              15.4
- Floriculture                                     8.2                                         c.7–8
- Emerging and other fruit and
floriculture crops
Total                                            c.90       c.85    c.125    c.125    c.125    c.150
Note: * Gross value of production, not farm gate
Source: see individual industry tables.




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Pome fruit (apples and pears) industry




POME FRUIT (APPLES AND PEARS)
Introduction
The Tasmanian pome fruit industry primarily involves the production of apples, and a lesser
volume of pears, for local, interstate, export and processing markets. The State is largely
self-sufficient in supplying its own nursery needs and it makes a significant contribution to
supplying interstate customers with nursery trees and rootstocks.

Tasmania’s temperate maritime climate has cool winters essential for optimum chilling
requirements, and a long mild growing season from September to May which offers ideal
conditions for fruit development and ripening of a full range of premium apple varieties.

Extreme weather conditions, such as frost, hail, sunburn and high winds that are
detrimental to fruit production and quality is infrequent. Environmental conditions also limit
major pest and disease pressures compared with interstate and overseas apple growing
regions.

The absence of pests and diseases such as fruit fly, apple canker and fireblight assists
growers in the cost of production and export market development.

Relatively good availability of land and water resources, within the traditional and some new
fruit growing areas, provides opportunity for further orchard intensification and possible
increase in total production.

The State is well placed to promote its clean environment and sustainable fruit production
practices which are to a large degree compatible with Australian supermarkets and
European ecolabel standards.

The pome fruit industry has a long history and rich heritage. Commercial plantings and
exports date back to the mid 1800s. At its peak during the 1960s, Tasmania’s annual
exports to the UK reached 126,000 tonnes.

Due to market, economic and currency changes, the industry has shifted focus considerably
in the past 30 years, going from predominantly supplying the European market prior to the
1970s, to supplying interstate and East Asian markets in the early 1980s. Now, it is based
mainly on interstate sales but with a significant penetration into the East Asian markets and
the Indian sub-continent. Recently there have also been
renewed exports of high value varieties to the UK.

Recent trends: Apples
The industry operates under sustained competition on
domestic and international markets. In recent years it
has been affected by lower grower returns due to high
national crop levels and greater exposure to global
market developments. The industry has responded to
these changes in the market place and is moving
towards the adoption of international best practice.

Since 1999 the total production has fluctuated between
48,000 and 62,000 tonnes and is likely to remain at
50,000–55,000 tonnes during the next two to five years.
The gross market value is estimated at $55-60 million.

The variety mix for apples is dominated by Red Delicious,
Golden Delicious and Fuji. The premium varieties Fuji,
Gala, Jonagold, Pink Lady, Sundowner and Braeburn are
increasing in production. Most of the increase in the
volume of new varieties will come from recent plantings
                                                             Heavy load of Pink Lady apples growing
                                                                 at the Grove Research Station

Department of Primary Industries, Water and Environment                                    Page 45
Pome fruit (apples and pears) industry




(one to five years tree age). New cultivars make up nearly 84% of this age category.

There is a continuing emphasis on upgrading the industry rather than absolute increase in
total orchard plantings. The industry faces a further task of replacing unprofitable cultivars
and outdated planting systems.

Tasmanian Apple Variety Structure 1999/00
Variety                                        No. of trees (‘000)       Production
                                            1–5 years       6+ years   (‘000 tonnes)
Red Delicious                                  35.3           420.5          25,254
Golden Delicious                               30.3           119.7           7,034
Fuji                                          100.6           133.8           6,383
Gala                                          101.8            52.3           2,062
Jonagold                                       82.7            58.9           3,489
Pink Lady                                      41.8            32.9           1,919
Sundowner                                      39.2            19.8             645
Braeburn                                       26.2            34.8           1,428
*Other                                         10.2           170.8           9,320
Total                                        468.1          1043.5          57,534
Note: *(Varieties such as Democrat, Granny Smith and Sturmer)

Market demands have swung in favour of larger fruit in most instances. While an
18 kilogram carton in the 1960’s contained around 160 apples, cartons of the same weight
now contain around 100 apples. Also there has been a swing from green, yellow or poorly
coloured apples to red apples, which remain essential for the State’s main export markets in
South-East Asia and India. There is also a specific demand for striped red apples in some
markets, particularly in Taiwan and Japan. The Red Delicious remains popular in the South-
East Asian markets, but the price for the Tasmanian fruit has declined due to increased
supply and competition from some new varieties. There is a definite trend overall to bi-
colour and more highly flavoured varieties.

A range of apple packs have been adopted by the industry in line with specific market
requirements.
    ‘Heavy pack’ (21.5kg) carton for commodity varieties shipped to India, Bangladesh,
    Malaysia, Singapore and Taiwan.
    ‘Heavy pack’ (20kg) carton for Fuji to Taiwan.
    18kg carton for commodity varieties sent to Brisbane.
    12.5kg three layer ‘Mark 4’ carton for all cultivars despatched to Melbourne and Sydney
    markets and specialised cultivars destined to Brisbane.
    Special design 12.5kg pack for Fuji exported to Japan.
    Two layer 12.1kg ready to display pack (RDP) for Pink Lady and Sundowner exported to
    the UK.

New cultivars acquired by DPIWE and industry could help Tasmania meet future market
demands. The production of newer varieties such as striped Red Fuji selections, Red Gala,
Pink Lady, Braeburn and Red Jonagold is expected to grow from 25% of total production to
about 40% by 2005, due to the rising production from new plantings.

Industry structure
Production sector
Most orchards are owner operated. Many orchardists have other enterprises on their
properties. These include other horticultural crops, for example cherries and other stone
fruits, and in some instances the balance of land supports small-scale livestock enterprises.
Production is highly concentrated, with estimates that the 10 largest establishments account
for over half the production, and that 75% of production comes from 25% of orchards.
There are approximately 110 pome fruit holdings in the State.




Department of Primary Industries, Water and Environment                                  Page 46
Pome fruit (apples and pears) industry




The industry is located in a few relatively small areas of the State. The largest area, the
Huon Valley, includes Huonville, Cygnet and Geeveston. Other pome fruit districts include
the Tamar Valley in the north and the Spreyton-Sassafras area in the north-west. The
industry has been concentrated in the south, especially the Huon Valley. The south accounts
for 80% of production.

The aim of the industry is to produce predominantly dessert quality fruit. The general level
of pack-out for the fresh fruit market is about 70%. Most of the State’s fresh fruit is held in
controlled atmosphere storage before grading and despatching, thereby providing continuity
of supply throughout the year.

The Tasmanian apple crop makes up about 20% of the national total and ranks third in crop
volume behind NSW and Victoria. The State accounts for a clear majority (55–65%) of the
exports from Australia, continuing a long tradition of being the State dominating the
national apple export trade.

National Apple Production (‘000 tonnes)
Season             Vic            NSW              Tas      WA       SA       Qld       TOTAL
1992              105,700          75,500          50,400   37,400   21,600   25,500     316,100
1993               97,200          81,000          54,000   50,400   32,400   28,800     343,800
1994               94,657          63,336          54,954   44,579   23,089   26,305     306,920
1995               98,971          79,267          57,050   29,898   23,596   27,873     316,655
1996               78,988          62,335          52,398   38,200   20,314   28,361     280,596
1997              118,968          83,324          55,649   38,218   28,865   28,045     353,069
1998               94,311          77,580          46,692   34,173   24,849   31,249     308,856
1999              107,291          68,175          62,271   42,219   25,161   29,232     334,353
2000               98,150          67,037          57,536   40,664   23,431   32,830     319,651

Tasmania’s pear crop is less than 1% of the total Australian crop (fresh and canning). The
industry (which has an average gross value of about $600,000 a year) concentrates on the
specialist Bosc and Comice eating pears, which command a market premium.

The apple industry is one of the largest employers of casual labour among the agricultural
industries. Labour requirements are expected to increase by 15% from 2140 workers in the
year 2000 to 2460 workers by the year 2004 (Tasmanian Apple and Pear Growers
Association pers. comm.).

The total value of international apple exports rose from $14.7 million in 1998/99 to
$20.89 million in 2000/01. These exports make a significant contribution to the State
economy alongside beef, cheese, abalone and salmon.

Processing sector
The processing sector provides a residual market for orchardists. Undersized fruit and fruit
that is damaged by hail, frost, limb rub, insects or fungi are processed as either juice,
canned and dried fruit.

The processing sector involves several companies, including the following.
   Fresh apple juice, juice concentrate and cider: Cascade Beverage Company and
   Tasmanian Fruit Processing Company (Industry owned enterprise established in 2002).
   Canned apple products: Tasmanian Fruit Processing Company.
   Dried apple products: Franklin Evaporators.

The processing sector traditionally absorbs close to a third of the crop. However, recent
sharp falls in the price for juice, in particular, due to large imports from China and other low
production cost countries, have reinforced the industry’s aim to direct its fruit into the
dessert market.




Department of Primary Industries, Water and Environment                                  Page 47
     Pome fruit (apples and pears) industry




     Markets
     Fruit is marketed by a number of agents and distributed to major interstate retailers,
     wholesale markets and export destinations.

     The major packing sheds (each based on large orchards and most also packing for smaller
     growers) are Calvert Bros, SD Reid & Sons, AG & AJ Shield Pty Ltd, RK & CR Hansen,
     Clements & Marshall Pty Ltd, AM Salter & Sons, Squibb Bros, Driessen Bros, and GC Miller
     and Sons. There are seven licensed fruit exporters: Top-Qual, Australian Fruit Marketers,
     Tasfresh International, Hawker Shadforth, Trial Bay Orchards, Clements and Marshall, and
     Zenith.

     Quality assurance (QA) is now recognised as essential for efficient competitive horticultural
     businesses. Domestic and international clients are increasingly demanding QA products. QA
     within the Tasmanian apple industry will help ensure consumer confidence, efficient
     production and a competitive industry.

                                                               There has been a significant move towards
                                                               implementation of QA by the apple industry. In
                                                               addition to Certification Assured, all major
                                                               packing sheds operate under SQF2000 system
                                                               demanded by the main supermarket chains. The
                                                               scheme is backed by SQF1000 which covers
                                                               approved orchard (on-farm) practises,
                                                               particularly in relation to use of agrochemicals.

                                                               There are further ecolabelling developments in
                                                               this area with the move by European based
                                                               supermarkets, in response to their consumers, to
                                                               demand safe and healthy food produced with
                                                               minimal environmental impact.
 Sundowner apples growing at Grove Research
  Station, a centre for industry development,                  Tasmania’s major competitors are South Africa,
particularly in the areas of improved production               New Zealand, Chile, Argentina, China and the
        practices and quality assurance
                                                               USA (particularly Washington State).

     Infrastructure
     The industry is managed by the Tasmanian Apple and Pear Growers Association (TAPGA),
     which is a component of Apple and Pear Australia Limited (APAL), formerly known as the
     Australian Apple and Pear Growers Association (AAPGA). APAL was registered in August
     2002. This is a peak national industry body representing over 1,500 commercial apple and
     pear growers around Australia.

     Levy funds collected on sales of apples (1.53 cents/kg) and pears (1.64 cents/kg) are
     managed by the apple and pear Industry Advisory Committee (IAC). The IAC is a sub-
     committee of Horticulture Australia Limited with membership selected by APAL.

     At present the levies raise approximately $4 million annually and are matched by the
     Commonwealth Government. The funds are used for marketing, market promotion and
     research and development programs according to the priorities set by the Industry Advisory
     Committee.

     Government inputs and involvement
     Regulation
     There are no specific regulations covering the pome fruit industry, though strict quarantine
     requirements apply to material and fruit shipped into and out of Tasmania, and especially
     into markets such as Japan.



     Department of Primary Industries, Water and Environment                                              Page 48
Pome fruit (apples and pears) industry




Research, development and extension
The industry’s research needs are serviced by the Tasmanian Institute of Agricultural
Research (TIAR) and some private providers, while DPIWE provides services in the industry
development and technology transfer areas. The priorities for research, development and
extension are set by an Agricultural Research and Advisory Committee (ARAC) which is a
collaboration between DPIWE, TIAR and industry to ensure that the needs of industry are
being met.

DPIWE has developed a Tasmanian Quality Assurance Inspection System which replaced a
previous service run by the Australian Quarantine Inspection Service. The inspection service
is responsible for maintaining the State’s area freedom from fruit fly and its barriers to
fireblight.

The Government’s major resource in the industry is the Grove Research Station in the Huon
Valley. Its main activities are the testing and development of new cultivars, the production
of tested propagating material, the development of improved orcharding systems to deal
with existing and new cultivars, and work on alternative strategies for pest and disease
management. These strategies aim to ensure the industry move towards adoption of
integrated pest management (IPM) based on sustainable orchard management practises.

Industry value
During the last ten years, the State has had a very steady level of apple and pear
production, as well as a consistently moderate level of new apple plantings.

                                              91/92       96/97    97/98    98/99    99/00    00/01    01/02
Production
- Area (ha)*                                     2500       2500     2500     2300     2300     2100     2000
- Number of operators                                                 130      130     120*     110*     110*
- Direct employment (no.)
- Product quantity (‘000 tonnes)                  50.4      55.6     46.7     62.3     57.5     48.8     50.6
- Gross value ($m)                                41.0      54.2     38.2     53.1     45.5     41.3     55.5
Processing (%)*                                     30        30       25       25       20       20       20
- Number of operators                                4         4        4        4        3        3        3
- Product value ($m)
- Direct employment (no.)
Market (fresh) – local (%)*                          5        5        5         5        5        5        5
Market – interstate (%)*                            35       35       45        45       50       50       50
Market – export (%)*                                30       30       25        25       25       25       25
International exports ($m)                                                    14.7     20.9     20.9      20*
Note: * estimated
Source: industry surveys


Opportunities
The future of the pome fruit industry is seen in upgrading rather than expanding present
production. Essentially this means replacing unprofitable cultivars with high value cultivars.
The industry has seen significant investment in high-density plantings of newer varieties in
the past five years, and is positioned to capitalise on its mild temperate climatic conditions
and relatively reliable production and availability of land and water resources.

During the last five years the number of holdings and the total orchard area have
decreased, while the gross value of the industry has increased in nominal terms from
around $41m to around $55.5m.

The main opportunities for sustainable industry development include:
   increased productivity and packout (high quality fresh fruit component);
   continued introduction and development of new superior cultivars and rootstocks;
   adoption of intensive apple production systems;



Department of Primary Industries, Water and Environment                                                 Page 49
Pome fruit (apples and pears) industry




    research programs to update knowledge of new cultivars and rootstocks, and to improve
    both orchard management and post-harvest techniques;
    continuous improvement of integrated fruit production strategies based on minimal
    impact on environment;
    implementation of ‘ecolabelling’ to meet the European supermarket requirements;
    adoption and implementation of a uniform approach to quality assurance;
    expansion of exports into existing overseas markets, especially high quality markets in
    Taiwan, Japan and the UK; and
    development of new markets in China and South Korea.

Challenges
The main factors affecting the industry’s future stability are considered to be:
   the development of the world apple market, particularly in terms of whether a general
   oversupply may continue in light of potentially huge Chinese production and exports;
   oversupply on the domestic market and strong competition from other fruits;
   direct strong competition from New Zealand, South Africa, Chile, Argentina, China and
   Washington State;
   risk of loss of quarantine area freedom for fruit fly;
   the value of the Australian dollar;
   microeconomic reform of coastal shipping and
   ports, and continuation of the Tasmanian
   Freight Equalisation Scheme;
   the possible entry of imports to the Australian
   market; and
   stability of the processing sector.

Further information
Predo Jotic
Senior Horticulturist
Grove Research Station
Food, Agriculture and Fisheries Division, DPIWE
99 Pages Rd
Grove, Tasmania, 7109
Ph: 03 6266 4305                                               Prolific blossom on Pink Lady apples, growing at
                                                                             Grove Research Station
Email: predo.jotic@dpiwe.tas.gov.au

Mark Salter                                               Apple and Pear Australia
President, Tasmanian Apple & Pear Growers                 62–64 O’Connell St
   Association                                            Melbourne, Victoria, 3000
Macquarie Wharf No.1, Hunter St                           Ph: 03 9329 3511 Fax: 03 9329 3522
Hobart, Tasmania, 7000                                    Web: www.aapga.com.au
Ph: 03 6231 1944 Fax: 03 6231 1966
Email: tapga@bigpond.net.au
Web: www.tapga.asn.au
Horticulture Australia                                    Tim Reid
Level 1, 50 Carrington Street                             SD Reid & Sons
Sydney, New South Wales, 2000                             Geeveston, Tasmania, 7116
Ph: 02 8295 2300 Fax: 02 8295 2399                        Ph: 03 6297 7373
E-mail: info@horticulture.com.au                          Mobile: 0418 125 178
Web: www.horticulture.com.au
Howard Hansen
“Applegrove”, Grove 7109
Ph: 03 6264 0200
Mobile: 0418 122 237




Department of Primary Industries, Water and Environment                                            Page 50
  Stone fruit industry




  STONE FRUIT
  Introduction
  This industry sector covers the production of apricots, cherries, peaches/nectarines,
  European/Japanese plums. Production is focussed on the fresh fruit market and takes
  advantage of Tasmania’s late season of production (latest production season in Australia)
  and natural quarantine advantages (e.g. area freedom from fruit fly).

  The Tasmanian stone fruit industry has undergone considerable change in both production
  and structure since 1980. Before 1980 the industry had contracted from its peak prior to
  1945, when the industry, predominantly growing apricots, supplied a major processor in the
  south of the State. The decline in production up to 1980 paralleled the decline in the
  processing industry. There is now no major processing industry in Tasmania.

  Since 1980 the industry has restructured to supply fresh fruit to the fresh fruit market. As
                                                   well as supplying local market demand,
                                                   the industry also extends the availability
                                                   of fresh produce to major mainland
                                                   markets. In 2002/03 approximately 10%
                                                   of the marketed sweet cherry crop was
                                                   exported. Markets included Hong Kong,
                                                   Taiwan, Thailand, Singapore, UK, Europe
                                                   and USA. Trial shipments of apricots have
                                                   also been exported to the UK.

                                                              All recent orchard plantings have been at
                                                              high plant densities using varieties specific
                                                              to the fresh fruit market. Much of the
                                                              expansion has occurred through
                                                              newcomers entering the industry, with
                                                              only limited expansion undertaken by
                                                              traditional growers. A recent trend has
                                                              been the establishment of cherry orchards
Cherries being grown at the Grove Research Station
                                                              by traditional apple growers as an
                                                              increasing trend towards diversification.

  Although relatively small by mainland standards, the Tasmanian industry is significant in
  terms of the fresh fruits market and export potential.

  Stone Fruit Production by State (tonnes), 1999
                      NSW            Vic             Qld       SA          WA          Tas         Total
  *Peaches            15,082          39,837          3,617     5,531       1,933          36      66,036
  Nectarines          11,794           8,801          2,891    11,414       2,453          70      27,423
  *Apricots              720           9,624            311    10,361         255         212      21,483
  Plums                2,786           5,726          1,468     1,150       4,176           0      15,306
  Cherries             2,845           1,907              8       923          85         252       6,020
  Totals             33,227          65,895           8,295   19,379       8,902          570     136,268
  Note: * The production of peaches and apricots includes processing.
  Source: ABS agricultural commodity data, Stone Fruit Industry surveys

  ABS data shows that total stone fruit production in Tasmania was 570 tonnes in 1999.
  However, production estimates from industry surveys and DPIWE statistics indicates
  production of around 1,200 tonnes. (Due to the manner in which ABS figures are derived,
  smaller producers and new developments are not included in the statistics.)

  The growth in investment in stone fruits in Tasmania is highlighted by tree planting
  statistics, derived from a grower survey conducted by the State’s peak industry body, the
  Tasmanian Stone Fruit Association.




  Department of Primary Industries, Water and Environment                                           Page 51
Stone fruit industry




Tree Numbers
                   In ground ‘99           Planted ‘00          Planted ‘01        Committed      Total
                                                                                  plantings ‘05
Cherry                       313,047                27,057           43,260              54,600    437,964
Apricot                       96,684                 8,625           18,000             –1,000     122,309
Plum                            7,720                5,760             7,100             8,000       28,630
Peach                         10,590                      145                 0          7,500       18,235
Nectarine                     20,800                      135                 0          7,500       28,435
Source: Tasmanian Stone Fruit Association survey, February 2001.

The Tasmanian stone fruit production season commences early in December with early-
maturing cherry varieties, and peaks during January and February with the bulk of the
cherry and apricot harvest. Late peaches, nectarines and plums extend the season into
March and early April.

The Tasmanian Stone Fruit Association, in collaboration with the national stone fruit peak
industry body, Summerfruits Australia, has developed a generic quality assurance system
for Tasmanian growers based on SQF 1000 and 2000. To date, about 20% of growers have
received training and some 10% of producers have on-farm, accredited systems. Most
producers, currently not implementing on-farm quality assurance, market as approved
suppliers, under the quality assurance systems of wholesalers, agents and packers.

Industry structure
Production sector
Cherries and apricots are the main stone fruit crops grown in Tasmania. Except for apricots,
stone fruits are grown commercially in most regions of the State including: Huon/Channel,
south-east districts (including the Coal River Valley), Derwent Valley, Tamar Region, east
coast and north-west coast. Apricot production is restricted to the south-east district and
lower Derwent Valley region because of their particular climatic needs during flowering.
Cherries are grown in all regions with the main production region occurring south of Hobart
(Huon/Channel districts). Significant plantings of cherries are occurring in the Derwent
Valley to capitalise on that region’s lower summer rainfall. Peaches, nectarines and plums
are grown mainly in the Tamar Valley and Coal River Valley.

There are more than 100 orchardists (full-time or part-time) growing stone fruits. Although
70% of current growers have production units less than two hectares in size, several
significant investments involving orchards in excess of 20 hectares have occurred during the
past five years. These include: Tasmanian Cherry Company and Reid and Sons in the
Derwent Valley; Hansen’s Orchards and Tas Valley Orchards in the Huon; Zenith Universal
in the Tamar and Huon Regions; Red Night and Qew Orchards in the Coal River Valley.

Processing sector
There is no major processing outlet for stone fruits in Tasmania. Some on-farm processing
is being done to produce jams, chutneys and fruit juices. Production of boutique products
(jams, preserves, fruit ice-creams, sorbets, etc.) is providing an outlet for some second-
grade stone fruit by companies such as Doran’s Fine Foods, Emma’s Choice, Tasmanian Fine
Ice-cream.

Markets
Tasmania’s season of production for cherries and apricots is the latest in Australia. The main
competition for ‘late’ Tasmanian fruit comes from New Zealand. Late market opportunities
on the mainland are being exploited by the Tasmanian industry, and there is scope for
further expansion to meet this market demand. In addition, Tasmania’s unique position of
having ‘area freedom status’ for fruit fly presents an opportunity to export stone fruits into
South-East Asian and Northern Hemisphere markets. Currently about 90% of the fresh fruit


Department of Primary Industries, Water and Environment                                              Page 52
Stone fruit industry




produced in Tasmania is sold on the Australian domestic market. The remaining 10% is sold
overseas (Taiwan, Thailand, UK, Europe, USA).

However, the situation with cherries and apricots is changing with production predicted to
increase rapidly. Significant market opportunities for fresh Tasmanian cherries and apricots
exist within Australia. Woolworth’s Australia Ltd has been negotiating with the Tasmanian
stone fruit industry to be its major supplier of late season produce throughout Australia.
Currently New Zealand is the major supplier for late season cherries and apricots to
Woolworth’s Supermarket chains.

Estimate of direct sales of Tasmanian stone fruit sold in Australia, 2002
 Seller                        % of market
 Wholesalers                        50
 Retailers                          30
 Farm Gate Sales                    20

Infrastructure
The stone fruit industry is essentially self-regulating. In 1986 the industry formed a
grower’s organisation, the Tasmanian Stone Fruit Association (TSA). This organisation is
affiliated with two national industry bodies, Cherry Growers Australia and Summerfruits
Australia. The Tasmanian Stone Fruit Association has a membership of about 80% of the
State’s stone fruit growers, and has developed a close working relationship with DPIWE for
delivering research, development and extension to growers.

The industry is a levy-paying industry with levies collected at the point-of-sale. Industry
levies are matched by Commonwealth Government funds and contribute to a national
research, development and extension and marketing program. In 1998 the Tasmanian
industry began funding a half-time Industry Development Officer. This position is now a full-
time position funded through Tasmanian Stone Fruit Association, Summerfruits Australia
and Horticulture Australia Limited. DPIWE provides office and administration support for this
position at the Grove Research Station.

Stone fruits, and in particular cherries, are capital intensive industries with establishment
costs per hectare ranging from $40,000 to $60,000 (trees, irrigation, land preparation,
machinery). Additional costs for cherries include bird-proof netting ($8,000–30,000 per
hectare for temporary versus permanent netting) and $60,000–100,000 per hectare for
rain-protective covers. Packing sheds with grading and cool room facilities represent a
further capital outlay varying from $40,000 to $500,000, depending on scale of operation.

Cooperatives for the sharing of facilities do not exist but many smaller-scale producers rely
on larger growers/packers to grade, pack and market their fruit. Currently there are six
larger ‘sheds’ that pack and market for smaller producers. Most produce sold interstate is
freighted via sea–road refrigerated containers. Freight rates are reasonable and the service
is now daily since the introduction of the twin ferries across Bass Strait. Fruit marketed
overseas is normally sea–road transported to Tullamarine Airport.

Government inputs and involvement
Regulation
There are no specific Acts or Regulations that relate to this industry, though quarantine
requirements apply to imports and exports, with exports also covered by the
Commonwealth Export Control Act 1982.

Research, development and extension
Between 1984 and 1992, the Tasmanian Government invested about $1 million in the
industry in a program designed to revitalise the industry and change its direction from a
dependency on processing to a fresh fruit market base. The industry is currently served



Department of Primary Industries, Water and Environment                                 Page 53
Stone fruit industry




through the Horticulture Branch of DPIWE, plus analytical and laboratory inputs, and
cooperative research with the Tasmanian Institute of Agricultural Research.

Research, demonstrations, workshops and field days are conducted at the Grove Research
Station and growers’ properties, and are usually conducted as cooperative ventures by
DPIWE and Tasmanian Stone Fruit Association.

The Quarantine Branch of DPIWE, acting on behalf of Australian Quarantine and Inspection
Service, is responsible for ensuring that area freedom status for fruit fly is maintained, and
in addition provides inspection and certification of pack houses for export purposes.

Industry value
The stone fruit industry, in particular cherries and apricots, has undergone considerable
growth since the early 1980s. In 1980 there were five commercial cherry growers and about
15 commercial but small apricot producers. In 2003 there are more than 120 commercial
cherry growers and four large commercial apricot producers. Many trees are young and yet
to bear fruit and new trees are continuing to be planted.

                                              91/92       96/97   97/98    98/99      99/00    00/01    01/02
Production
- Area (ha)*                                                                            325                325
- Number of operators                              50                                                    c.120
- Direct employment (no.)^                         10                                                       40
- Product Quantity (tonnes)*                      296               453                1,200               900
- ‘Farm gate’ value ($m)                          1.2               2.5         2.3     5.75      7.8     5.75
Processing
- Number of operators
- Product value ($m)
- Direct employment (no.)
Market (fresh) – local (%)
Market – interstate (%)
Market – export (%)
International exports ($m)
Note:
*DPIWE or Industry survey.
^ There is also a substantial seasonal labour requirement for picking fruit.
Source: ABS agricultural commodity data, DPIWE industry surveys.

Further production of cherries and apricots is likely to rise quickly as young trees planted
during the last five years come into production. The following table provides estimates of
likely industry growth, based on current tree numbers. No provision is made for future tree
planting trends.

Expected industry growth, 1999/00 – 2005
                                     1999/00                                          2005
                       Area       Production          Farm Gate      Area        Production      Farm Gate
                       (ha)           (t)             Value ($m)     (ha)            (t)         Value ($m)
Cherries                 200              600                 4.5      350               2000            16
Apricots                 100                  500             1.0         150            2000                8
Other Stone                25                 100            0.25         70              500              1.2
Fruit
Total                    325                1200             5.75         570            4500            25.2


Opportunities
    Many market opportunities exist for fresh Tasmanian stone fruits and are under-
    exploited. A considerable quantity of fruit still enters Tasmania that could be produced
    locally. Mainland markets (Melbourne, Sydney, Adelaide and Brisbane) are also well
    under-supplied with produce during Tasmania’s peak period of production.




Department of Primary Industries, Water and Environment                                                  Page 54
Stone fruit industry




    Cherries and apricots are the stone fruit crops with the greatest potential for
    development in Tasmania. Both crops have a clear, late season production advantage
    both within Australia and overseas.
    The only other region in the Southern Hemisphere with a production season similar to
    Tasmania’s is the south island of New Zealand. Tasmanian fruit competes effectively
    with New Zealand fruit on both domestic and overseas markets.
    Tasmanian cherries are already being exported to some Asian and European markets.
    Japan has expressed interest in Tasmanian cherries and DPIWE, together with the local
    industry body, is developing the necessary disinfestation protocol to export cherries into
    Japan. Quarantine barriers against Tasmanian cherries going into USA have been lifted,
    but will require continued monitoring for light brown apple moth.
    A recent cherry orchard investment analysis identified an Internal Rate of Return for
    invested capital of 19% for a new four hectare development. Considerably higher rates
    of return may be achieved for orchard expansion. This opportunity underlies recent
    investment in capital-intensive orchard developments.
    Apricots have undergone considerable development
    in the past five years. Significant market
    opportunities exist, both domestic and overseas, for
    Tasmanian apricots, especially in Europe. Trial
    shipments of apricots have been well viewed in the
    UK to date.
    DPIWE and industry are working on programs to
    address the problem of weather vulnerability (variety
    evaluation, pre-harvest chemical treatments, orchard
    management systems, rain-protective covers).
    DPIWE’s advisory and information program is
    continuing to encourage the apple industry to
    diversify into stone fruit production (especially
    cherries).

Challenges
    As well as food safety and quality assurance
    guarantees, markets, especially European markets,
    are increasingly demanding assurances that food has
    been produced in a manner not detrimental to the
    environment, while also addressing issues related to
    worker health and safety and pollution control. In the
    future growers will need to adopt some form of               Cherries are a significant growth
    ‘ecolabel’ to substantiate their claims of ‘safe, quality          industry in Tasmania
    and green’. Government will assist in keeping
    industry informed of market trends and provide
    assistance to producers seeking ecolabel accreditation.
    Availability of seasonal labour for harvesting is becoming an issue and will become more
    urgent as production increases across a number of industry sectors (stone fruits, wine
    grapes, vegetables, olives, apples etc). Providing adequate facilities for seasonal labour
    will also be an issue.
    Major weaknesses in the Tasmanian industry to be addressed are: lack of centralised
    marketing; relative size (volumes of supply and continuity of supply for export
    markets); vulnerability to weather (large potential fruit losses in some seasons); lack of
    a major processing industry to absorb lower grades of fruit; and availability of airfreight
    space during the Christmas–New Year holiday period.




Department of Primary Industries, Water and Environment                                     Page 55
Stone fruit industry




Further information
Dr Wayne Boucher
Manager, Horticulture Branch
Food, Agriculture and Fisheries Division, DPIWE
Grove Research Station
99 Pages Rd
Grove, Tasmania, 7109
Ph: 03 6266 4305
Email: wayne.boucher@dpiwe.tas.gov.au

Heather Chong                                             Cherry Growers Australia Inc.
President                                                 6 Frederick St
Tasmanian Stone Fruit Association                         Cavan, South Australia, 5094
Qew Orchards
PO Box 182
Richmond, Tasmania, 7025
Ph: 03 6260 4509
EE (Ted) Domeney                                          Summerfruit Australia Inc.
Domeny Brothers                                           c/- PO Box 19,
3949 Channel Hwy                                          Brisbane Market, Queensland, 4106
Flowerpot, Tasmania, 7054
Ph: 03 6267 4502
Howard Hansen                                             Darren Broadby
Hansen Orchards                                           Perfecta Exports
‘Aplgrove’, Basin Rd                                      PO Box 3126
Grove, Tasmania, 7109                                     Ulverstone, Tasmania, 7315
Ph: 03 6266 4245                                          Ph: 03 6425 6999




Department of Primary Industries, Water and Environment                                       Page 56
Wine industry




WINE
Introduction
Tasmania is becoming firmly established as a clearly defined cool climate wine region. The
industry is integrated into the Tasmanian economy employing Tasmanians in tourism,
marketing, packaging, export development, wine making, and in tending vineyards. The
industry is experiencing active growth with development of new small to medium sized
businesses and some consolidation.

The Tasmanian Wine Industry Strategic Plan 2002–2007 by the Vineyards Association of
Tasmania identifies four pillars of wine style that deliver value to Tasmanian wine
consumers. Tasmania produces high quality sparkling wines while over 100 brands of Pinot
noir express the Tasmanian geography in terms of wine style; complex, intense and vibrant
The whites, Riesling and Sauvignon blanc, have a fresh intensity, and Chardonnay has fine
structure and balanced intensity. A wide range of other varieties reflect the industry’s
development of niche markets.

The recent vineyard developments began in the mid 1970s. During the mid to late 1980s
the industry expanded significantly with many new developments, some supported by
capital from European countries. Bearing area quadrupled in the five years to 1991, when it
reached nearly 200 hectares. The 1990s saw an increase in contracted fruit growing with
some new developments and expansions specifically targeting fruit production. In 2002
there were 912 hectares of vineyard planted.

Production is marked by strong fluctuations. In 1998 the vintage first passed 3,000 tonnes.
Production was expected to reach 6,000 tonnes by the
2002 vintage but only achieved 2,496 tonnes. Climatic
conditions surrounding the period of fruit set are a major
influence on production levels. Vintage (picking) is in
autumn, beginning with sparkling varieties in mid March,
and with the very last fruit sometimes hanging until early
June.

The Tasmanian industry remains a small player defending
a quality niche in the national context. In Australia the
wine industry has been expanding rapidly, and Tasmania’s
production still represents less than 0.5% of the national
total. It accounts for a significantly higher proportion of
value, due to a high average price based on exclusive
production of premium wines.

Industry structure
Production sector
The majority of enterprises are specialised grape and wine
producing operations, although a small number are
diversified units of larger horticultural, grazing and         Grapes at Tamar Ridge Winery
cropping properties. Production has grown from 30
hectares of grape-bearing area in 1985, with an output of
100 tonnes, to 712 bearing hectares producing 2,496 tonnes in 2002.

In 2002, the four largest businesses in Tasmania produced 1,351 tonnes (54%) of the total
2,496 tonnes produced. However, their area of production accounted for only 368ha (40%)
of the total 910ha in the State. New smaller investors are planting vineyards and the four
largest established vineyards occasionally consolidate established vineyards into their
businesses. Generally though, growth processes are moving the industry away from
consolidation in larger businesses.




Department of Primary Industries, Water and Environment                              Page 57
Wine industry




Production of Major Grape Varieties 2002
Variety                         Production                           Percentage
                                 (tonnes)
Pinot noir                          878                                35
Chardonnay                          884                                35
Cabernet Sauvignon                  115                                 5
Riesling                            153                                 6
Sauvignon blanc                     238                                10
Other varieties*                    228                                 9
Total                              2496                               100
Note: * Other varieties include: Pinot gris, Merlot, Gewürztraminer, Cabernet Franc, Semillon, Muller
Thurgau, Pinot meunier, Gamay, Petit Verdot, Shiraz.


Processing sector
There are 13 major and 15 smaller commercial wineries in Tasmania. Contract wine making
services are made available to growers with a range of commercial arrangements.

Currently the amount of Tasmanian grape production sold to interstate wineries is
decreasing as these businesses establish processing facilities in the State. Domaine
Chandon and Southcorp purchase fruit to produce blended sparkling wine interstate.
Taltarni has its own vineyards and winery in Tasmania at Clover Hill. Yalumba have
established a winemaking presence in Tasmania for their Jansz brand. BRL Hardy is also a
significant purchaser of Tasmanian sparkling base fruit and has recently established a
winemaking presence in the State.

Markets
Export markets are particularly important for larger producers, though the lower 2002
vintage will delay the increasing of export market share.

All levels in the wine industry are progressively investing in the development of on-site
cellar door infrastructure. Cellar door sales are particularly important for smaller producers,
as the Commonwealth Government Wine Equalisation Tax is not levied on a portion of these
sales. Integration of cafe and other tourism facilities into wineries is also expanding.

Currently the major competitors in the various markets are those vineyards and wineries
located in other cool climate areas of Australia: Tumbarumba in New South Wales, the
Mornington Peninsula in Victoria, the Adelaide Hills in South Australia, and Mt Barker in
Western Australia. New Zealand, New York, Oregon and Canada are ‘New World’


Expectations for the Tasmanian Wine Market
Markets                              2001                               2007        2001      2007
                                    (cases)                            (cases)      (%)       (%)
Tasmanian:
Restaurant, Wholesale, Retail          47,728                             77,300     16.5        12
Cellar door                            19,525                             32,200     6.75         5
Direct sales (phone, fax, internet,    21,695                             48,300      7.5       7.5
wine club)
Interstate                             57,852                            128,900     25.5       20

International                                              54,236        199,800    18.75       31

Total Wine sales                                          217,000        486,500      75      75.5

Interstate fruit sales in ‘case-                         72,260          157,900      25      24.5
equivalents’                                       (956 tonnes)     (2090 tonnes)



Department of Primary Industries, Water and Environment                                          Page 58
Wine industry




competitors in European markets, producing similar wine styles. Champagne, Burgundy and
the cool areas of Europe are the largest volume competitors in premium cool climate wines.

The market for premium cool climate Tasmanian wines is also affected by market pressure
in the whole wine market from warm climate wines. The Tasmanian Wine Industry Strategic
Plan highlights that international sales are expected to become a stronger feature of the
Tasmanian wine market.

Infrastructure
The industry grower organisation, the Vineyards Association of Tasmania, has been in
existence since 1974. It has developed strong ties with various Government organisations
(DPIWE, Department of Economic Development, TAFE Tasmania and the Licensing
Commission). Other organisations that operate in the industry include the wine route
committee’s, the Tasmanian Vine Improvement Association and the Tasmanian Pinot noir
Forum. The Vineyards Association is recognised as the peak industry body in Tasmania.

The levels of both sophistication and capital required for vineyard and winery developments
are very high. The resultant high overheads generate a strong requirement for economies of
scale in order to maintain competitiveness. As businesses get larger however administration
and management must become more sophisticated as more staff are involved. The
management step from owner/operator to integrated medium sized business needs to be
taken with quality coordination in mind. New wine businesses continue to establish, and
many existing vignerons are investing heavily.

Transport services for cellar door sales is an area with potential for cooperation. Taking
cases of wine on aircraft out of Tasmania cause problems for visitors.

Government inputs and involvement
Regulation
The Liquor and Accommodation Act 1990 is “An Act to regulate the sale of liquor, to provide
for the licensing of certain accommodation and to provide an appellation system for
Tasmanian wine”. The newly amended version of this Act provides the statutory authority
for the collection of industry statistics by DPIWE.

Signage is a perennial issue for the wine industry. Wine route committees are working with
the different levels of government to meet the needs of visitors.

Research, development and extension
DPIWE has supported the development of the industry by retaining one full-time industry
development officer since 1986. In conjunction with the Licensing Commission, DPIWE has
implemented and administered an Appellation of Origin system that commenced in 1986.
Continuing the legislative Appellation system is currently under review.

DPIWE provides an advisory program based on industry planning, best practice
implementation, and vine improvement. It also maintains links with the industry through
the Vineyards Association of Tasmania committee and subcommittee meetings. DPIWE is
also represented on the National Vine Health Steering Committee.

Research, development and extension is undertaken under the coordination of the
Vineyards Association of Tasmania Technical Committee. Partners in this approach include
suppliers (supporting field days), the Grape and Wine Research and Development
Corporation, the Cooperative Research Centre for Viticulture, the Australian Wine Research
Institute, private research providers (e.g. Serve Ag), DPIWE and the University of
Tasmania. Other important development activities include the wine shows and the
Tasmanian Pinot noir Forum. The Vineyards Association of Tasmania is a first contact point
for national coordination of industry development issues.



Department of Primary Industries, Water and Environment                                  Page 59
Wine industry




The Tasmanian Institute of Agricultural Research has allocated funds for a PhD study into
factors effecting the variability of yield in Tasmanian vineyards. This study aims to address
aspects of this major production risk.

Industry value
                                              1991        1997     1998     1999     2000     2001
Production & Processing
- Area covered (ha)                                196      462       522     595      731      851
- Number of individual vineyards                    56      104       112     119      132      143
- Direct employment (no. FTE)                                         200
- Estimate of yield (tonnes)                       966     1,448    3,113    3,199    3,263    4,645
- Product value ($m)                                11        17       37       38       39       55
Market destination – local (%)                                                                 30.75
Market destination – mainland (%)                                                              25.50
Market destination – overseas                                                                  18.75
export (%)
Value of exports (mainland &                       c.2       c.4      c.5      c.6      c.8     c.10
overseas)
Note:
* Preliminary figures
Value based on 66 cases per tonne and $180 per case.
45ha of the current 912ha is organic.
FTE = Full time equivalent positions
Source: DPIWE survey and registration data


Opportunities
The Tasmanian Wine Industry Strategic Plan 2002–2007 outlines an integrated approach to
industry development. The elements include the following.
   Consideration of growth, investment and profitability issues especially succession
   planning.
   Monitoring developments in taxation and where possible, encourage changes that
   encourage quality wine production and regional development.
   Focus marketing communications around the benefits of four pillars of Sparkling wine,
   Pinot noir, cool climate whites (Chardonnay, Riesling and Sauvignon blanc) and other
   wines.
   Incrementally develop wine tourism infrastructure, and integrate wine tourism with
   other tourism and food production.
   Ensure the regulated distribution environment for Tasmanian wine operates in the
   interests of the State.
   Technical development of wine quality, including developing a detailed understanding of
   the factors effecting the components of yield.
   Technical and business development of sustainability, including developing an industry
   wide environmental management system.
   Ensure adequate training and industrial relations systems are in place.
   Support the lead role of the Vineyards Association of Tasmania in coordinating industry
   development activities whilst recognising the value of independent groups such as the
   Tasmanian Pinot noir Forum and the Tasmanian Vine Improvement Association.
   Ensure a close relationship can be maintained between government officers and industry
   leaders to maximise the benefits from a coordinated approach.

Challenges
    Vintage to vintage variation is a feature of wine that needs managing in the vineyard,
    the winery, the marketplace and in the accounts.
    Water is limiting in some areas of the State.
    Ensuring the integration and various strategies outlined in the Strategic Plan are
    undertaken.




Department of Primary Industries, Water and Environment                                                Page 60
Wine industry




Further information
Duncan Farquhar
Horticulturist
Food, Agriculture and Fisheries Division, DPIWE
GPO Box 44
Hobart, Tasmania, 7001
Ph: 03 6233 6811 Fax: 03 6228 5936
Email: Duncan.Farquhar@dpiwe.tas.gov.au

Di McArthur                                               Tasmanian Vine Improvement Association
Executive Officer                                         PO Box 3089
Vineyards Association of Tasmania Inc                     Launceston, Tasmania, 7250
PO Box 1172                                               Ph: 03 6331 4585 Fax: 03 6334 9077
Launceston, Tasmania, 7250                                Email: info@tvi.asn.au
Ph: 03 6334 9721 Fax: 03 6331 3496                        Web: www.tvi.asn.au
Email: vat@branchoffice.com.au
Tasmanian Pinot noir Forum                                Tasmanian Wine Show Society
PO Box 3089                                               PO Box 1108
Launceston, Tasmania, 7250                                Launceston, Tasmania, 7250
Ph: 03 6331 4585 Fax: 03 6334 9077                        Ph: 03 6334 1775 Fax: 03 6334 1775
Email: info@pinot-noir.org                                Email: enquiries@taswineshow.org
Web: www.pinot-noir.org                                   Web: www.taswineshow.org
Grape and Wine Research and Development                   Royal Agricultural Society of Tasmania
   Corporation                                            PO Box 94
PO Box 221                                                Glenorchy, Tasmania, 7010
Goodwood, South Australia, 5034                           Ph: 03 6272 6812 Fax: 03 6273 0524
Ph: 08 8273 0500 Fax: 08 8373 6608                        Email: admin@rast.com.au
Email: gwrdc@gwrdc.com.au                                 Web: www.rast.com.au
Web: www.gwrdc.com.au
Cooperative Research Centre for Viticulture               Australian Wine Research Institute
PO Box 154                                                PO Box 197
Glen Osmond, South Australia, 5064                        Glen Osmond, South Australia, 5064
Ph: 08 8303 9405 Fax: 08 8303 9449                        Ph: 08 8303 6600 Fax: 08 8303 6601
Email: crcv@saugov.sa.gov.au                              Email: Rae.Blair@awri.com.au
Web: www.crcv.com.au                                      Web: www.awri.com.au




Department of Primary Industries, Water and Environment                                            Page 61
Berry fruit industry




BERRY FRUIT
Introduction
The principal berries grown commercially in Tasmania are strawberries, raspberries,
blackcurrants and blueberries. At one time, Tasmania produced large quantities of berry
fruit from many small farms, particularly raspberries and blackcurrants for processing. The
emphasis is now on large scale mechanised production for the processing market and
supplying the high value fresh berry market.

The farm gate value of the industry is estimated at around $4.5 million, from nearly 200
hectares of bearing plants. The industry is still a minor player nationally, contributing a little
over 2%. In the last 5 years there have been changes to the make up of the berry fruit
industry in Tasmania. Raspberries and strawberries are now the main crops, comprising
60% of the industry value. Winter production of strawberries for the Japanese market is a
new and potentially expanding enterprise. Blackcurrant production has declined in recent
years due to a slow replacement program for ageing crops. Blueberries and other brambles
are the smaller contributors, although the potential for blueberry production has yet to be
realised.

The State has several advantages which should contribute towards a viable berry industry,
including:
    climatic suitability for berry fruit growing and a later growing season than mainland
    Australia;
    relative freedom from insects (including fruit fly) and diseases subject to quarantine
    restrictions;
    absence of many diseases and insect pests;
    an image based on the State’s relatively clean environment; and
    production in the Northern Hemisphere off-season and in the late season for interstate
    supply.

The industry is constrained by:
   remoteness of major markets from Tasmania;
   difficulty in obtaining labour for harvest; and
   inability to exploit economies of scale.

Industry structure
Production sector
The majority of fresh berry fruit production is from 10 major producers, being full-time
berry growers. Other berry fruit production is part of diversified farming activities.

The industry is distributed in the major horticultural regions of the State with the major
production areas being the Huon Valley, Derwent Valley, Tamar Valley and Deloraine
districts. Most blackcurrant production is in the Derwent Valley and Huon Valley.
Raspberries are grown in the Deloraine area, the Huon Valley and Derwent Valley.
Production of strawberries and blueberries is widespread. Tasmania has climatic advantages
for producing strawberry runners and raspberry nursery material for interstate sale.

Processing sector
The Cascade Beverage Company is the largest buyer of berry fruit for processing and has an
annual requirement for about 600 tonnes of blackcurrants. It also buys raspberries for
processing into fruit juice and value-added products. These products are sourced from
around eight growers located in the Huon and Derwent Valley. Most other berry fruit are
sold on the fresh market, with a small percentage of the crop being frozen and/or processed
into other products such as jam, berry wine and pies.




Department of Primary Industries, Water and Environment                                    Page 62
Berry fruit industry




The demand for block-frozen berry fruit has declined in recent years in favour of free-flow
individually frozen berries. A few growers already produce small volumes of the flowable
frozen product by freezing fruit on trays in larger freezers.

Markets
The most recent expansion in export berry fruit has been winter production of green house
strawberries for the Japanese confectionary market. The company Ichigo Australia Pty Ltd
began commercial production in 2000, including contracting local producers to grow
Japanese strawberry varieties. The export of raspberries ceased in the face of unfavourable
exchange rates and fierce competition from South American countries and New Zealand.
The outlook for export of fresh blueberries is more promising, with potential markets in
Europe and Japan, but there is a need for the right mix of capital and skills if this
opportunity is to be realised.

Most interstate marketing of fresh berry fruit is to wholesale markets in the capital cities.
Many local growers are becoming more involved in their own marketing and tend to bypass
local agents.

Interstate prices for fresh berry fruit do not begin to increase until late February. Several
recent developments reinforcing this situation include:
    the acquisition and wider production by interstate growers of raspberries less affected by
    low temperature flower initiation;
    the advent of very large-scale strawberry growing, with significant economies of scale,
    in Victoria, South Australia and Western Australia;
    large-scale blueberry production in New South Wales; and
    the use of controlled atmosphere storage to extend the marketing period for mainland
    blueberries.

Infrastructure
Significant commercial fresh berry fruit growers are members of the Tasmanian Berry
Growers Association. The Association is no longer active with membership tending to switch
to the national commodity associations. The greatest degree of coordination and
infrastructure support exists in the blackcurrant sector. Production limits are effectively
determined by grower agreements with the processor, and there is some contract
mechanical harvesting. Transport of fruit grown under agreements is organised by the
processor.

In the fresh berry fruit sector there is little coordination of production, quality assurance,
marketing or transport. Some regional groups have aligned to address this situation,
particularly with respect to negotiating transport and consumables. As a result, returns for
fruit often fall sharply when large volumes of fruit arrive at the mainland markets and
conversely, there is insufficient volume of uniformly high quality product for export markets.

Transport of fresh berry fruit to mainland and export markets is mainly by air supplemented
by sea transport, particularly for blueberries.

The capital infrastructure required for berry fruit production can be high. Winter production
of strawberries for the Japanese market requires a large capital investment in polyhouses.
Fresh field-grown fruit requires capital investment in cool rooms, packing sheds, plants and
trellising. The processing sector relies directly on the capital investment in mechanical
harvesters and indirectly on the investment in processing technology.

During the past 15 years, superior raspberry varieties with an extended season of supply
and more suited to the fresh market have replaced most older plantings. High quality
planting stock of these varieties is usually readily available to growers. Infection by
Phytophthora fragare var. rubii adds significant planting material risk to the establishment
of new raspberry plantations.



Department of Primary Industries, Water and Environment                                Page 63
Berry fruit industry




The number of blueberry plant propagators has declined greatly during the past 10 years to
the point where there are now very few sources of high quality planting material in
Australia.

Increasingly, the right to propagate plant varieties is subject to plant varieties rights
legislation. This has important implications for plant propagators and berry fruit growers
alike.

Government inputs and involvement
Regulation
There are no specific Acts or regulations covering the production of berry fruit, though
quarantine requirements apply to imports and exports, with exports also covered by the
Commonwealth Export Control Act 1982.

Research, development and extension
The blackcurrant and strawberry industries contribute to a local and national levy
respectively on production. This levy is used to fund research development and extension.
Raspberry and blueberry growers who are members of their national association also
contribute to national research, development and extension programs. DPIWE also
contributes to these programs, including the introduction and assessment of new genetic
material, promotion of sustainable production methods and developing partnerships with
Australian/International berry fruit industry representatives.

Industry value
The production of strawberries, raspberries and blueberries for the fresh market is very
labour intensive. It is estimated that one full-time equivalent is required to operate a
2.5 hectare enterprise. A large number of temporary employees are required to pick, grade
and pack the crop. This requirement approximates one further full-time equivalent per
hectare of crop. Blackcurrants are mechanically harvested and their production requires far
less on-farm employment than other berries. One full-time equivalent is required to operate
a 20 hectare enterprise. There are large multiplier effects on employment during processing
of blackcurrants and these are reflected in the value-added component of the final product.

               Raspberry                    Blackcurrant        Strawberry        Blueberry
             tonnes     ha                 tonnes        ha   tonnes      ha   tonnes      ha
92/93           135      42                     470      92        73     15       28     n/a
93/94           147      57                     547    135         85     22       44     n/a
94/95           137      46                     633    137       154      25      n/a     n/a
95/96           112      48                     665    163       135      19      n/a     n/a
96/97           105      44                     928    151       129      20       42      13
01/02           150      45                     400      80      250      32       65      17
Source: DPIWE survey of growers.

Several tonnes of blackberries and hybrid berries (including loganberries and boysenberries)
are also produced.




Department of Primary Industries, Water and Environment                                  Page 64
Berry fruit industry




Berry Industry Value
                                              92/93       96/97    97/98    98/99    99/00    00/01    01/02
Production
- Area covered (ha)                             c.150       228                                           174
- Number of operators
- Direct employment (no.)
- Product quantity (tonnes)                        703     1,204                                          865
- Product gross value ($m)                          c.2               2.6      2.9      3.2      4.3      4.5
Processing and distribution
(wholesale)
- Number of operators (no.)
- Stock/product value ($m)
- Direct employment (no.)
Market destination – local (%)
Market destination – mainland (%)
Market destination – overseas
export (%)
Value of exports (mainland &
overseas)
Source: DPIWE survey of growers; ABS agricultural commodity data; DPIF 1993.


Opportunities
The are a number of major opportunities for the berry industry.
   Realising the potential for export of strawberries and other berry fruit to Japan through
   the development of cost effective production strategies.
   Increase the production of berry fruit to capitalise on an increased consumer demand
   created by an increasing awareness of their health benefits, particularly for blueberries.
   Develop and better utilise tourism infrastructure, including the combination of niche
   value-adding with tourism.
   Production of quality fresh berry fruit timed to coincide with periods of high prices.
   Identifying and growing the most productive and highest quality varieties.

Government is assisting in achieving these objectives in a number of ways.
   Establishing links made through trade delegations to broaden the opportunities for fruit
   export.
   Assisting with obtaining the best genetic material through introduction, selection and
   assessment.
   Providing investors with accurate information on the potential returns from berry fruit
   production.
   Assisting industry to adopt best practices for sustainable production.

Challenges
    Difficulty in obtaining seasonal labour for harvesting.
    Achieving greater degree of coordination for the production of sufficient volumes of
    uniform, high quality fruit to allow viable consignments to specific markets.
    Developing coordinated, reliable and efficient transportation linkages to major mainland
    and overseas markets.




Department of Primary Industries, Water and Environment                                                 Page 65
Berry fruit industry




Further information
Michele Buntain
Horticulturist
DPIWE
13 St Johns Ave
New Town, Tasmania, 7008
Ph: 03 6233 6814 Fax: 03 6228 5936
Email: michele.buntain@dpiwe.tas.gov.au

Beth Luckhurst                                            Arnold Wright
Tasmanian Berry Growers Association                       Tasmanian Blackcurrant Growers Association
Moss Side Berries                                         ‘Valleyfield’
Frankford Highway                                         Glen Huon, Tasmania, 7109
Frankford, Tasmania, 7275                                 Ph: 6266 6225
Ph: 6396 1175                                             Fax: 6266 6425
Mob: 0418 569 823                                         Email: aaw@iprimus.com.au
Email: bluckhurst@yahoo.com
Richard Badcock
Cascade Beverage Company
GPO Box 1493
Hobart, Tasmania, 7001
Ph: 6221 8300 Fax: 6233 6984
Email: richard.badcock@fostersgroup.com




Department of Primary Industries, Water and Environment                                       Page 66
Hops industry




HOPS
Introduction
Hops are a climbing perennial plant indigenous to Europe, Asia and North America. The
plants’ native distribution is in the latitude range from 35–70 N, making Tasmania an ideal
climate provided adequate irrigation water and fertile, deep, river-valley soils are available.
On mainland Australia, hops are only produced in Ovens Valley in north-east Victoria.
Tasmania produces around 80% of Australia’s hops.

Hop production originated in the Derwent Valley in the 1840’s, and Bushy Park continues to
be Australia’s largest hop production area. In the 1970s the Henry Jones IXL Company
contracted hop production in this area and marketed the produce under the title of
Australian Hop Marketers. In 1974 Henry Jones IXL was acquired by Elders and renamed
Elders IXL. This acquisition included Australian Hop Marketers. In 1988 the Elders IXL hop
interests were acquired by the international company John I. Haas, which thus gained
ownership and management of Australian Hop Marketers’ interests in Tasmania and
Victoria. Growers no longer send hops to a pool but grow to forward contracts.

Production now extends to non-traditional hop areas in the north-east and north-west of
Tasmania. The original developments in the north-east occurred in the early 1970s; the
Forester River Farms is now the largest of these. This company was partly acquired by
Castlemaine Perkins Brewing Company and later by Australian Hop Marketers. Gunns Plains
in the north-west of Tasmania was developed by Australian Hop Marketers from 1980.

Since 1990 the whole of the Bushy Park area of hops has been replanted with virus-free
material.

Hops are dormant as a crown below the soil surface during the winter. During this part of
the year major farm operations include framework maintenance, fertilizer application, and
putting in strings between the ground and the framework. In late spring hop vines are
trained around the string base and will very quickly grow up to the framework. Flowering
occurs in early summer. Hop cones are harvested in late March. Vines are slashed at the
base before being taken to a mechanical picking machine that picks the cones. Cones are
dried, pressed into bales, and usually pelletised for easier handling and shipment.

Tasmania is free of two major foliar diseases (downy mildew and powdery mildew) which
are major impediments to the hop industry in the Northern Hemisphere. This has allowed
consistent high quality to be achieved.

Australian Hop Marketers is accredited under ISO 9002 (2000 version).

Industry structure
Production sector
Australian Hop Marketers owns and controls three hop farms in Tasmania and one in
Victoria, totalling 750 hectares (a clear majority of the total Australian area). The company
dominates the production of hops in Tasmania with farms at Bushy Park in the south, Gunns
Plains in the north-west and Forester River in the north-east.

In addition to Australian Hop Marketers’ three farms, there are presently seven privately
owned hop farms in Tasmania, all near Scottsdale. In 1988 there were 14 enterprises in
Tasmania. There has been a significant decline in the number of farms during the past three
decades.

Processing sector
Hops can be sold in the bale, as pellets or as an extract. To convert from baled hops to
pellets costs about 35 cents/kg and to convert to an extract costs a further $1.80/kg.




Department of Primary Industries, Water and Environment                                  Page 67
Hops industry




There are two main processing plants in Tasmania. The Australian Hop Marketers plant at
Bushy Park processes all production from southern Tasmania and Gunns Plains to pellets.
The other major plant at Scottsdale is operated by the Scottsdale Hop Growers Cooperative.
Australian Hop Marketers is a shareholder in this plant with other private growers. The
Scottsdale Hop Growers Cooperative normally processes the majority of the crop grown in
the north-east. Hops can be moved between the regions for processing if blending from
different areas is considered necessary.

Increasing quantities of hops are subjected to extraction. Liquid carbon dioxide extraction is
becoming the more favoured process (over hexane extraction) and in 1998 accounted for
about 400 tonnes of the total crop. In Australia the only carbon dioxide extraction is at the
Carlton United Brewery plant in Victoria and uses both Tasmanian and Victorian pellets.
Extraction of Australian hops also occurs in
Germany and the USA.

All growers harvest and dry hops on the farm.
This operation reduces moisture content from
75–78% to 8–10% and involves a cost of 70
cents/kg of baled hop.

Transport of dried hops to pellet plants is often
scheduled to supply a regular throughput at the
plant. Bales of dried hops are held in cool
storage. The deterioration of alpha acid content
is 20% in 12 months. Without cool storage the
deterioration can be as high as 50%.

The pelletisation process reduces the bulk by
50%. The pellets are placed in vacuum packs,
which ensures longer life for the product. The
deterioration of alpha acids in vacuum packs is
5% in 12 months, a considerable improvement
on the storage performance of baled hops.
Extract production further concentrates the
product, in turn reducing transport costs. Extract
can concentrate alpha acids five or more times,
with corresponding reductions in transport costs
as well as the added advantage of increased
product stability.
                                                          Harvesting hops. Source: TasPhoto Services

Markets
The hop crop in Tasmania is sold in the proportions of 12% domestic market and 88%
export. Trading on either market is on an individual basis between the seller, such as
Australian Hop Marketers, and a brewery. Marketing is based on selling by forward contracts
(up to five years ahead), which accounts for 80% of the crop. The balance (20%) is based
on spot sales.

Tasmanian hops are sold to a number of major breweries in Europe, Asia and North
America. Several trends are noticeable, which may be acting to reduce demand.
   In the developed world (including Australia, Western Europe and the USA) beer drinking
   is either static or declining.
   Beers with less bitter taste are becoming more popular. This means less hops are
   required as they are the bitter taste component.
   Brewers can maintain bitter taste from a smaller tonnage of higher alpha acid hops.
   With a number of new hop products available, brewers are now able to achieve more
   efficient utilisation of the hops.




Department of Primary Industries, Water and Environment                                      Page 68
Hops industry




Nevertheless, there are some good reasons for Tasmania being acknowledged as a source
of premium hops and thus maintains a relatively secure place in the market.

Hop production in Tasmania is sustainable without the wide-scale use of pesticides practised
in Europe and the USA. The Environmental Protection Agency in the USA has put pressure
on the European hop industry to produce pesticide-free crops. Tasmania does not have the
hop aphid or hop downy mildew or powdery mildew and so does not have to spray with
insecticides or fungicides, and only occasionally needs to use miticides. The hops produced
in Tasmania are therefore identified as a source of clean material for the USA.

There has been a development of aroma (aromatic) hop production in Tasmania as an
alternative to alpha acid hops. The price of aroma
hops is more than double that of alpha acid hops,
but yields are much lower. Their main advantage
therefore lies in broadening the market base by
meeting the growing demand for these hops.

Australian production is ‘off season’ to Northern
Hemisphere production, which is a constant
marketing advantage. An additional selling
advantage is that Tasmanian hops have lower
nitrate levels than other hops, which can cause
problems in beer production.

In the 2002/03 season, Australian Hop Marketers
has trained only 50% of plantings due to lack of
demand in the world market.
                                                          Hop harvesting. Source: TasPhoto Services
Infrastructure
Australian Hop Marketers is the dominant industry organisation in all aspects of the hop
industry in Tasmania: production, processing, research and marketing. The industry is
therefore largely regulated and managed by this company.

A second but much smaller company, HOPUNION Australia Pty Ltd, buys hops on contracts
from independent growers. It is also joint owner of a property in the north-east of
Tasmania. Other overseas hop merchants make purchases from time to time.

The Scottsdale Hop Growers Cooperative is predominantly a processing organisation that
involves private growers in the north-east and includes Australian Hop Marketers as
stakeholders. There is an active Hop Producers Association of Tasmania.

Hop production requires extensive machinery and infrastructure, including the hop
framework trellise, picking machines, drying kilns, pelletization plants and coolstores.
Transport is by road and sea.

Government inputs and involvement
Regulation
There are no specific Acts or regulations covering the production of hops, though quarantine
requirements apply to imports and exports, with exports also covered be the
Commonwealth Export Control Act 1982.

Research, development and extension
The two major areas of Government input are disease control and quarantine. In disease
control the reduction of the use of pesticides and control of virus problems are the main
issues.



Department of Primary Industries, Water and Environment                                     Page 69
Hops industry




DPIWE with other agencies, including the Tasmanian Institute of Agricultural Research,
CSIRO, Australian Hop Marketers and the Horticultural Research and Development
Corporation (now Horticulture Australia) have worked on several problems.
   Aroma hops have been introduced and evaluated, and viruses eliminated.
   The spread and effect of viruses on hop fields has been investigated.
   An ELISA testing facility, capable of identifying hop viruses and viroids, has been
   established at the DPIWE New Town Research Laboratories.
   Miticide use has been reduced by evaluation and use of integrated pest management.

The Australian Quarantine and Inspection Service (AQIS) is also involved with the industry.
   Introduction of new hop cultivars has been through the quarantine screening systems
   for all potential pests and diseases.
   AQIS deals with ‘certification’ of export hops to purchasers in the European Union and
   other markets.

Industry value
                                              91/92       96/97   97/98    98/99   99/00    00/01    01/02
Production
- Area covered (ha)                                                 813              539      545       670
-Number of operators                                                                                      8
- Direct employment (no.)
- Product quantity (tonnes)                                        1,250            1,495    1,489    1,225
- Product ‘farm gate’ value ($m)                  15.5                                7.6      7.5      6.3
Processing and distribution
(wholesale)
- Number of operators (no.)
- Stock/product value ($m)                                          c.15
- Direct employment (no.)
Market destination – local (%)
Market destination – mainland (%)
Market destination – overseas                                                                            88
export (%)
Value of exports (mainland &
overseas)
Source: ABS 2002; Australian Hop Marketers pers. comm.; DPIWE 1999.


Opportunities
    Further development of integrated pest management.
    Continued quality assurance and quarantine certification services to assist in export
    market development, especially to Europe.
    Introduction of new cultivars.
    Continued development of production increases with viral freedom in growing areas such
    as the Bushy Park Estates.

Challenges
    Maintaining freedom from exotic diseases.
    Accomodating variability and other changes in the gobal market.




Department of Primary Industries, Water and Environment                                               Page 70
Hops industry




Further information
Horticulture Branch
Food, Agriculture and Fisheries Division, DPIWE
GPO Box 44
Hobart, Tasmania, 7001
Ph: 03 6266 4305 Fax: 03 6266 4518
Email: HorticultureEnquiries@dpiwe.tas.gov.au

Australian Hop Growers Association                        Michael Dudgeon
30 Burnett St                                             General Manager
North Hobart, Tasmania, 7000                              Australian Hop Marketers
Ph: 03 6236 3654                                          313 Macquarie St
                                                          Hobart, Tasmania, 7000
                                                          Ph: 03 6220 8800
Scottsdale Hop Growers Co-operative                       HOPUNION Australia Pty Ltd
152 Tonganah Rd                                           PO Box 22
Scottsdale, Tasmania, 7261                                South Hobart, Tasmania, 7004
Ph: 03 6352 2055                                          Ph: 03 6223 2950 Fax: 03 6223 8733
Horticulture Australia
Level 1, 50 Carrington Street
Sydney, New South Wales, 2000
Ph: 02 8295 2300 Fax: 02 8295 2399
E-mail: info@horticulture.com.au
Web: www.horticulture.com.au




Department of Primary Industries, Water and Environment                                        Page 71
Nursery industry




NURSERY
Introduction
The nursery and floriculture industries are often collectively referred to as the ornamental
industry. But they have very different structures and requirements and are best dealt with
as separate industries. The floriculture sector covers establishments specialising in
production of cut flowers and flower bulbs, whereas the nursery sector comprises culture
and sale of all sorts of plants and gardening products.

The nursery industry is well established in Tasmania, but despite growth in turnover, prices
have barely risen in the last ten years (allowing for inflation). The industry faces increasing
competition from other recreational spending, partly as a consequence of more leisure time
and wider recreational options for consumers but also as a result of the impact of the
significant advertising budgets of sporting codes, gambling outlets and the tourism industry.

A majority of the products are sold within the State, with a small amount sent interstate
and overseas. Forest seedling suppliers are finding an increasing demand from interstate for
cold-hardy eucalypt seedlings, although there has been a decline in demand for general
commercial forestry seedlings. There is increasing demand for certified grape-vine
production for the wine industry.

With basic skills and modest capital investment it is relatively easy to establish a nursery.
However, to meet the ever-increasing expectations of consumers, growers will need to
introduce more product innovation. In addition, given increasing accreditation requirements
and costs of inputs, including labour and water, means that operators will need greater
production efficiency. This will raise costs and the level of growing skills required.

There is an established National Program of Nursery and Garden Centre accreditation. The
projects are run in every state with funding from Horticulture Australia and levies from pot
sales. Wholesale Nurseries are able to join the national accreditation program and under
guidance from the Nursery Industry Accreditation Scheme Australia (NIASA) gain full
accreditation to aid in nursery best practice and gain market advantages.

Garden Centres also have a national accreditation scheme which aims to introduce best
practice within those businesses.

The significance of the nursery and cut flower industries to the Tasmanian economy was
highlighted through Australian Bureau of Statistics survey results of 1993/94. The survey
established that 261 nursery and cut flower establishments in Tasmania had total sales in
excess of $57 million in 1993/94. Employment in these industries was 832 persons for the
survey period, with corresponding wages of $9.4 million.

Industry structure
Production sector
Wholesale nurseries supply retail outlets (garden centres and chain stores). Nursery stock
resellers also operate interstate and intrastate. There are around 150 nurseries in Tasmania
and over 60 garden centres or chain store outlets. Many mixed businesses also stock
seedlings and a small range of pot plants. Most nurseries in Tasmania operate on a
combined wholesale and retail basis. There are about eight large wholesale nurseries and
some of these companies have leased retail outlets. There is increasing interest from
nurseries in the accreditation program with four fully accredited wholesale nurseries and
another four undertaking the accreditation process.

The 1996/97 ABS figures gave the production area of nurseries as 142 hectares. It is
important to note that the ABS has never accurately surveyed the nursery and floriculture
industries, due to the large numbers of small production units that have incomes below the
ABS threshold figure. Generally, most nurseries are about 0.4 hectares in size and sell a



Department of Primary Industries, Water and Environment                                 Page 72
Nursery industry




diverse range of plants; very few specialise in a particular plant line. One of the larger
nurseries is 7 hectares.

The total Australian garden market (including wholesale and retail) grew to $5 billion during
2001. There has been some movement in the different categories of products sold with
major growth in areas such as garden maintenance. One of the most significant shrinkage
areas was in the sales of commercial forestry trees produced and sold due to changes in tax
rules regarding plantations.

Products sold by the industry include seedlings (punnets, bulk vegetable, and trees), bulbs,
potted and bare-rooted plants
and trees. Dry goods such as
pots, potting mix, pesticide
sprays and fertilizer are also
supplied. There is also
increasing emphasis in the
industry on lifestyle shopping
experience. Many garden
centres are providing outdoor
furniture, ornaments and whole
garden themes and plans as
well as having on site-cafes.

Horticultural qualifications such
as Nursery Trade Certificates,
Horticulture Certificates and
Horticulture Associate Diplomas
are becoming more common
amongst those employed in the                             Wayne Avenue Nursery. Source: TasPhoto Services
industry.

Processing sector
The processing sector in Tasmania is limited to the production of a variety of quality
potting mixes such as seedling and terracotta pot mix. There is also provision of
landscaping materials such as graded and typed gravels, bark and loams, instant lawns
for a range of purposes, and irrigation supplies.

Markets
Nursery products are principally sold locally, with 5% being sent interstate and 1%
overseas.

Lately, the chain stores (supermarkets and hardware stores) have developed their garden
sections and compete directly with nurseries. Because of their buying power they sell many
lines at lower prices. Competition also occurs between wholesale nurseries and interstate
nurseries, mostly from Victoria, in supplying retail outlets. A wide range of plant stock is
brought in from interstate including advanced trees, tube stock and potted plants. The
smaller garden centres are now selling the total garden experience, as they are unable to
compete with the bulk buying ability of the national retail stores. Instead the are selling
total garden themes, pot and plant packs, cafe and gift lines, and design and planting
services.

A Horticultural Research and Development Corporation (HRDC) survey of the Australian
nursery industry in 1993 indicated that the average value of the nursery retail sale was $11
to $20, with the ‘local gardener’ being the biggest consumer. ABS household expenditure
data for 1993/94 indicated that average spending on gardening was $5.01 a week.




Department of Primary Industries, Water and Environment                                               Page 73
Nursery industry




Horticulture Australia produced a report in 2002 from a survey of the trends in the
garden industry. The changes in the different categories within the industry can be seen
in the overall national value of the industry of over $5 billion dollars. The industry is split
into categories and includes greenlife, allied garden, cafe and gifts, services and bulk.
The greenlife category was most severely affected by the drop in demand for commercial
forest seedlings. The main growth area was in cafe and gifts, which grew by 44% to
$1.4 billion, and the services and bulk gardening category which grew to $1.7 billion. The
growth area of services and bulk supplies are due to landscaping and garden design
businesses becoming more valued by consumers.

Locally produced plants have been sold to the UK, New Zealand, South Africa, Japan and
the USA. Export sales totalled about $18,000 in 1994 (ABS data).

Infrastructure
The Nursery and Garden Industry Association of Tasmania (NGIT) is affiliated with the
Nursery and Garden Industry Association of Australia. The NGIT has members representing
most of the nursery production in the State, and represents members’ interests in
negotiations with Government and commercial interests and promotes industry
development.

The industry pays levies to Horticulture Australia, collecting the levy from pot sales to
producers. Funds are used for research and development projects and for promotion and
consumer surveys via Horticulture Australia.

The NGIT is committed to establishing in Tasmania the Nursery Industry Accreditation
Scheme, Australia (NIASA), based on product quality and industry best practice.

Transport problems are similar to those in other horticulture industries. Freight and multiple
handling of plants result in added costs. Generally, mechanical handling of nursery stock is
difficult due to the variation in size of pots, trays and plant material. Standardised pot plant
trolleys (or ‘Danish trolleys’) are becoming more commonly used within the industry, easing
handling problems. Peak production periods (e.g. spring) add to the marketing and
transport problems.

Government inputs and involvement
Regulation
The Australian Quarantine and Inspection Service enforces regulations on the movement of
plant material at both the domestic and international level.

Research, development and extension
Combined industry/Government initiatives include the Nursery Industry Accreditation
Scheme. This scheme promotes nursery best practice and quality assurance techniques to
improve nursery businesses. An Australian Garden Centre Accreditation scheme has also
been developed.

DPIWE also provides support through a plant pest and disease diagnostic service. In
addition, DPIWE was instrumental in the development of a nursery export network group in
Tasmania.




Department of Primary Industries, Water and Environment                                    Page 74
Nursery industry




Industry value
The ABS conducts a survey of nursery activity at irregular intervals, and there are limited
industry surveys.

                                              91/92       95/96    97/98   98/99    99/00   00/01    01/02
Production
- Area covered (ha)                                                  142
- Number of plant nurseries                                  43      114                              c.150
- Direct employment (no.)
- Product quantity (tonnes)
- Product ‘farm gate’ value ($m)                  11.5       9.7      14     16.2             15.4
Processing and distribution
(wholesale)
- Number of operators (no.)
- Stock/product value ($)
- Direct employment (no.)
Market destination – local (%)                                        94                                 94
Market destination – mainland (%)                                      5                                  5
Market destination – overseas                                          1                                  1
export (%)
Value of exports (mainland &
overseas)
Source: ABS agricultural commodity data; Industry surveys; DPIF 1993.


Opportunities
    Promotion and adoption of the Nursery Industry Accreditation Scheme Australia.
    Improved coordination of nurseries to further develop export markets.
    Advisory and information services to ensure quality products.
    Maintaining quarantine support to ensure continued market development.
    The commercialisation of Tasmanian native flora.

Challenges
    Maintaining high quarantine standards to ensure consistent high quality products.
    Adjusting business structures to respond to changing consumer demands.

Further information
Angela Monks
Horticulturist
Grove Research Station
DPIWE
99 Pages Road
Grove, Tasmania, 7109
Ph: 03 6266 4305 Fax: 03 6266 4518
Email: angela.monks@dpiwe.tas.gov.au

Hilary Haugstetter                                           Nursery & Garden Industry of Australia
Secretary                                                    PO Box 907
Nursery & Garden Industry of Tasmania                        Epping, New South Wales, 1710
PO Box 171                                                   Ph: 02 9876 5200 Fax: 02 9876 6360
Longford, Tasmania, 7301                                     Web: www.ngia.com.au
Ph: 03 6391 2057 Fax: 03 6391 2057
Email: hilary@longnet.com.au
Horticulture Australia
Level 1, 50 Carrington Street
Sydney, New South Wales, 2000
Ph: 02 8295 2300 Fax: 02 8295 2399
Email: info@horticulture.com.au
Web: www.horticulture.com.au



Department of Primary Industries, Water and Environment                                               Page 75
Floriculture industry




FLORICULTURE
Introduction
As noted in the Nursery profile, the floriculture industry is often seen as part of the
‘ornamentals’ industry. However, floriculture, which involves production for the cut flower
market, is distinct and is therefore treated separately.

Floriculture in Tasmania is a diverse industry with many types of flowers being grown. The
main flower crops can be placed into the following groups:
    flowering bulbs, corms and rhizomes – tulips, Dutch iris, lilies, freesias, daffodils and
    nerines;
    ‘traditional’ lines – carnations, chrysanthemums and roses;
    Australian natives and proteaceous plants;
    ‘fillers’ – including gypsophila and statice; and
    dried flowers and cut foliage.

Significant commercial flower production
started in the late 1970s. The industry
expanded considerably in the 1980s and
continues to grow. The flower bulb sector
has shown the greatest growth increases
over the past few years. This sector has
developed rapidly and is now worth an
estimated $3–4 million. There are now
new opportunities developing for the
export of bulb flowers to Asian markets,
and flower bulbs to Europe and Japan.

With basic skills and modest capital
investment it is relatively easy to
establish a cut flower enterprise.
                                              Proteas growing near South Arm for the cut flower market
However, as with the nursery industry,
good business management and
marketing skills are needed to realise a worthwhile return to investment. Many markets for
popular flower types in Australia are over-supplied and this has caused the financial failure
of some producers who proved unable to effectively to manage quality and cost control.

Prospects for the opening of new markets for all flower products, both in Australia and
overseas, are promising although markets are highly competitive and the Australian flower
industry lacks effective marketing promotion. The industry in Tasmania is maturing, with a
few enterprises now of sufficient size to market product overseas. The local and domestic
market remains the largest outlet for product and only a small percentage reaches export
markets. Future expansion will be highly dependent on a continued emphasis on premium
quality Tasmanian product and the ability to produce at competitive prices.

Industry structure
Production sector
There are presently over 200 individual flower growing enterprises in Tasmania. These
include around 45 full-time commercial operations, the rest being smaller part-time
operations. The total area planted to floriculture around the State is about 98 hectares.
However, some 80% of the total area of flowers in Tasmania is being grown by about 10%
of the producers. These figures underline the fact that there are many small producers in
the Tasmanian floriculture industry.

While part-time growers have small investment and production output per operation,
collectively they contribute significant product to the local market. Many are newly




Department of Primary Industries, Water and Environment                                   Page 76
Floriculture industry




established and have plans for expansion in the future. Other part-time operations are
diversified units of larger farming enterprises, or operate to supplement other income.

Whilst the total area under production is small compared to an industry like processing
vegetables, capital investment per unit area is quite substantial because many flowers are
grown under cover in either greenhouse or polyhouse structures which have heating and
irrigation systems. These structures are necessary for out of season or year round
production, to accommodate niche markets and to ensure competitiveness. Completed costs
for greenhouses range from $15 per square metre for a basic polytunnel without heating, to
$100 per square metre or more for multi-span roof-vented structures with automated
heating, ventilation and irrigation. Input costs for plant material, fertilisers, pesticides,
labour and so on are also relatively high.

The majority of enterprises specialise in
two or three different types of flowers.
Only a few larger operations successfully
grow six or seven types and consistently
maintain high quality product. The growing
of bulbs for sale through nursery outlets,
mail-order catalogues, wholesale and as
potted plants is also considered to be part
of the industry. The flower bulb sector
accounts for approximately 47% of the
total floricultural industry in Tasmania.

Processing sector
Processing and production are closely
interrelated, as picking, processing and         Tulip farm at Table Cape. Source: TasPhoto Services
packaging are all handled on-farm.
Processing is labour intensive and vitally important for product quality. It includes post-
harvest treatments, cooling, grading, bunching and packaging. Product is then transported
directly to florists, wholesalers or consumers.

There are significant differences within the industry in terms of presentation, in relation to
aspects such as stem size, bunch size and acceptable quality. To some extent this has been
due to attempts to gain access to niche markets and tailoring the product for those
markets. Niche marketing has been important for relatively small producers who often
receive good prices for their product.

There has been some standardisation in packaging and recommended post-harvest
guidelines have been released through the Tasmanian Flower Industry Association. The
Association also supplies standardised cartons to growers.

Markets
For Tasmanian markets, a large proportion of growers supply directly to florists and
consumers. The rest is distributed via State wholesalers. At present around 38% of total
production is sold onto the local market and about 60% into interstate markets, while 2% is
exported.

Produce sent interstate goes to wholesale flower markets in Sydney, Melbourne, Brisbane,
Adelaide and Perth. Flemington Market in Sydney is the largest of these and the majority of
produce is sent there before being distributed to florists and consumers. Recent
redevelopment of the Melbourne markets is likely to result in more product from Tasmania
being sold in Melbourne. Many growers supply interstate florists direct and bypass the
wholesale markets.




Department of Primary Industries, Water and Environment                                    Page 77
Floriculture industry




Competition comes mainly from Victoria, which has similar climatic areas to Tasmania.
Limited competition for some flower types also comes from other states and overseas.
Prices fluctuate greatly during the year. Peak periods such as Valentine’s Day, Mother’s Day,
Easter and Christmas see rises in prices and many growers aim for bulk production for these
specific dates.

An advantage for Tasmania is the ability, in some areas and with some types of flowers, to
extend production and sell flowers when mainland seasons have finished. There is
opportunity for continued expansion of local and interstate markets but to date only limited
effort and resources have been allocated to marketing promotions by the industry. Cut
flowers are a luxury or gift purchase and compete with the significant advertising budgets of
confectionery and alcohol manufacturers, amongst others. There are successful small-scale
exports of Tasmanian flowers and bulbs into Asia, Europe and America and these are likely
to expand in the future. New Zealand stands as a major competitor for export markets for
many flower lines.

Infrastructure
A State grower organisation, the Flower Industry Association, Tasmania (FIAT), was formed
in 1982. It has developed strong ties with various government organisations (particularly
DPIWE and the Department of Economic Development) and is affiliated with the Flower
Industry Association of Australia. It is a representative body for the industry as a whole in
Tasmania.

Recent attempts to introduce a national levy for research and promotion have been
hampered by industry disagreements, particularly in New South Wales. Importation of bulbs
and other ornamental species from overseas is subject to post-entry quarantine
requirements administered by the Australian Quarantine and Inspection Service.

Importation of some cut flowers from interstate is also subject to quarantine requirements,
particularly for western flower thrip.

Tasmanian producers are inhibited by the high freight costs and difficult logistics of landing
flowers on the mainland, so often find it difficult to remain competitive with mainland
producers. The problem can be alleviated in part by the maintenance of a quality product
that is always in demand and commands consistently higher prices, and by producing out of
season in relation to other states.

The recent changes in the structure of the airline systems combined with the purchase of
the new ferries has seen some flower growers begin to modify their freighting methods.
Enterprises that produce large volumes are moving towards using the ferry freight services,
while small volume producers often use airfreight.

Government inputs and involvement
Regulation
There are no specific Acts or regulations covering this industry, though quarantine
requirements apply to imports and exports, with exports also covered be the
Commonwealth Export Control Act 1982.

Research, development and extension
DPIWE has supported the development of the industry by retaining one full-time extension
and development officer since 1986. This commitment has been supported by analytical and
laboratory services. Workshops and seminars are regularly conducted in association with
the Flower Industry Association Tasmania.

DPIWE activities include the production of industry articles in Agriculture Tasmania,
demonstration trials of new native cut flowers, promotion of export development, and



Department of Primary Industries, Water and Environment                                 Page 78
Floriculture industry




advisory services in all aspects of floriculture including pest and disease diagnosis, and
cultural advice.

Industry value
                                              91/92       93/94    97/98   98/99   99/00   00/01   01/02
Production
- Area covered (ha)                                                                                    98
- Number of operators                                                                               c.200
- Direct employment (no.)
- Product quantity
- Product ‘farm gate’ value ($m)                   8.2       7.7                                    c.7–8
Processing and distribution
(wholesale)
- Number of operators (no.)
- Stock/product value ($)
- Direct employment (no.)
Market destination – local (%)                                                                         38
Market destination – mainland (%)                                                                      60
Market destination – overseas                                                                           2
export (%)
Value of exports (mainland &
overseas)
Source: ABS; internal DPIWE data; DPIF 1993.


Opportunities
    Continued development of exports of Tasmanian high quality flowers and bulbs into
    overseas markets, with special emphasis on the disease free status compared with other
    Australian States.
    Continued support for the expansion
    and development of the flower bulb
    sector of the industry.
    Encouraging and supporting the
    formation of a bulb certification scheme,
    particularly for bulb exports.
    Promoting opportunities for the
    development of native flora for the
    domestic and export markets.
    Identification of market niches that can
    be supplied taking advantage of
    Tasmania’s climate.
    Increase the networking ability of the
    industry and to work with key grower
    groups to increase their market access.
    Increase the industry’s access to skill     Flower bulbs account for nearly half the Tasmanian
    based training schemes.                                    floriculture industry


Challenges
    With some popular flower types over-supplied in the Australian market, ensuring the
    quality and quantity of products will be important to maintain market share and the
    development of export opportunities.
    Increasing national coordination in the industry to maximise the effectiveness of
    marketing promotion in export markets.
    Ensuring the availability of skilled labour during harvesting. Processing is labour
    intensive and vital for product quality.




Department of Primary Industries, Water and Environment                                             Page 79
Floriculture industry




Further information
Angela Monks
Horticulturist
Grove Research Station, DPIWE
99 Pages Road
Grove, Tasmania, 7109
Ph: 03 6266 4305 Fax: 03 6266 4518
Email: angela.monks@dpiwe.tas.gov.au

Colin Fleming
Secretary
Flower Industry Association, Tasmania
PO Box 193
Launceston, Tasmania, 7250
Ph: 03 6398 2474




Department of Primary Industries, Water and Environment   Page 80
Emerging and other fruit and floriculture crops industry




EMERGING AND OTHER FRUIT AND FLORICULTURE CROPS
Introduction
The potential to establish new commercial crops in Tasmania is supported by many
features.

    Tasmania’s reputation, in many specialised Asian and other markets, for clean high
    quality food products, including beef, scalefish and shellfish, dairy produce, alcoholic
    beverages and some fruit, vegetable and crop varieties.
    New crop products from Tasmania can therefore be marketed cooperatively with existing
    exports.
    Collaboration between the DPIWE, the Tasmanian Institute of Agricultural Research,
    other Government agencies and the commercial sector has been successful in this area
    and can be further expanded to commercialise new opportunities (as has occurred
    already in the wine, floriculture and bulb industries, with Japanese apple varieties, etc.).
    Access to some Asian markets is being improved by the recognition of the unique
    advantages of Tasmania’s relatively disease free status.
    Developments in the transport industry and in post-harvest handling are improving air
    and surface freight access to Pacific Rim countries.
    New Zealand is expending considerable effort in researching and developing new
    opportunities and, although directly competitive in some areas, is collaborating with
    Tasmania in some of its developmental activities.

In some crops, such as walnuts and olives, there are relatively well established domestic
markets as well as straightforward export opportunities (such as walnuts to Germany). But
in many other cases the work is still experimental, and some investigations – not
surprisingly – have produced disappointing results. The factors noted above give cause for
continued assessment of opportunities, though in future more work is likely to be directed
to commercialisation of native Tasmanian plants that are already gaining some acceptance
in culinary markets.

Olives
Olive growing in Tasmanian is still a young industry with the first significant plantings
occurring in the mid 1990s. Currently there are more than 85,000 trees planted in the State
on over 60 properties with grove size ranging from 100 to 10,000 trees. The majority are in
the 3–5 year age group and producing their first or second oil crop. Olive groves are located
all around the State for the production of both olive oil and table olives with the majority of
growers interested in oil production, particularly premium quality oil for both the domestic
and international markets.

Harvesting occurs from mid May through June depending on variety and location. The top
seven varieties grown in Tasmania at present are Manzanillo, Paragon, Barnea, Mission,
Corregiola, Hardy’s Mammoth and SA verdale. There are numbers of other varieties planted
in smaller numbers around the State and these trees mature, it will give an indication of the
performance of varieties in various microclimates throughout the State.

It is generally recognised that most growers in Tasmania are focusing on producing
premium quality oils and are looking to benchmark themselves with Australian and
international premium oils. Linkages are maintained into quality assessment work being
done on a national basis including projects such as the National Olive Variety Assessment
Project.

The rush of plantings that occurred during the last few years has slowed, with fewer new
groves but continuing expansion of existing groves. However, like in any new industry,
other potential growers are waiting to assess industry development and oil production and
quality before committing to planting. There are a small number of groves in the State with
older trees that have been successfully producing oil and table olives for a number of years.




Department of Primary Industries, Water and Environment                                  Page 81
Emerging and other fruit and floriculture crops industry




There are currently three small processing plants in the State with plans for others currently
under way.

Australian Bureau of Statistics estimates that Australia imports more than $115 million of
olive products each year with the majority coming from the Mediterranean. The domestic
industry supplies approximately 1% of Australia’s needs but aims to increase this figure
over the coming years as the industry all around Australia matures. It is estimated that
there is 1.3 million trees planted throughout Australian with a further 1.7 million on order.

Tasmania fills only a very small proportion of the total Australian production, and with a
longer growing season and reduced yield aims rather to produce premium quality oils from
the cool climate region. This is being realised with Tasmanian extra virgin olive oils winning
gold medals in Australian shows.

There are two industry associations in Tasmania. The Olive Producers of Tasmanian (OPTI)
and Tasmanian Olive Industry Association (TOIA) and both are affiliated with the national
grower group, The Australian Olive Association.

Green Tea
Annual world tea production has been estimated at one million tons, 30% of which is green
tea. The main green tea producing countries are China, the former USSR and Japan, with
China having the largest area of tea under cultivation. In Japan, the land available for tea
production is shrinking steadily due to urbanisation, and land costs are at a premium. In
addition, the average age of farmers is increasing due to decreased interest by younger
generations.

Japan currently supplies the niche market for high quality traditionally produced tea. The
largest tea producing area in Japan is in the Shizuoka prefecture, where climatic conditions
are similar to those experienced at many locations throughout Tasmania. Green tea has
been associated with the decreased incidence of certain diseases, including bowel and liver
cancer, and diabetes. In Australia, there is increasing interest in alternative beverages and
the medicinal benefits these may impart.

In 1991, DPIWE began an investigation into the potential for establishment of a green tea
industry for Tasmania. In conjunction with the Rural Industries Research and Development
Corporation, DPIWE commenced trial work aimed at evaluating the commercial potential for
this crop in Tasmania in 1993. Ongoing research and evaluation has four main aims:
    to evaluate the potential of a number of different sites for green tea production;
    to establish agronomic details of green tea;
    to determine the quality of green tea produced in Tasmania; and
    to establish value–adding opportunities.

The crop is a perennial and is not regarded as mature until it has been established in the
ground for five years, so evaluation is a long process. But it has been established that in
several sites originally chosen there was excessive frost damage, and some new sites have
been set up in their place.

The first harvest was carried out in early November 1995, and there have been three
harvests a year since then. The harvested tea has been processed in the mini plant installed
at the DPIWE New Town Laboratories. The processed green tea has been sent for
assessment by a Japanese tea processor, the National Research Institute of Vegetables,
Ornamentals and Tea (Japan) and researchers from the Shizuoka Tea Experiment Station
(Japan). The samples have been rated as very good and above expectation. Feedback on
varietal differences and processing technology is assisting further agronomic refinements
and quality improvement of the harvested crop.

There is a growing demand for green tea, both in Asia and elsewhere. But it is a high profile
product that can be marketed successfully only if it achieves a very high quality. Tasmania



Department of Primary Industries, Water and Environment                                 Page 82
Emerging and other fruit and floriculture crops industry




has advantages in terms of its clean environment, and its ability to provide fresh product in
the Japanese off season. Further work will continue to develop the relevant agronomic
expertise, but will also need to focus on post-harvest issues, specifically the development of
new processing techniques and improved marketing.

Ginseng
Ginseng is one of the most popular ingredients in traditional East Asian medicines, and has
also become popular in the western herbal and health supplement trades. The best
traditional sites have tended to be in relatively mountainous and cool parts of North and
East Asia, such as the Korean mountains.

Its value and provenance have made ginseng the focus of keen interest in Tasmania. It
remains at the moment a small-scale cottage industry, with a high labour input. For this
reason, and also because of the security required for growing the crop, production and
market data is often unavailable or unreliable. It is considered a product that has potential
to succeed in the international market even as a small cottage industry, and it is well suited
to small localised production in an organic agriculture environment.

Ginseng is sold in the market place as a whole dried root. Value-adding would be most likely
in the form of finished herbal and medicinal products, which are likely be formulated on the
mainland.

The crop can require a minimum of 5 years of growth prior to harvest and 10 year old roots
are popular in some markets. Ginseng has been grown in Tasmania for about five years,
and is therefore still in the developmental stage. There is continued monitoring and
agronomic input by Government research officers.

It is likely that a degree of cooperation will need to develop between growers if the product
is to be marketed successfully, and a local growers association would be useful. There is
already an Australian Ginseng Growers Association.

Saffron
Saffron is an extremely high value product, particularly treasured in Asia and the Middle
East, and used as both a dye and spice. It is derived from the flowering corm, Crocus
sativus. It is an unprocessed product requiring large amounts of manual labour input. The
plant itself is less than 30cm tall at flowering and requires the gatherer to individually pick
each flower as it opens. The flowers are spread out to dry and be sorted, and require
frequent turning. The stigma (which is the actual saffron) is then pulled out of the dry
flower refuse by hand with forceps.

The major problem with saffron production is the high cost of labour for production. Saffron
has traditionally been grown in areas of depressed economic conditions, such as Turkey,
India and Kashmir, where labour is in cheap and plentiful supply. At present, however, the
main commercial producer is Spain.

There are some difficulties in growing the plant itself, but these are minor compared with
the labour intensive nature of saffron production. Nonetheless, at least one grower has now
marketed their first commercial crop, and there is considered to be some potential for a
product that can be recognised as organic, unadulterated and of the highest quality.

Nuts
Until recently, the nut industry in Tasmania was small and relatively static. It was largely a
by-product of the long-established planting of European nut trees (especially chestnuts and
hazelnuts), including some planted originally as hedgerows. The harvest was not dependent
on great agronomic care, but it had a ready market in the Cadburys chocolate factory at
Claremont, in Hobart.




Department of Primary Industries, Water and Environment                                   Page 83
Emerging and other fruit and floriculture crops industry




In the past few years a new and much more organised industry has arisen around walnuts.
This is based on recognition that Tasmania appears very well suited for walnuts, which have
indeed been grown for well over a century on a small-scale; and secondly, that the State
could meet some of the huge demand in Europe, and especially Germany, for year-round
walnuts. There is also a significant import replacement opportunity.

The industry is organised by one company, Webster Walnuts Tasmania. Webster have a
walnut research facility, a carefully positioned plan for marketing walnuts to the world, and
an ability to arrange contracts with landowners/investors. As the horticultural aspects of
walnut production have been subjected to disciplined research treatment, many of the key
grower risks of perennial horticulture are reduced in these enterprises.

The grower contracts include the sale or lease of trees to landholders, professional
horticultural advice and a provision for the supply of nuts to Webster’s marketing area.
Webster encourage their growers to have flexibility in capital arrangements to promote
establishment of walnut growing businesses of a horticulturally sustainable size and
structure. The planned approach to the market should allow Webster to realise the above
normal profits associated with careful market positioning and research based competitive
advantages. In the long-term growers and investors in orchards would be expected to
realise normal profits.

There are around 300 hectares of trees in the ground, with 30-50 growers involved. It takes
ten years for the trees to develop fully, but the work already done means that Tasmania will
have the first mature, fully integrated and industrialised walnut production sector in the
Southern Hemisphere.

Webster intend to concentrate at first on import replacement, but by the time the orchards
are in full production the State will be able to take advantage of the European off-season.
The crop is unproven, but if expectations are realised this will be a multimillion dollar
industry within a decade.

Similarly structured enterprises could be possible for hazelnuts and chestnuts in Tasmania
as the climate is horticulturally suited to their production. The next step in evaluation of this
possibility would be careful assessment of the long-term world markets for these nuts with
a view to taking a profitable position in this market.

Industry structure
Production sector
Tasmania’s climactic and natural advantages have given the opportunity for the numbers of
agricultural enterprises to investigate a range of fruit and floriculture crops. Careful research
into production processes has allowed several crops – olives, walnuts and saffron in
particular – to show significant potential. Developing and refining systems that are efficient
will be an on going issue for these industries.

Processing sector
Most of the new and emerging fruit and floriculture crops will require at least reasonable
level of processing to allow the full development of mainland and overseas markets.
Companies such as Webster are well placed to ensure maximum gains from their walnut
crops due to a carefully planned industry development strategy. Other companies with
similarly planned strategies should also see strong growth in their industry.

Markets
While there is some local demand for these specialist products, the greatest potential
markets are overseas. Tasmania has a range of natural advantages that both aid production
(e.g. fewer pests and diseases) as well as enhancing marketability. DPIWE and the
Department of Economic Development are supporting the local industries in a number of



Department of Primary Industries, Water and Environment                                   Page 84
Emerging and other fruit and floriculture crops industry




ways, including through establishing links through trade delegations to broaden export
opportunities.

Infrastructure
Grower’s associations can provide an important role during the development of an industry.
Such collaboration can assist in improving production techniques, in product development,
and in market development. The Tasmanian olive industry has formed two groups, while
Webster provides strong coordination of the walnut industry.

DPIWE has provided industry development and extension services, and continues to provide
support in collaboration with producers and industry groups.

Government inputs and involvement
Regulation
There are no specific Acts or regulations covering these industries, though quarantine
requirements apply to imports and exports, with exports also covered be the
Commonwealth Export Control Act 1982.

Research, development and extension
DPIWE provides support to new industries whenever possible. Strong links to TIAR in
particular means that a full range of research, development and extension services are
available. The four DPIWE research stations also provide a board range of agricultural
conditions under which to trial and develop production techniques. The Department of
Economic Development also provide assistance, especially in the areas of production and
market development.

Industry value
These industries are generally only just beginning to get out of the developmental phase
and into significant commercial production. Promising returns have already been realised for
olives and saffron, and it is expected that Webster’s walnut production will be a major
industry within a few years.

Opportunities
    Tasmania’s reputation for high quality produce will enable strong development of export
    markets.
    Awareness of ‘clean, green’ production systems means that systems are generally
    already in place to allow ecolabelling accreditation programs to be implemented.
    Other new plant industry opportunities are also being investigated in both the vegetable
    and the pasture, cereal and field crops areas.

Challenges
The potential for development of new commercial horticultural opportunities is significant.
However, the development process–visits to the countries of origin, relocation of plant
material and technology to Tasmania, and the associated applied research - is expensive
and time consuming, requiring a large initial input of resources before commercial prospects
can be demonstrated.

The ability to research and develop future opportunities will tend to be limited by the
availability of externally funded research grants and the limited success of initial
investigations into some Asian crop opportunities. On the other hand, an area of particular
interest is the development of unique native plant products.




Department of Primary Industries, Water and Environment                                  Page 85
Emerging and other fruit and floriculture crops industry




Further information
Horticulture Branch
Grove Research Station, DPIWE
99 Pages Road
Grove, Tasmania, 7109
Ph: 03 6266 4305 Fax: 03 6266 4518
Email: HorticultureEnquires@dpiwe.tas.gov.au

Tasmanian Farmers and graziers Association                 Brian Hinson
PO Box 193                                                 Secretary
Launceston, Tasmania, 7250                                 Olive Producers of Tasmania
Ph: 03 6331 6377 Fax: 03 6331 4344                         PO Box 117
Web: www.tfga.com.au                                       Brighton, Tasmania, 7030
                                                           Ph: 03 6268 1101 Fax: 03 6268 1101
                                                           Email: bhinson@tasmanian-olives.com
Derek Flectcher                                            Chuck L’Heureux
President                                                  Secretariat
Tasmanian Olive Industry Association                       Australian Olive Association
Ph: 03 6492 1460                                           PO Box 309
Email: dgflectcher@bigpond.com                             Pendle Hill, New South Wales, 2145
Web: www.tasoliveind.com                                   Ph: 02 9863 8735 Fax: 02 9639 4971
                                                           Email: secretariat@australianolives.com.au
                                                           Web: www.australianolives.com.au
Australian Ginseng Growers Association                     Leigh Titmus
PO Box 250                                                 Walnuts Manager
Gembrook, Victoria, 3783                                   Websters
Ph: 03 5968 1877 Fax: 03 5968 1119                         Ph: 03 6428 3555 Fax: 03 6428 3550
Email: info@ginsengaustralia.org                           Email: walnuts@websterltd.com.au
Web: www.ginsengaustralia.org                              Web: www.websterltd.com.au
Tas-Saff (Tasmanian saffron)
PO Box 156
Cygnet, Tasmania, 7112
Ph: 03 6295 1921 Fax: 03 6295 1102
Email: TAS-SAFF@bigpond.com
Web:
  members.ozemail.com.au/~tassiesaffron




Department of Primary Industries, Water and Environment                                         Page 86
Pasture, cereal and field crop sectors




PASTURE, CEREAL AND FIELD CROP SECTORS
Summary

The pasture, cereal and seed crop sector contributed between $100 and $110 million to the
Tasmanian economy in 2001/02. This value reduced to approximately $80 million in
2002/03, mainly as a result of a reduction in the value of both the poppy and pyrethrum
industries.

The sector is dominated by the poppy industry, which accounts for over 60% of the total
value of all industries in the sector. Cereals and pyrethrum each account for approximately
10% of the sector.

Summary of value of pasture, cereal and field crop industries ($m)
                                              91/92       97/98    98/99    99/00    00/01    01/02    02/03
Production value (farm gate)
- Cereal                                           8.9      13.1     11.2      9.5     12.2
- Poppies                                           10               c.30     c.55     c.60       75       65
- Pyrethrum (extractive)                           c.2                                          c.15
- Essential oils (extractive)                      2.3                                           2.0
- Pasture, legume and cereal seed                  1.8       4.2                        6.0      5.0
crops
- Emerging and other field crops                   0.1                                                     c.1
Total                                              25                                          c.105     c.80
Source: see individual industry tables.




Department of Primary Industries, Water and Environment                                                 Page 87
Cereals industry




CEREALS
Introduction
Cereal cropping has always been a part of Tasmanian agriculture since the first settlers
arrived. In the early days of the colony, Tasmania was the major wheat producer in
Australia, with around 32,000 hectares of wheat, nearly half of the total wheat production at
that time. The main area of production was around Cambridge, Richmond and the
Tasmanian Peninsula, referred to at that time as the ‘cereal bowl’, with the wheat shipped
back to Sydney. In the period from 1910 to 1979, production increased dramatically with
around 100,000 hectares of cereal sown each year. Tasmanian Grain Elevators Board
(TGEB) was formed in 1955 at the request of the grains industry. The primary role of TGEB
is to act as a storage and handling facility for the Australian Wheat Board. TGEB also is a
grain import and distribution centre for buyers and sellers of cereal and grain legumes.
TGEB was privatised in 1989, and is currently a Government Business Enterprise, although
it is currently being offered by the Government for purchase, with tenders called and
settlement expected before the end 2003.

Oats and barley occupy the majority of the area that is sown to cereal crops in Tasmania.
The main processing grain is barley, particularly the variety Franklin, which was developed
by DPIWE for malting. Cascade Breweries and J Boags & Son use malting barley for the
production of beer. Barley grain is also used to feed dairy cows. Oat grain is used for stock
feed during the winter months when pasture growth is slow. The oat crops can be grazed,
cut for hay and/or harvested for grain. Wheat and triticale are both cultivated on a relatively
small-scale. There has been an increase in wheat production in recent years, but Tasmania
is not as suitable as the mainland wheat growing areas for large-scale production, and the
great majority of the wheat used in Tasmania is imported from the mainland. Compared to
mainland Australia, Tasmanian cereal production is quite small. Due to the increased
demand for cereal grain, much of Tasmania’s feed grain has to be imported.

The area sown to cereals declined for about 40 years, but during the past five years it has
been steady. Wheat has shown the greatest improvement in the past ten years, with the
area sown and production increasing quite dramatically. Yields have varied due to the
climatic extremes of each season, but total grain production has been stable except in the
drought of 1994–95.

Cereals are not grown as a major enterprise in any region of Tasmania, but most of the
area sown is in the drier or medium rainfall areas of the north Midlands. Recently cereals
have become part of the rotation in areas such as the Derwent Valley, the Fingal Valley and
the north-west coast. Cereals are frequently used in rotation with higher value crops or as
part of a pasture renovation phase. The majority of cereal crops are autumn/winter sown,
with some crops sown in spring/summer due to waterlogging. Raised beds are also used for
cereal and cash cropping in areas of poor drainage.

Cereal crops are a minor component of many mixed farming enterprises, so specific
employment details are not readily available. Apart from on-farm labour, Tasmanian cereal
crops contribute to downstream employment in the areas of:
   contract work to grow, protect, harvest and transport the crop;
   machinery sales and maintenance;
   cartage of grain to end-users and the TGEB;
   malting and brewing (barley is the main raw material);
   sales of malting and brewing products;
   grain milling and distribution of stockfeed; and
   seed cleaning and sales.

The main quality assurance program for the cereal industry is set by the National
Agricultural Commodities Marketing Association. Guidelines cover the production,
harvesting, storage, marketing, transportation and the required grain characteristics.




Department of Primary Industries, Water and Environment                                  Page 88
Cereals industry




Industry structure
Production sector
In Tasmania, there are around 200 cereal growers registered in TOPCROP and Southern
Farming Systems groups, with both groups also being supported by the Grains Research
and Development Corporation. The TOPCROP program is a farmer-focussed information
network that provides the means for the transfer of new technology and innovation amongst
grain grower groups, while Southern Farming Systems is a farmer-driven research and
development organisation. However there are many other cereal growers around the State,
particularly in the vegetable and dairy industry,
so the exact number is unclear. Yields per
hectare for TOPCROP and Southern Farming
Systems members on average are usually twice
that of the State average.

Contractors have a major role in the cereal
industry, with up to 135 employed indirectly.
Depending on grower’s needs, they provide
sowing, spraying, harvesting and even
transportation of the harvested product.

Barley dominates the total production figure for
cereal crops. It is the second largest broad acre
crop in terms of area, with the largest being        Grain trial at the Forthside Research Station
poppies. In the 1999/00 season, poor seasonal
conditions caused lower than average yields, with
a 27% fall in production to 22,000 tonnes. However in the 2000/01 season, production
increased to 26,000 tonnes, largely helped by good seasonal conditions.

There has been continuing strong demand for the State’s barley, mainly in response to the
extra demand for high quality barley from malting companies and the dairy industry.

Yields for all cereals except oats are at least two tonnes per hectare, with wheat having the
highest yield per hectare in most years. In ten years, wheat production has risen by 87% to
25,000 tonnes, largely due to the increased demand for feed grain.

Cereal cropping in Tasmania is largely dependent on seasonal conditions, which can vary
from drought to non-stop summer rains.

Tasmanian cereal area and yield
                91/92          96/97          97/98          98/99          99/00          00/01
              ha    t/ha     ha    t/ha     ha    t/ha     ha    t/ha     ha    t/ha     ha    t/ha
            (‘000)         (‘000)         (‘000)         (‘000)         (‘000)         (‘000)
Barley         11.3    2.8    14.5    2.4    13.1    2.4    11.1    2.8      9     2.4      10    2.6
Oats            9.1    2.0     8.1    1.7     7.9    2.0     7.9    1.8      6     1.6       8      2
Triticale         1    3.3     2.2    3.4     1.9    3.0     2.4    3.6      2     2.9     n/a    n/a
Wheat           1.2    2.8     1.9    4.0     2.8    3.8     4.0    3.9      6     3.1       7    3.2
Total         22.6           26.7           25.7           25.4             23             25

Processing sector
Barley is malted for further use in beer and other food products. Tasmanian Breweries
(Cascade Breweries) use 5,000 to 6,000 tonnes of barley each year and have storage for up
to 15,000 tonnes.

Two other major companies process cereals, including largely imported product.
   Pivot Nutrition Ltd mills wheat for bakeries and makes a range of stockfeed; it also
   makes a range of aquaculture feeds.
   Ingham Enterprises Pty Ltd formulates its own poultry feeds.




Department of Primary Industries, Water and Environment                                       Page 89
Cereals industry




Markets
Although there have been occasional exports of malted barley, the majority of processed
grain is used within the State. Raw barley grain is used by malting companies, piggeries,
feedlots and for other stockfeed. Stockfeed mills and livestock producers use oats, wheat
and triticale.

There is some competition from interstate suppliers in relation to feed grains. Due to
economies of scale and the lower price received by mainland growers, grain can be shipped
to Tasmania and still be competitive in price with the Tasmanian crop.

Last season, approximately 80,000 tonnes of grain was imported from the mainland. The
local markets require up to 160,000 tonnes of grain each year, with this figure continually
growing due to an increase in livestock prices. Milling requires 25,000 tonnes with the
reminder used for feed or feed product.

Approximately 3,000 tonnes of seed is needed each year. Part of this is saved on-farm,
while the remainder is bought by seed merchants, then cleaned and re-sold. In recent years
there has been a small export market for Tasmanian seed of local barley and oat varieties.

Prices received by Tasmanian cereal growers are very sensitive to supply and demand
within the State, and to competition from interstate. These prices can fluctuate widely,
especially for feed grains.

Cereal Production and Value
                                       91/92         96/97       97/98     98/99     99/00     00/01
Barley             ‘000 tonnes              31.8          35.2       31        30        22        26
Oats               ‘000 tonnes              18.5           14        15        14        10        15
Triticale          ‘000 tonnes                3.4          7.3       6.9       9.7       6.3       n/a
Wheat              ‘000 tonnes              3.25           7.5       12        18        20        25
Total              ‘000 tonnes                57           64      64.9      71.7      58.3        66

Gross Value        $ million                 8.9          11.5     13.1      11.2       9.5      12.2


Infrastructure
The current industry infrastructure is being improved to handle the expanding production of
malting-quality Franklin barley.

The Tasmanian Grain Elevators Board (TGEB) operates facilities at Bridgewater, Launceston,
and Devonport with a combined storage capacity of around 35,000 tonnes. They have also
built temporary bunker storage at Powrana adjacent to the feedlot, while expansion of
storage facilities at Devonport is also under review. The TGEB is currently a Government
Business Enterprise, however its sale is expected by the end of 2003. The aim of the sale is
to increase the ability of the business to expand and respond to local cereal production and
evolving market requirements.

The number of combine harvesters in the State is increasing to cope with additional areas of
cereal crops. A grain drier is available to overcome problems with late harvested, high
moisture grain. This is operated by a grower consortium in conjunction with the TGEB,
which has received malting barley for export and has operated in feed barley since 1992.
Many growers now have silos that can be aerated to prevent moisture damage. Some seed
cleaners also have seed drying facilities.

Unlike other Australian states, Tasmania has no statutory or cooperative marketing boards
to buy and sell grain, so each grower decides how best to sell the crop. Growers possessing
storage facilities have more flexibility with regard to markets and time of selling. The




Department of Primary Industries, Water and Environment                                          Page 90
Cereals industry




increased storage installed by TGEB will not
only store locally produced grain, but also
permit larger shipments of imported feed
grains.

Government inputs and involvement
Regulation
The importation of feed grain is covered by
three Acts and their accompanying
regulations.
    Seeds Act 1985 and Seeds Regulation
    1986.
    Weed Management Act 1999 and Weed
    Management Regulations 2000.
    Plant Quarantine Act 1997 and Plant
    Quarantine Regulations 1998.

The Seeds Act 1985 governs issues such as
the certification and registration of seed,
labelling, certificates of analysis and sale of
seed. The Weed Management Act 1999 and
the Plant Quarantine Act 1997 cover the
importation of grain and the possible
contamination with declared weeds. Declared
weeds are prohibited imports and need to be
destroyed.

Research, development and extension
The State Government funds research through the Tasmanian Institute of Agricultural
Research. DPIWE provides industry development and extension in variety improvement
(breeding and evaluation), seed production, crop management, disease control, drainage,
weed control, and crop rotations. Some projects are also funded by national research and
development corporations. Associated activities include:
   liaison with the Tasmanian Farmers and Graziers Association and agribusiness on
   industry matters;
   liaison with Cultivaust Pty Ltd, the DPIWE agent for Franklin barley seed production (in
   Australia and overseas);
   certification of Franklin, Bass and Targa seed crops grown in Tasmania;
   assistance to growers and the TGEB in determining quality criteria for Franklin barley
   suitable for export to interstate malting companies;
   involvement of growers in TOPCROP, a ‘best practice’ program sponsored by the Grains
   Research and Development Corporation;
   contract planting and harvesting of ‘special’ seed crops on a fee-for-service basis; and
   inspection of commercial crops for detection of contamination and disease problems.




Department of Primary Industries, Water and Environment                               Page 91
Cereals industry




Industry value
                                              91/92       96/97    97/98    98/99    99/00    00/01    01/02
Production
- Area covered (ha)                            22,600     26,690   25,700   25,400   23,000   25,000
- Total number of landowners*
       Barley                                      458
       Oats                                        414
       Wheat                                        68
       Triticale                                    68
       Cereal for hay                              138
       Cereal for grain                            422
- Direct employment (no.)
- Total product quantity (tonnes)              57,010     64,000   64,900   71,700   58,300   66,000
- Total grain value ($m)                          8.9       11.5     13.1     11.2      9.5     12.2
Processing and distribution
(wholesale) **
- Number of operators
- Product value ($m)                                                 3.09     1.68     3.16      3.8
- Direct employment (no.)                                              70       71       72       75
Market destination – local (%)                                         10       10       13        7
Market destination – mainland (%)                                      90       90       87       93
Market destination – overseas                                          90       90       87       93
export (%)
Value of exports (mainland &                                         11.8     10.8     13.5     21.1
overseas)
Note:
* Number of operators and direct/indirect employment is not known, as cereal crops have been
incorporated into a number of enterprises, from dairy to wool and vegetables to beef.
** The data in the processing and distribution sector is incomplete and does not reflect the value of
grains to the agricultural industry.
Source: ABS agricultural commodity data; DPIF 1993; DPIF 1996.


Opportunities
    To develop barley varieties that are superior to Franklin with regard to grain yield, grain
    size, and malting quality. This will allow farmers to improve their profitability because of
    higher yields and reliability.
    To promote the production of high quality Tasmanian grains to fill niche markets.
    To encourage farmers on the north-west coast to grow cereals in their rotations.
    Farmers often do not plant cereals because they compete for land with the high value
    vegetable crops which can be grown in the region, but cereals can offer other
    advantages such as their value as a break crop for disease and pest control.
    Continual improvement of agronomic management for cereals in Tasmania. This should
    improve the percentage of grain that is suitable for malting.
    The promotion of a clean, healthy image of Tasmanian products. The inclusion of cereals
    in crop rotations will be integral to the development of limited chemical input and
    organic farming.
    The testing and evaluation of new fungicides and plant growth regulators to help stop
    the effect of lodging in cereal crops.
    To promote the benefits of feed grain to livestock production. Due to good livestock
    prices, it is now worthwhile for producers to finish poorer livestock on grain, thus
    increasing the demand for feed grain in the State. There has also been a significant
    increase in the use of barley and wheat grain for supplementary feeding of dairy cows.
    To assist the industry in achieving increased production, therefore replacing imported
    feed grains.

Challenges
    Contaminated feed grain imported from mainland states. This has the potential to bring
    problems such herbicide resistant weeds and other serious weeds that could threaten
    the industry.




Department of Primary Industries, Water and Environment                                                 Page 92
Cereals industry




    Although there is increasing demand for feed grain and prices are currently good,
    Tasmanian growers have yet to produce a consistent supply of grain.
    Establishing cereals as a profitable crop in the rotation. There is competition with high
    value crops such as poppies for land space.
    Preventing increased incidence of fungal diseases affecting cereal crops.

Further information
Extensive Agriculture Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 46
Kings Meadows, Tasmania, 7249
Ph: 03 6336 5277 Fax: 03 6344 9814
Email: ExtensiveAgEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Susan Alexander
PO Box 193                                                TOPCROP Development Officer
Launceston, Tasmania, 7250                                Food, Agriculture and Fisheries Division,
Ph: 03 6331 6377 Fax: 03 6331 4344                        DPIWE
Web: www.tfga.com.au                                      GPO Box 44Hobart, Tasmania, 7001
                                                          Phone: 03 6233 6833 Fax: 03 6228 5123
                                                          Email: susan.alexander@dpiwe.tas.gov.au
                                                          Web: topcrop.grdc.com.au
Tasmanian Grain Elevators Board (TGEB)                    Tasmanian Institute of Agricultural Research
PO Box 71                                                 GPO Box 252-98
Brighton, Tasmania, 7030                                  Hobart, Tasmania, 7001
Ph 03 6263 3955 Fax. 03 6263 3957                         Ph: 03 6226 1804 Fax: 03 6226 7450
Email: tasgrain@vision.net.au                             Email: Gwen.Dumigan@utas.edu.au
Web: www.tasgrain.com.au                                  Web: www.tiar.tas.edu.au




Department of Primary Industries, Water and Environment                                         Page 93
Poppies industry




POPPIES
Introduction
The medicinal poppy industry has now been operating in Tasmania for over 30 years, and
the State produces approximately 50% of the world’s legal poppy crop. The industry size
has been fluctuating in the last three years with productivity increasing with the use of
superior cultivars, advances in production technology and selection of better growing areas.
There were record harvests achieved in the 2001/02 season creating a stockpile of raw
material. In late 2002 the world prices decreased, reducing the total expected value of the
industry to Tasmania from the current crop. The area planted to poppy production in
Tasmania for the 2002/03 season was about 17,500 hectares and involved 1,150 licenced
growers. The estimated farm gate value to growers was approximately $65 million. The
industry’s total value to the Tasmania economy is expected to be about $200 million.
Tasmania also produces poppy seed for culinary purposes. Poppies are grown under licences
issued by the Poppy Advisory and Control Board.

The poppy (Papaver somniferum) is unique, as it is the only plant capable of biologically
synthesising the alkaloid morphine. It also produces at least twenty other alkaloids of which
the most important are codeine and thebaine. These opiate alkaloids are the raw materials
used in the production of many analgesic preparations and related medicinal compounds.
There has been a swing in Tasmania for a greater proportion of the poppy crop to be grown
from high thebaine producing varieties.

Poppy is mechanically harvested as ‘straw’ (heads and a little of the stem). At maturity the
straw’s moisture content is 12%. Processing operations begin with the separation of opiate-
free seed from the straw; the seed is then cleaned, graded and bagged for export. Seed
from the high thebaine varieties is destroyed and not used for culinary purposes. The seed
of the normal poppy varieties is a valuable by-product and is sold for culinary and baking
purposes, as well as for stock feed.

Although trial and evaluation studies were conducted in Tasmania during the Second World
War and the 1960s, commercial large-scale production did not commence until the 1970/71
season when the British-based firm GlaxoSmithKline Australia began operations.

                                                          Another pharmaceutical firm, the American-
                                                          based Abbott Australia Pty Ltd, conducted
                                                          poppy feasibility trials in 1971/72. Its
                                                          processing plant was established at Westbury
                                                          in 1976, when Abbott Australia Pty Ltd formed
                                                          a consortium with Ciech Polfa, a Polish
                                                          company, and set up Tasmanian Alkaloids Pty
                                                          Ltd.

                                                          In 1979, the turbulent nature of the
                                                          international market in licit opiates became
                                                          obvious when political decisions in the USA
                                                          excluded Tasmanian opiates from that market.
                                                          As a result, Tasmanian Alkaloids Pty Ltd did
                                                          not contract for poppies at all during 1979/80
                                                          and GlaxoSmithKline Australia reduced its
   Tasmania is a major producer of the
       world’s legal poppy crop                           production to less than half the previous
                                                          season’s total.

In 1981, USA’s Drug Enforcement Administration determined by administrative rule that the
importation into the USA of licit opiates be restricted to seven countries, with 80% of the
market being reserved for India and Turkey (the 80/20 rule). These two countries also
compete for the remaining 20% market share along with Australia and France.




Department of Primary Industries, Water and Environment                                           Page 94
Poppies industry




In 1982, Extal Pty Ltd, a subsidiary of the international pharmaceutical products company
Johnson & Johnson, took over the alkaloids operations of Tasmanian Alkaloids Pty Ltd. As a
subsidiary of Johnson and Johnson, Tasmanian Alkaloids became Australia’s largest and
Tasmania’s only producer of active pharmaceutical ingredients. This was greeted with
enthusiasm by poppy growers who hoped that some of the marketing problems, which had
plagued the industry in the past, would be overcome.

This renewed confidence by the Tasmanian production sector was accompanied by gradual
increases in production efficiency and in crop acreage through the 1980s. Production in
other countries determines the price received by the Tasmanian poppy industry. Over
recent years many poppy growing countries have experienced difficult agricultural
conditions and their yields have fallen. In Tasmania, despite price drops in the 1985/86,
1986/87 and 1991/92 seasons, there has been a substantial increase in prices paid to
growers, approximately matching increased production costs. In addition, improvements in
yields, alkaloid content and management have ensured a steady increase in returns per
hectare.

Industry structure
Production sector
Total production statistics of straw and seed are not available due to confidentiality
requirements. In recent years, both yields and morphine content have continued to increase
due to improvements in cultivars, cultural practices, and particularly weed control, adoption
of raised beds and irrigation.

Production area had been steadily increasing until recent years, with declines in area for the
last couple of years. The decline has largely been offset by significant improvements in yield
rates. The prospects for continued increases in production are likely despite continuation of
the 80/20 rule restricting access to the American market and the current world oversupply.
Tasmania’s reliability of production and problems in other countries should continue to
provide some room for growth. Tasmania’s production of thebaine has been exempted from
the 80/20 Rule until the 31 January 2006.

The north-west region continues to produce approximately 50% of total State production,
with the northern and southern regions sharing the balance. The reduction in total area and
the widespread installation of centre pivots
in the midlands has allowed a greater
proportion of the crop to be grown on
irrigated land and on raised beds, improving
the reliability of the crop in some areas.

Processing sector
The Tasmanian operations of the two poppy
processing companies in Tasmania are quite
different. GlaxoSmithKline Australia Ltd,
based at Latrobe, undertakes basic
processing. This operation involves
separating the seed from the poppy straw,
cleaning, grading and bagging seed ready
for export, and producing poppy straw                     Trail crop of poppies being grown at the
pellets for transporting by sea to                               Forthside Research Station
GlaxoSmithKline Australia’s Port Fairy
factory in Victoria. At the Port Fairy factory, opiates are extracted and concentrates of
poppy straw and codeine phosphate are produced for the local and export markets.

The Westbury operation of Tasmanian Alkaloids Pty Ltd involves the processing of poppy
straw and the extraction of opiates on site. Codeine phosphate, thebaine and some thebaine




Department of Primary Industries, Water and Environment                                      Page 95
Poppies industry




derivatives are produced at Westbury. The seed is also cleaned, graded and bagged ready
for export.

Markets
The USA is the world’s largest consumer of opiate products. The USA wishes to continue to
receive at least 80% of its raw material from India and Turkey for strategic reasons. The
thebaine and oripavine Concentrate of Poppy Straw (CPS) is not currently considered within
the 80/20 rule and allows for some product expansion in the USA market.

It has been reported that Tasmanian production satisfies about 50% of licit world opiate
requirements. If GlaxoSmithKline Australia Ltd and Tasmanian Alkaloids Pty Ltd are
successful in their plans to raise production, Tasmania’s market share could rise still further
as the world’s major pharmaceutical converters seek to align themselves with reliable and
secure ongoing licit supply.

Tasmania also produces poppy seed, most of which is exported to overseas culinary
markets where it is recognised for its high quality. Approximately half of Tasmania’s
exported poppy seed goes to Europe and half to the USA. It is marketed under the name of
Australian Blue Poppy Seed. Seed from the high thebaine varieties is combined with crushed
coal and used as boiler fuel by Australian Paper, Burnie. Thebaine seed is never sold for
culinary uses.

Infrastructure
In Tasmania, poppies are grown under licences issued by the Poppy Advisory and Control
Board. Australian poppy production is restricted to Tasmania for security reasons, based on
an agreement at the Agricultural Ministers level. However, GlaxoSmithKline Australia
successfully sought approval to conduct experiments in northern Western Australia in field
poppy production. 1998/99 was the first season for this experimentation.

The Poppy Advisory and Control Board advises on all matters relating to cultivation,
production and transport of opium poppies and poppy material; collects and collates
statistical information and prepares reports; and liaises with appropriate Commonwealth
Departments in the matter of Australia’s obligations under the international drug
conventions. The administrative elements of the Board are located in Ulverstone on
Tasmania’s north-west coast.

The head office, administrative and clerical functions of GlaxoSmithKline Australia Ltd are
based at Boronia in Victoria, whilst the company’s horticultural research is undertaken from
the Latrobe factory. Research in field production and cultivar evaluation has continued since
the 1998/99 season in the Ord River district of Western Australia to assess suitability for an
Australian all seasons production program.

Tasmanian Alkaloids Pty Ltd undertakes all its processing, administration and horticultural
and chemical research and development at Westbury. In November of 1998 it undertook an
$18 million expansion program to better cope with subsequent production increases.

Government inputs and involvement
Regulation
Responsibility for control of the poppy industry is mandated by the 1961 Single Convention
on Narcotic Drugs (as amended by the 1972 Protocol), and is shared by the Commonwealth
and State Governments.

In respect to opiate manufacture, the Commonwealth Health Department is the ‘special
administration’ established in Australia under the 1961 Single Convention and has
responsibility for approving manufacturing quotas for the production of opiate alkaloids from
Tasmanian grown poppies. Responsibility at Government level for the security/law



Department of Primary Industries, Water and Environment                                  Page 96
Poppies industry




enforcement aspects of the poppy industry is jointly shared by State and Federal Police, the
Commonwealth Health Department and the Poppy Advisory and Control Board. The Poppy
Advisory and Control Board sits administratively within the Department of Justice. The State
control of narcotic substances is controlled under the Poisons Act 1971, with growers being
licensed under this Act and subject to security checks prior to gaining a crop contract.

Research, development and extension
DPIWE and the Tasmanian Institute of Agricultural Research are both involved in varying
capacities with research and development of the poppy crop, and liaise regularly with the
administrative, research and field staff of both companies.

Industry value
The poppy crop has a total value of around $200 million to the Tasmanian economy. Some
farmers are getting returns of up to $6,000 per hectare. Exceptional crops can yield over
$8,000 per hectare.

                                              92/93       97/98   98/99     99/00    00/01    01/02    02/03
Production
- Area covered (‘000 ha)                          5.8                c.15       22       22       20     17.5
- Number of growers                             c.600             c.1,000    1,257    1,250    1,200    1,150
- Direct employment (no.)                                                                        900      900
- Estimate of product quantity
(tonnes)
- Product ‘farm gate’ value ($m)                  c.10               c.30     c.55     c.60      75        65
Processing and distribution
(wholesale)
- Number of operators (no.)                           2                2
- Product value ($m)                                               c.175     c.220             c.175    c.200
- Direct employment (no.)                                                                        245      245
Market destination – local (%)
Market destination – mainland (%)                                                                 3         3
Market destination – overseas                                                                    97        97
export (%)
Value of exports (mainland &                                                                   c.175    c.150
overseas) ($m)
Source: DPIF 1993; DPIWE 1999; Poppy Advisory and Control Board pers. comm.


Opportunities
The poppy industry in Tasmania is now firmly established, with many farmers realising its
value both as a cash crop and as part of their cropping rotations.
    The industry has made significant progress in its relatively short history in Tasmania,
    however, there is still scope for improvements in cultural practices and plant breeding to
    achieve higher yields and higher thebaine and morphine levels.
    Continued research and development is essential to ensure that the poppy industry
    maintains it’s high standard of efficiency and productivity, thus promoting confidence in
    its ability to compete in world markets.
    The Tasmanian industry must always be looking for opportunities to introduce new
    value-added products to stay ahead of other countries.
    In recent years, most research and development in the poppy industry has been
    conducted by the two companies.
    DPIWE and the Tasmanian Institute of Agricultural Research have been involved with
    research into the benefits of irrigating poppies, disease and weed control, investigating
    non-traditional areas for poppy production and participating in demonstrations and
    workshops to further improve poppy yields and crop quality.
    Future involvement by DPIWE will most likely concentrate on disease and pest control
    and fine tuning the nutritional and irrigation requirements of the crop, both in traditional
    growing areas and new areas now being introduced to poppy production.
    Current Tasmanian standards in all aspects of poppy production are considered to be the
    best in the world.


Department of Primary Industries, Water and Environment                                                 Page 97
Poppies industry




    Current estimates are that world market demand will see expansion continue at the rate
    of at least 5% per annum for the next few years.
    Tasmania is assessed as having suitable land area to expand production up to three fold.
    Of some concern to Tasmanian producers is the low scale research being conducted in
    northern Western Australia by GlaxoSmithKline Australia.

Challenges
The major challenge for the Tasmanian industry is to continue to improve its production
efficiency, through improved cultural practices and increased alkaloid content of the
varieties grown. Increased availability of water will also be key in achieving the productivity
lift as the crop expands in the larger Midlands areas under centre pivot irrigation. The
Tasmanian Government under the Water Development Plan is addressing the issue of
increasing water availability.

The efficiency, reliability and level of production in other poppy producing countries will also
continue to challenge the Tasmanian industry. Also of concern is expanding production in
countries such as Afghanistan and Britain as farmers search for cash crop alternatives.
Production of 1,000ha has been reported in Britain for the 2002 year.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 6424 5142 Fax: 03 6421 7630
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Poppy Growers Association                       Tasmanian Alkaloids Pty Ltd
28 Garfield St                                            Birralee Rd
Launceston, Tasmania, 7250                                Westbury, Tasmania, 7303
Ph: 03 6343 2244 Fax: 03 6343 2822                        Ph: 03 6393 5202 Fax: 03 6393 1575
                                                          Web: www.tasalk.com.au
GlaxoSmithKline Australia                                 Poppy Advisory and Control Board
PO Box 168                                                PO Box 380
Boronia, Victoria, 3155                                   Ulverstone, Tasmania, 7315
Ph: 03 9721 6000 Fax: 03 9729 5319                        Ph: 03 6429 8782
Web: www.glaxowellcome.com.au                             Email: terry.stuart@justice.tas.gov.au
                                                          Web: www.justice.tas.gov.au/pacb




Department of Primary Industries, Water and Environment                                            Page 98
Pyrethrum (extractive) industry




PYRETHRUM (EXTRACTIVE)
Introduction
The pyrethrum industry covers the growing of pyrethrum daisies to enable pyrethrin oils to
be extracted. The extraction and refining process involves a number of steps, most of which
are undertaken in Tasmania before the refined product is exported – primarily to the USA.
Tasmanian pyrethrum products are used as the key ingredient in domestic and industrial
pest control formulations. An effective insecticide with very low toxicity to mammals is a key
feature of such products.

The pyrethrum industry is relatively new to Tasmania. During the early to mid-1980s
several companies were involved in this venture, but Commonwealth Industrial Gases (CIG)
Pyrethrum soon became established as the only significant corporate stakeholder, and
thereafter underpinned the industry. A management buyout of CIG’s pyrethurm interests
generated Botanical Resources Australia Pty Ltd (BRA) in 1996. BRA is now the major
company in this field. In the last few years, a second company, Australian Pyrethrum Farms
(APF) have also started developing pyrethrum crops.

The concentrated nature of its ownership means that most of the information on the
industry is considered to be commercial in confidence.

Tasmania is now the second largest producer in the world after East African countries such
as Kenya, supplying about 30% of the global pyrethrum market. The field production
system developed for pyrethrum in Tasmania is unique for its efficiency and productivity.
BRA’s crop production system is fully mechanised and farmers enter contracts to produce
the flowers for processing. APF are developing production systems based on their own land
holdings. Crops are grown mainly along the north-west coast, with a lesser area being
planted through to the northern Midlands area.

The industry has progressed beyond the
experimental and development phases. While
currently in a period of consolidation, there is
expectation of continued and sustained growth
in the short to medium-term.

Industry structure
Production sector
The production sector is currently dominated
by one company, BRA, who contract growers
to produce pyrethrum daisy crops. Most crops
are grown on mixed enterprise properties,
often in rotation with vegetable and poppy          Tasmania is the world’s second largest producer of
                                                                       pyrethrum
crops. Pyrethrum is a perennial crop and has a
cropping life of several years. Crops are
generally grown in the fertile soils of the north-west coast of Tasmania. BRA organise
planting and harvesting utilising specialised machinery. They also provide Industry
Development Officers to assist growers maximise efficiencies during the growing of the crop
and ensure that the latest research results are provided.

APF have recently starting developing crops, focussed on the northern Midlands.

Processing sector
BRA runs a crop reception and processing plant at Ulverstone, pelletising and processing the
pyrethrum daisy crops to produce pyrethrin oils for export. BRA provides a field officer
service and a harvesting service.




Department of Primary Industries, Water and Environment                                    Page 99
Pyrethrum (extractive) industry




APF have plans for the development of processing capability at their northern Midlands
property.

Markets
Virtually all the product produced at BRA’s Ulverstone plant is exported, with most going to
the USA, while around 15% is split between Germany, Holland, Spain, Italy, Hong Kong,
Singapore, Korea, Japan, India and New Zealand (BRA 2001).

Tasmania currently supplies around 30% of the world pyrethrum market, with east African
countries such as Kenya supplying the rest. In 1996, Tasmania was supplying 10–15% of
the world market.

Infrastructure
BRA’s head office is located in Hobart, where management and marketing activities take
place. The Pyrethrum Research and Development Committee provides funding and
determines priorities for agronomic research and development activities. The Committee
consists of growers and BRA staff.

Growers are represented by the Tasmanian Farmers and Graziers Association Pyrethrum
Committee.

Planting and harvesting of pyrethrum crops requires some specialised machinery to ensure
maximum efficiencies are achieved. While some processing can be readily undertaken, the
main Tasmanian company, BRA, has invested heavily in pelletising and processing capability
to maximise returns with down-stream processing.

Tasmania’s second pyrethrum producer, APF, is exploring investment options for processing
capability.

Government inputs and involvement
Regulation
While the industry is not directly regulated, Government has quarantine oversight
requirements to ensure that seed imported into Tasmania for product development meets
strict weed and disease standards.

Research, development and extension
Generally, the industry seeks ongoing
liaison with DPIWE, the Department of
Economic Development, other
Government agencies and the Tasmanian
Institute of Agricultural Research (TIAR).
Recent Government and TIAR
involvement includes research projects
on disease and irrigation monitoring
(funding support from industry) and with
grower support.

The funds for the BRA Pyrethrum
Research and Development Committee
                                             Pyrethrum daisies growing near Lower Barrington
are provided in part by growers who
contribute a 2.5% levy, and by BRA and
by other stakeholders such as chemical
companies. The Commonwealth Government, through Horticulture Australia Limited,
matches the funding provided by growers for the support of research, development and
marketing services.




Department of Primary Industries, Water and Environment                               Page 100
Pyrethrum (extractive) industry




Industry value
                                              91/92       94/95      98/99    99/00   00/01    01/02
Production
- Area covered (ha)                            c.1,500    c.1,000     1,500            2,000    2,300
- Number of landowners                           c.100       c.85                        220    c.220
- Direct employment (no.)*                       c.200      c.111
- Product quantity (tonnes)                    c.2,500    c.2,000                      6,400
- Product ‘farm gate’ value ($m)                    c.2        c.2                               c.15
Processing and distribution
(wholesale)
- Number of operators                                 1         1                          1
- Product value ($)
- Direct employment (no.)                                                                 34
Market destination – local (%)
Market destination – mainland (%)
Market destination – overseas                     most      most                          98     most
export (%)
Value of exports (mainland &
overseas)
Note: * includes seasonal casual labour
Sources: BRA 2001; BRA pers. comm. and press releases; DPIF 1993; 1996; DPIWE 1999; Mocatta
2002.


Opportunities
There are a number of areas that both BRA and APF are developing.
   Further development of existing product lines and processing capability to improve cost
   efficiencies.
   Development of additional pyrethrum products utilising current processing by-products
   (e.g. mosquito coils utilising the straw-like spent marc which is left over after
   extraction).
   Improving productions systems to both match supply to market demand, and to
   guarantee those supplies to assist in market development.
   Greater utilisation of processing capacity by processing of other crops.

Challenges
One of the primary areas for work in the pyrethrum industry is in market development,
especially in assisting developing the demand for natural pyrethrum products. BRA currently
are in a consolidation phase while overseas market demand has dropped a little. Before the
market decline, they had stated they were aiming to supply 40% of the existing global
demand (BRA 2001). Press releases in February 2003 indicated they would roughly halve
the planted area, thereby approximately halving the 2001/02 $15 million crop.

While most of the growing is through the north-west of Tasmania, areas in the northern
Midlands are also being developed, especially by APF as they start to establish themselves
as a pyrethrum producer. Continuing establishment of cropping areas together with
continual improvement of processing systems will continue to be a focus of development
work.




Department of Primary Industries, Water and Environment                                            Page 101
Pyrethrum (extractive) industry




Further information
Alasdair Wells
Food Agriculture and Fisheries Division, DPIWE
GPO Box 44
Hobart, Tasmania, 7001
Ph: 03 6233 6519 Fax: 03 6233 6249
Email: alasdair.wells@dpiwe.tas.gov.au

TFGA Pyrethrum Committee                                  BRA Head Office
PO Box 193                                                8 Gregory Street
Launceston, Tasmania, 7250                                Sandy Bay, Tasmania, 7005
Ph: 03 6332 1800                                          Ph: 03 6224 4511
Web: www.tfga.com.au                                      Web: www.botanicalra.com.au
APF Head Office
Symmons Plains
Perth, Tasmania, 7300
Ph: 03 6239 9083




Department of Primary Industries, Water and Environment                                 Page 102
Essential oils (extractive) industry




ESSENTIAL OILS (EXTRACTIVE)
Introduction
Essential oils are volatile oils extracted from plant material having the characteristic odour
of that plant. Quite a number are edible and used for flavouring or flavour enhancing and in
perfumery application. A good range are currently or have been produced in Tasmania
including peppermint, spearmint, parsley, boronia, blackcurrant, fennel, dill, mountain
pepper, lavender, clary sage and hops.

An essential oil industry in Tasmania has been established for some time with lavender
having been produced by the Denny family near Lilydale since the 1920s and hop
production existing for over 150 years. Peppermint was produced in small amounts in the
mid-1970s and then the industry underwent significant development in the early 1980s.

In 1980, The University of Tasmania and the Tasmanian Government presented
experimental essential oil products to the world at the International Congress for Essential
Oils held in Cannes. This led to market development and export contracts for the sale of
fennel, mint, parsley, boronia and blackcurrant essential oils.

Production expanded rapidly during the late 1980s and early 1990s before declining due to
a number of factors including the protracted sale of the business and various marketing
difficulties. The industry has stabilised after another change of ownership in 2000 and has
now commenced a steady growth program.

The Tasmanian industry was initially organised via Essential Oils of Tasmania Ltd (EOT) a
company set up by the Government and the University of Tasmania. Then, in 2000, Bronson
& Jacobs (B&J) which already owned the Bridestowe lavender estate, acquired EOT. B&J
produce tea tree oil and trade large amounts of essential oils, paramedicals, chemicals and
cosmetic products on the world market. During the past few years, there has been
consolidation of production with larger areas cropped to fewer farming enterprises. There
has been steady growth in some areas including boronia and there are more plantings
planned. There has been development of mountain pepper, a Tasmanian native (Tasmannia
lanceolata) and new market development for fennel. Peppermint and blackcurrant
production have expanded and there is potential for continued expansion. There are
opportunities to investigate new crops and to replace imports and increase exports.

While other areas in Australia produce various essential oils such as peppermint tea tree,
eucalypt and sandalwood oil, Tasmania arguably has the most diverse operation with a wide
range of crops grown. It has specific advantages with the production of temperate essential
oil crops due to the diurnal variations and climatic conditions resulting from its latitude and
island status, and is generally less exposed to disease pressures than many other
production areas.

An industry quality assurance program has been implemented to ensure quality and
reliability of supply to the market. It encompasses all areas including growing, extraction,
critical harvest times, high tech production, and consistent quality.

Industry structure
Production sector
Essential oil crops are normally integrated on farm with other enterprises, excluding
lavender, blackcurrant and boronia that are more often grown as sole farm enterprises.
Crops grown in Tasmania are solvent extracted or steam distilled.

Operations are distributed over the majority of Tasmania except the far north-west. The
Derwent Valley, Cressy area, Fingal valley and Ringarooma valley are traditionally the main
broadacre areas for field crops such as mint, parsley, fennel and dill which are steam
distilled. Boronia which is solvent extracted is grown on the north-east and east coast and in



Department of Primary Industries, Water and Environment                                Page 103
Essential oils (extractive) industry




the north through Bridport and Scottsdale, with some on Bruny Island. Blackcurrants are
grown in the Derwent Valley and Channel area, and are solvent extracted. Mountain pepper,
also solvent extracted, is still mainly gathered from wild stands. Work is currently under
way to establish a plantation in the south using selected clonal material, to ensure a
sustainable supply of uniform quality raw material to cater for the anticipated increase in
demand for this product.

Distribution of essential oil production areas (by area planted)
Region                                                1999     2003
North/north-west (Cressy/Longford, Macquarie            15%      31%
Settlement)
South (Huon/Channel, Coal Valley, Derwent Valley)       30%      32%
Fingal Valley (Conara to Fingal)                        10%      11%
North-east (Bridport to St Helens)                      45%      26%

Processing sector
There is one solvent extraction plant in Tasmania at Kingston, south of Hobart, which is
owned and operated by EOT. This unit is operating at approximately 50% of its capacity on
EOT products with another 30% of capacity on contract extraction. The products are
marketed in the form of steam-distilled oils, and solvent extracted concretes or absolutes.

Steam distillation occurs at regional facilities close to the crop areas with oils sent to EOT’s
premises at Kingston for quality control, blending, packaging and marketing.

Markets
Essential oils produced in Tasmania are sold on domestic and export markets and are used
directly in flavour and fragrance applications or formulated into new products for sale to
industry. Product is sold directly to buyers in Europe, Asia and America and through agents
in Europe and North America.

The European Union is debating legislation relating to the specification of ingredients in
products, whether natural or synthetic. If adopted, this legislation will strengthen the
position of essential oils in the flavour industry.

Price trends vary from product to product. Future prospects are for continued growth in the
sale of essential oils. Cosmetic World News (134/135) identified three trends that support
this:
1. the ongoing growth of processed food consumption;
2. growth in the consumption of natural and diet products as the general population
    becomes more health conscious; and
3. the development of prestige and premium product lines by the processed food industry.

Work is continually being undertaken to increase the market share of Tasmanian essential
oil products worldwide. This occurs through research, for example into antimicrobial and
insecticidal applications of oils, and also new markets. The market for Tasmanian anethole
from fennel oil contracted due to large stocks of cheap anethole becoming available from
China, requiring development of new markets. Asian and Japanese markets are being
developed for mountain pepper and its products. The demand for quality peppermint oil is
increasing due to the increasing popularity of mint flavours in Asia and the supplementation
of lower quality oils. Demand for blackcurrant extract has been escalating and changes in
quality requirements has led to research devoted to matching European quality. The market
for boronia oil is steadily increasing. Tasmania is a significant player on the world market for
parsley oil for which demand is also increasing.

Australia still imports many essential oils, with a value around $13 million per annum,
consisting mainly of citrus and mint oils. One of the objectives for the domestic market is
import replacement and this is now starting to occur.



Department of Primary Industries, Water and Environment                                   Page 104
Essential oils (extractive) industry




Infrastructure
The peak bodies representing the industry are Essential Oils of Tasmania (EOT) and The
Natural Plant Extracts Cooperative Society Ltd.

EOT provides the majority of infrastructure requirements. These include marketing,
cropping programs, overseeing of commercial issues, processing and transport coordination.
It operates the solvent extraction plant and has some involvement with the steam
extraction plants but these are all owned and operated by grower groups.

Natural Plant Extracts Cooperative is a representative grower organisation providing a
liaison between growers and EOT. All growers are members of the growers’ cooperative. It
funds and directs research being the parent body for the Essential Oils Research and
Development Committee. There is a voluntary industry levy of 3% of farm gate value.

Government inputs and involvement
Regulation
There is no specific Act or regulation covering this industry, although there are quarantine
requirements for imports and exports, with exports also covered by the Commonwealth
Export Control Act 1982. Harvesting of native species, especially on public or reserved land
is controlled under a number of Acts, and managed primarily by DPIWE and Forestry
Tasmania.

Research, development and extension
DPIWE and the Tasmanian Institute of Agricultural Research has been involved with the
industry over a number of years and has been a supporter of essential oils research
projects.

Industry value
The current world production of essential oils is approximately 45,000 tonnes. The essential
oil products currently grown in Tasmania include blackcurrant, boronia, fennel, mint, dill,
parsley, mountain pepper, lavender and some experimental crops. Presently, boronia
provides approximately 41%, mint 10%, fennel 17%, parsley 23% and blackcurrant and
other crops making up the remainder of production.

The currant estimate is that the industry is worth approximately $2 million per annum.

                                              91/92       96/97   97/98   98/99   99/00   00/01   01/02
Production
- Area covered (ha)                                                                                  300
- Number of landowners                                                                                30
- Direct employment (no.)
- Product quantity
- Product ‘farm gate’ value ($m)                   2.3                                                  2
Processing and distribution
(wholesale)
- Number of operators
- Product value ($)
- Direct employment (no.)
Market destination – local (%)                                                                    neglig.
Market destination – mainland (%)                                                                     20
Market destination – overseas                                                                         80
export (%)
Value of exports (mainland &
overseas)
Source: DPIF 1993; industry estimates.




Department of Primary Industries, Water and Environment                                           Page 105
Essential oils (extractive) industry




Opportunities
The essential oils industry is established in Tasmania. EOT has identified production targets,
which will increase export trade, provide import replacement and provide diversification for
the cropping sector.

Bronson and Jacobs, the owners of EOT, are committed to marketing and expanding the
essential oils industry. Development of new markets has occurred with boronia, parsley,
fennel and mountain pepper oils, and a rejuvenation program is continuing for the
peppermint industry to boost productivity on the farm for mint oil. The past two years has
seen a substantial increase in the planted area of blackcurrant.

The native mountain pepper (Tasmannia lanceolata) is being produced and has drawn a
good deal of overseas interest. Obtaining registration of the product is now being pursued
by EOT.

EOT continues to work closely with the Tasmanian Institute of Agricultural Research and the
University of Tasmania which provide services for analytical testing and quality control of
essential oils, as well as research programs.

Research areas include the value-adding
of products in Tasmania, and the
availability of new and improved varieties
to increase or maintain a quality product
and consistent reliability.

The industry is well monitored and efforts
are continually made to improve farming
efficiency while maintaining sustainable
practices. There is continual quality
monitoring and soil and crop residue
monitoring. Essential oil cropping takes
little away from the paddock with
approximately 15 tonnes of fresh product
yielding up to 60kg of oil depending on the               Lavender is a strong and established component
crop. Remaining plant material is used for                    of the Tasmanian essential oil industry
mulch or reincorporated into the soil. Most                          Source: TasPhoto Services
plantings are perennial except for dill.

A feature of essential oils is that it is a small volume product so there are advantages with
freight cost.

Challenges
EOT promotes crops that have specific production advantages in Tasmania resulting either
from the particular growing conditions that exist, or from any technical advantages that can
be developed, for example, specialised harvester equipment. Whenever possible, the
company aims to position products in higher value niche markets. However, normal market
pressures still prevail, including competition from countries where the demand on returns is
not as high, for example, competition from Eastern European sources is currently causing
difficulties with some products. EOT has embarked on a development program to allow
downstream processing and value-adding of oils. As an exporter, the value of the Australian
dollar is always significant.

The Tasmanian industry has a reputation as a reliable supplier of consistent quality
products, using sustainable production systems backed by strict quality assurance
procedures including ISO 9002 registration.

Expansion of cropping areas are sometimes dependent on resources e.g. peppermint
expansion is dependant on irrigation.


Department of Primary Industries, Water and Environment                                         Page 106
Essential oils (extractive) industry




Further information
Horticulture Branch
Food, Agriculture and Fisheries Division, DPIWE
99 Pages Road
Grove, Tasmania 7109
Phone: 03 6266 4305 Fax: 03 6266 4518
Email: HorticultureEnquiries@dpiwe.tas.gov.au

Essential Oils Tasmania                                   Chris Read
PO Box 162                                                Chairman
Kingston, Tasmania, 7050                                  The Natural Plant Extracts Cooperative
Ph: 03 6229 4222 Fax: 03 6229 2957                          Society Ltd
Email: eot@netspace.net.au                                21 Bay Rd
                                                          New Town, Tasmania, 7008
                                                          Ph/Fax: 03 6278 1601
                                                          Email: cd_read@tassie.net.au




Department of Primary Industries, Water and Environment                                        Page 107
Pasture, legume and cereal seed crops industry




PASTURE, LEGUME AND CEREAL SEED CROPS
Introduction
Seed of pasture grasses, legumes and cereals have been produced in Tasmania since the
earliest colonial days. However, seed production in an organised sense can be considered to
have commenced in the late 1950s and 1960s, the latter being the most significant due to
the formation of the Ryegrass Marketing Board. This Board was created by a small number
of farmers with assistance from the then Department of Agriculture. The objective was to
put in place a management and marketing
structure that would enhance the
development of a professional approach to
the production and sale of perennial ryegrass
seed produced in Tasmania. The Department
of Agriculture certified most of the perennial
ryegrass crops.

During the last forty years the industry has
continued to develop and in 2001/02 certified
seed of 27 herbage grass and legume,
specialist forage and cereal cultivars was
produced in Tasmania. Total production was
1,899 tonnes of certified seed. In a national
context the Tasmanian seed industry is small;
the quantity of certified seed being
                                                            Hay harvesting near Deloraine
approximately 10% of the total produced in
Australia. In an overall sense (certified plus
uncertified) the proportion would be considerably less because large quantities of uncertified
seed are produced interstate. In a Tasmanian sense the industry is small, highly specialised
and is of very high value to the growers.

Seed production requires attention to detail and agronomic crop knowledge well beyond that
needed to grow the same plants for pasture or cereals and grain legumes for grain. As a
result, there are very few specialised seed growers. Most seed is produced in association
with other enterprises, such as grazing and mixed farming so specific employment details
are not readily available. Apart from on-farm labour, Tasmanian seed production contributes
to downstream employment in a number of ways.
    Contract work to grow, protect and harvest the crop in some instances but most growers
    have the necessary equipment to perform these operations.
    Machinery sales and maintenance.
    Harvesting contractors.
    Transport contractors.
    Seed cleaning and sales.

The Tasmanian seed industry experienced major expansions in the late 1970s and early
1980s, and again in the 1990s, principally in the area of grass and clover seed production,
and during the past two years following the release of Bass and Targa oats.

Contract production of certified seed of proprietary herbage and cereal cultivars that are
covered by Plant Breeders Rights (PBR) has expanded significantly during the past ten
years. Tasmanian production of such cultivars is expected to continue to increase as new
cultivars are developed and released. The planned release of new herbage and cereal
cultivars from cultivar development programs undertaken by DPIWE and the Tasmanian
Institute of Agricultural Research will assist expansion of the seed industry.

Tasmania has developed a reputation for producing very high quality seed because of its
cool, temperate climate and longer cooler growing season.




Department of Primary Industries, Water and Environment                               Page 108
Pasture, legume and cereal seed crops industry




Tasmania is becoming increasingly recognised as an ideal area for the production of canola
seed. Increased production of canola seed is certain to take place during the next five
years. Proprietary breeders of genetically modified canola and other species see Tasmania
as an ideal place to produce seed of such cultivars, although there is currently a moratorium
on the commercial release of food related genetically modified organisms until 2008.

Industry structure
Production sector
The majority of farms on which herbage seed is produced are located in the central north in
the Cressy, Longford and Whitemore districts. Farmers in other areas are also involved, for
example in the Derwent Valley, Coal River Valley, Cranbrook and various areas of the north-
west and north-east. Seed production in these latter areas is expected to increase. Cereal
and grain legume seed is also produced in the above areas as well as in the central
Midlands.

In 2002/03 there were 86 farmers registered as having crops for the production of Certified
Seed (herbage, cereal, grain legumes and other, such as canola). An unknown number of
farmers will also produce uncertified seed for their own use, opportunity sales and under
contract to rural merchants. Areas and quantities in this latter category are unknown but
the majority of such seed will be sold for use in Tasmania.

Processing sector
Seed processing primarily involves seed cleaning and packaging and occasionally, if
required, dressing the seed with fungicides and/or insecticides.

Six privately owned seed cleaning plants are located in Tasmania. These include one mobile
cleaner, which is used primarily for on-farm cleaning of cereals and grain legumes. DPIWE
owns a cleaning plant that is located at the Cressy Research Station.

At present, cleaning plant capacity is
adequate to handle the quantity of seed
produced locally. During 2002 two
operators significantly increased the
capacity of their plants. A doubling of the
quantity of seed produced could now be
managed.

Certified seed is normally bagged off the
cleaner and is sold in bags rather than in
bulk. The bags are labelled and/or
branded as required by owners and in
accordance with the Seed Industry
Association of Australia Code of Practice.
                                                                  Lupinus crop

Markets
Until about 1990 most grass, clover, cereal and grain legume seed produced in Tasmania
was sold on the local market. Cultivars for which seed was produced up to that time were
public cultivars. The introduction of Plant Variety Rights (later Plant Breeders Rights) saw a
major change, that being a significant change to the production of seed of proprietary
cultivars. By the end of the 1990s practically all of the seed produced in Tasmania was of
proprietary cultivars, the majority of which is exported from Tasmania to other Australian
states and international markets.

A considerable quantity of seed is still imported into Tasmania because the owners of many
plants choose to have their seed production activities in other Australian states or New




Department of Primary Industries, Water and Environment                                 Page 109
Pasture, legume and cereal seed crops industry




Zealand. Seed of some plants is also imported from the USA and Europe. The quantity of
seed imported into Tasmania is likely to remain at similar levels to the present quantities.

Infrastructure
In an Australian context there are two recognised peak industry bodies: the Seed Industry
Association of Australia representing mainly non-grower elements, as well as some growers;
and the Grains Council of Australia representing seed growers. In Tasmania there is a local
organisation, Seed Growers of Tasmania, which addresses contractual and other practical
issues of concern to growers, and the Cereals and Seeds Section of the Tasmanian Farmers
and Graziers Association which concerns itself with government and policy issues. There is
some grower cross-representation with respect to these Tasmanian organisations.

Government inputs and involvement
Regulation
Tasmania has retained its seed regulation through the Seeds Act 1985. This Act was
amended in 2000 to require sellers of seeds to provide a certificate of analysis as a means
to inform buyers as to the quality of the seeds. The Act not only assists with buyer
education, but also helps protect Tasmanian markets by protecting against the introduction
of weeds into Tasmania. The Seeds Regulations 2000 detail prohibited seeds and prescribes
seed sampling, testing, certification and registration processes.

DPIWE administers the Seeds Act 1985 and Seeds Regulations 2000.

Research, development and extension
The seed testing station that is accredited for Tasmania by the International Seed Testing
Association is owned and staffed by DPIWE. The Department also provides a certification
inspector and professional advice to seed producers. Agronomic and other research is
conducted as necessary by staff from the Department and TIAR, to solve problems
associated with seed production.

Industry value
                                              91/92       96/97   97/98    98/99   99/00   00/01    01/02
Production
- Area covered (ha)                                903             1,784                    1,320    1,802
- Number of landowners                              51                66                       62       70
- Direct employment (approx. no.)                  110               120                      115      170
- Indirect employment (approx. no.)                 25                25                       25       30
- Estimate of product quantity                     942             1,460                   2,149*    1,210
(tonnes)
- Product ‘farm gate’ value ($m)                   1.8               4.2                      6.0       5.0
Processing and distribution
(wholesale)
-Number of operators                                 9                 9                        9         9
- Product value ($m)                               3.6               8.0                      9.5       8.5
- Direct employment (approx. no.)                   15                15                       20        20
- Indirect employment (approx. no.)                 30                30                       30        30
Market destination – local (%)                      95                40                       50         5
Market destination – mainland (%)                    5                60                       70        93
Market destination – overseas                      <1                <1                        25         2
export (%)
Value of exports (mainland &                                         6.0                      9.0       8.0
overseas) (approx. $m)
Note: * Large increase due to genetically modified canola production.
Source: industry surveys




Department of Primary Industries, Water and Environment                                             Page 110
Pasture, legume and cereal seed crops industry




Opportunities
    The greatest opportunity for the Tasmanian seed industry is associated with the
    continued development by the Tasmanian Institute of Agricultural Research and DPIWE
    of new cultivars for cool temperate regions of the world. Ongoing support for both
    present and future activities in this area together with commercialisation arrangements
    with Tasmanian businesses and production of all elite seed in Tasmania will result in
    expanded opportunities for the Tasmanian seed industry and Tasmanian agricultural
    industries generally.
    A major opportunity exists for the expansion of the presently significant out of season
    production of seed for Northern Hemisphere seed companies and breeders and
    developers of new cultivars.
    Increase yields of clean seed per hectare. Presently much of the available and well-
    known knowledge is not being applied by a number of Tasmanian seed growers.
    Improved application of the available knowledge would concurrently improve seed
    quality.
    The installation of improved seed cleaning equipment and some new equipment by some
    of the seed cleaners opens opportunities for new seed crops to be grown in Tasmania.
    Certain other harvesting and cleaning equipment if installed would extend this
    opportunity.
    Increased use of seed testing services, both to enhance the value of finally processed
    seed lots and to illustrate to owners or buyers the true quality of the seed. This would
    further enhance the image of Tasmania as a premier seed producing area.
    Industry should be encouraged to supply seed of the highest genetic quality for seed
    production. Certification schemes are necessary for the production of seed of guaranteed
    genetic integrity. An objective of the Tasmanian seed industry should be to significantly
    reduce or eliminate the production of uncertified seed.
    Continued merit testing of herbage cultivars should ensure local farmer support for the
    Tasmanian seed industry and the sowing of the best cultivars for local conditions, in
    particularly Tasmanian cultivars developed for Tasmanian conditions.

Challenges
    Ensure the continuation of Tasmania’s established reputation as a premier seed
    production area.
    Ensuring import and export quarantine requirements are met to a high standard to
    maintain Tasmania’s relatively weed, pest and disease free status.
    Increase returns to growers principally via increased production from all crops sown.




                                     Trial Lupin crop being grown at the Forthside Research Station




Department of Primary Industries, Water and Environment                                               Page 111
Pasture, legume and cereal seed crops industry




Further information

Seed Laboratory & Certification                           Extensive agriculture
Mt Pleasant Laboratory                                    Seed Production/Processing/Other Issues
DPIWE                                                     Stuart Smith
PO Box 46                                                 Mt Pleasant Laboratory
Kings Meadows, Tasmania, 7249                             DPIWE
Ph: 03 6336 5248 Fax: 03 6344 4961                        PO Box 46
                                                          Kings Meadows, Tasmania, 7249
                                                          Ph: 03 6336 5234 Fax: 03 6344 4961

Mr C Kilby                                                Tasmanian Farmers and Graziers Association
Seed Growers of Tasmania                                  PO Box 193
Ph: 03 6393 7010                                          Launceston, Tasmania, 7250
                                                          Ph: 6331 6377 Fax: 6331 4344
                                                          Web: www.tfga.com.au
Seed Industry Association of Australia                    Grains Council of Australia
PO Box 3572                                               PO Box E10
Manuka, Australian Capital Territory, 2603                Kingston, Australian Capital Territory, 2604
Ph: 02 6232 7933 Fax: 02 6232 7911                        Ph: 02 6273 3000 Fax: 02 6273 3756
Email: info@sia.asn.au                                    Email: gca@grainscouncil.com
Web: www.sia.asn.au                                       Web: www.grainscouncil.com
Mr W Early                                                Mr G Cameron
Roberts Limited, Seeds/Grain Division                     Webster Seed, Feed, Grain and Contract
Oaks Rd                                                      Cropping
Carrick, Tasmania, 7291                                   397 Westbury Road
Ph: 03 6393 6060 Fax: 03 6393 6004                        Prospect, Tasmania, 7250
Web: www.robertsltd.com.au                                Ph: 03 6336 1700 Fax: 03 6343 3188
                                                          Web: www.websterltd.com.au
Mr R Dent                                                 Mr B Heazlewood
W A Dent and Son                                          Heazelwood Seeds
430 Oaks Rd                                               482 Heazelwood Lane
Oaks, Tasmania, 7303                                      Whitemore, Tasmania, 7303
Ph:03 6397 3184                                           Ph: 03 6397 3458




Department of Primary Industries, Water and Environment                                        Page 112
Emerging and other field crops industry




EMERGING AND OTHER FIELD CROPS
Introduction
DPIWE, the Tasmanian Institute of Agricultural Research and industry have been actively
involved with the identification and development of a range of new or alternative field crops
for a number of years. These crops are generally for grain or seed production for either
livestock or human consumption. The end markets range from small local or national ones
to larger international exports with stringent quality requirements. There are also
opportunities for developing local import replacement markets.

There are a broad range of emerging and other field crops. These include, for example,
linseed that has been grown in the State previously for which new opportunities have
emerged, canola that is grown in similar regions in both Australia and elsewhere, to crops
that are new to Australia and require detailed agronomic assessment and development.
Generally the infrastructure required to grow and process these crops is already in place
within the Tasmanian agricultural industry, or is existing technology that can be adapted to
any unique handling, cleaning, storage, transport or value-adding processes.

Buckwheat
Buckwheat production in Tasmania is based mainly on export to Japan, but also new
national markets are developing. It is contracted and cleaned by Heazlewood Seeds at
Whitemore, then exported. Further processing to noodles is conducted in Japan, where this
is regarded as a high quality product. No chemicals are applied to the crop and harvesting is
conducted with existing equipment used for other grains.

The crop is planted in early summer, often after early pea crops have been harvested.
Buckwheat was a new crop to Australia and only Tasmania has successfully continued
production over a number of years. It is best grown with irrigation outside the frost period.
Tasmanian buckwheat is perceived as better quality than the grain grown on the mainland,
and the export to Japan provides good exposure of Tasmania’s clean and green image in
that market.

Production has been stable for a number of years with between 10 to 15 growers harvesting
up to 250 tonnes, and after cleaning, exporting 170 tonnes. The returns to growers are
attractive.

Canola
While canola seed production is stable, commercial grain production has increased
dramatically in recent years. Industry estimates for the 2001/02 season indicate further
expansion in area and production quantity.

Tasmanian canola production
                       96/97 97/98 98/99 99/00
Production (tonnes)         66  156 1,198 1,521
Area (ha)                   80  167   877   881

Grain production is dryland based and produced in the main cereal growing areas of the
State. Grain is sold locally and interstate, although costs of export are higher. All grain
traded is subject to industry quality standards. A small processing facility has been
operating in Tasmania for the last three years. The extractable oil and meal by-product is
sold into local markets replacing imports.

The yield and quality of Tasmanian grown canola should be equal to or better than mainland
canola. The State’s comparatively milder finishing conditions allow for a longer flowering
period, better seed set and higher oil content.

Cultivation the crop is similar to barley, except that some extra inputs are required. The
production infrastructure presently available for other grains would also be suitable for



Department of Primary Industries, Water and Environment                                Page 113
Emerging and other field crops industry




canola. DPIWE is screening a range of cultivars to determine those most appropriate for
Tasmanian conditions. Some specialty cultivars are also being assessed in these trials to
determine their suitability to Tasmania.

Pulse Crops
Since the 1999/00 season, Albus lupin (Lupinus albus) production has increased to
approximately 1,500 tonnes. It is essentially export based for human consumption, with
strict quality guidelines in regard to seed size and colour. The bean is eaten as a snack food
similar to peanuts. This market is based upon the bitter type of Albus lupin for which
premium prices are paid for the larger bean. The sweet type can be used for livestock feed,
however production of this variety remains low.

Existing production infrastructure is utilised, although some modification of machinery is
required, and the growing season is similar to cereals. The Tasmanian Institute of
Agricultural Research is currently conducting both agronomic and varietal assessments to
increase the knowledge base for this new crop.

Although narrow leaf lupins (Lupinus angustifolius) have been grown in Tasmania for a
number of years, production has remained at around 500 tonnes per year. Growers have
experienced problems with both variable yields and weed control. With the introduction of
better cultivars from mainland breeding programs, narrow leaf lupin production is expected
to increase.

The narrow leaf lupin is currently used for livestock feed rations only. Over 5,000 tonnes of
narrow leaf lupins have been imported into the State each year. Based on a reasonable
price of $250/tonne, this represents approximately $1.5 million worth of imports.

Field Peas
Field pea production in Tasmania has been quite small in recent years. Field peas can be
grown for both human consumption and livestock feed purposes. Markets are becoming
more specific in their needs and therefore more discerning. As grain for livestock feed,
returns to growers are generally not high enough to encourage more widespread
production.

Maple Peas – Production has been stable at 500–1,000 tonnes for a number of years. A local
grower is supplying an export market with most of the Tasmanian production.

Blue Peas – Production can be for either human or farm-animal consumption. For human
consumption the peas would need splitting, however facilities are not available in Tasmania
at this stage. If new high yielding varieties can be identified blue pea production could be
increased to replace 2,000–3,000 tonnes of the narrow leaf lupins currently imported. The
Tasmanian Institute of Agricultural Research is screening varieties for high yield potential
and disease tolerance.

Marrowfat Peas – Interest has been shown in marrowfat pea production for export markets.
Tasmanian Institute of Agricultural Research evaluations are showing good adaptation of
existing varieties to Tasmanian conditions and further industry development is being
undertaken.

Other Legumes
Lentils and chickpeas are emerging field crop industries in mainland Australia. Specialty
lines for niche markets or import substitution offer the most obvious potential for Tasmania.
Both lentils and chickpeas are used for general culinary purposes. Cultivars are being
evaluated in research by the Tasmanian Institute of Agricultural Research, and many
growers are showing keen interest. A new lentil variety that has been developed in
Tasmania is to be released soon. Due to disease problems in mainland Australia with
chickpeas, the market for Tasmanian chickpeas is presently quite strong, however as




Department of Primary Industries, Water and Environment                                Page 114
Emerging and other field crops industry




disease-free seed is difficult to source it would require a major industry advocate to quickly
take advantage of this opportunity before the industry recovers interstate.

Faba beans are being grown for the livestock industry as a substitute for imported narrow
leaf lupins. Up to 500 tonnes are expected to be produced in 2002/03. Expansion
opportunities could be based upon increased livestock markets and/or development of
human consumption markets requiring larger grain size.

Other Crops
A range of other crops are grown on a very small scale and are generally dependent upon
industry advocates to ensure production, or are only required in limited quantities. These
crops include linseed and cereal rye that have been grown for a number of years, but have
small specialist markets often developed by individual growers.

Industry structure
Production sector
The production sector for these field crops is generally utilising existing agronomic practices
and technology, or undertaking minor modifications for the Tasmanian situation. Most crops
are being grown experimentally, as part of a diversification program, or to fill specific niche
markets.

Processing sector
There is a mixture, though generally limited, of processing undertaken in Tasmania.
Increases in crop production would generally be required to make significant increases in
processing capability a viable option.

Markets
Markets for these crops are varied. Exports tend to be a focus, though there are also
opportunities for replacing imports with the locally produced product.

Infrastructure
DPIWE and the Tasmanian Institute of Agricultural Research have strong links to these
industries, providing informal liaison where there is an absence of structured industry
groups. The Tasmanian Farmers and Graziers Association also provides a forum for industry
networking and coordination.

Government inputs and involvement
Regulation
There are no specific Acts or Regulations that relate to this industry, though quarantine
requirements apply to imports and exports, with exports also covered be the
Commonwealth Export Control Act 1982.

Research, development and extension
DPIWE and the Tasmanian Institute of Agricultural Research have provided significant
assistance to industry in the identification and development of a range of field crops.
Various research grants, and DPIWE research farm staff and facilities, have allowed a
number of crop varieties to be developed, and production systems refined.

Industry value
The combined farm gate value for all these crops is difficult to estimate, though it is
probably under $1 million. However, there is potential for significant increases in this value
with the further development of the industries.




Department of Primary Industries, Water and Environment                                 Page 115
Emerging and other field crops industry




Opportunities
    Tasmania’s relatively weed, pest and disease free status provides significant advantages
    for cropping in Tasmania. Together with high quality production practices, market
    demands for eco-friendly products should place Tasmania in a strong position to supply
    a number of export markets.
    An extensive knowledge base already exists in Tasmania for the growing of a variety of
    crop types.
    There are also opportunities for producing products to replace imports.

Challenges
    Ensuring adequate market development is undertaken to provide commercially viable
    markets.
    Providing sufficient processing and value-adding to produce a product with a value
    sufficient to overcome increased transportation costs from Tasmania to mainland and
    overseas markets.

Further information
Extensive Agriculture Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 46
Kings Meadows, Tasmania, 7249
Ph: 03 6336 5277 Fax: 03 6344 9814
Email: ExtensiveAgEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Tasmanian Institute of Agricultural Research
PO Box 193                                                GPO Box 252-98
Launceston, Tasmania, 7250                                Hobart, Tasmania, 7001
Ph: 03 6331 6377 Fax: 03 6331 4344                        Ph: 03 6226 1804 Fax: 03 6226 7450
Web: www.tfga.com.au                                      Email: Gwen.Dumigan@utas.edu.au
                                                          Web: www.tiar.tas.edu.au




Department of Primary Industries, Water and Environment                                        Page 116
Vegetable sectors




VEGETABLE SECTORS
Summary

Vegetable crops returned in excess of $138 million farm gate value to the Tasmanian
economy in 2001/02 of which nearly $97 million was from potato production. Vegetables
accounted for approximately 20% of the gross value of agricultural production in that year.

The majority of vegetable crops are produced in the high rainfall, high fertility areas of the
north-west, Meander and north-east of Tasmania. In recent years, there has been some
movement into the drier north of the State where irrigation is available. Almost all
vegetable production depends on some level of irrigation.

Most vegetables are produced under contract for processing. A small but increasingly
important part of the industry is directed to the fresh vegetable market, as opportunities to
export to niche markets are sought out.

Summary of value of vegetable industries ($m)
                                              91/92       98/99     99/00    00/01    01/02
Production value (farm gate)
- Potatoes*                                      51.8       82.3      85.6     86.6     96.8
- Other processed vegetables*                    17.9       23.7      25.1     22.2     24.5
- Onions*                                        22.1         9.9      8.6      6.0      8.1
- Other Fresh Vegetables*                        c.4.0      c.6.0      5.5      6.2      6.7
- Vegetable Seed (gross value)                   c.1.5        2.9      2.0      1.8      2.5
- Emerging and other vegetable                                                          c.10
crops
Total                                           c.100      c.130     c.135    c.130    c.145
Source: see individual industry tables (* indicates industry survey rather than ABS figures).




Department of Primary Industries, Water and Environment                                         Page 117
Potatoes industry




POTATOES
Introduction
Tasmania’s potato industry is the largest sector of the State’s vegetable industry, making up
approximately 70% of the total value. The Tasmanian potato industry comprises a
processing sector, fresh market sector and a seed sector.

About 80% of potatoes are grown for processing, with the industry focussing on frozen
French fry production. Most potatoes are sourced from the northern half of the State. The
main processing variety grown is Russet Burbank. Smaller quantities of Kennebec, Shepody
and Ranger Russet are grown to allow for early season production.

Two food processing companies have processing facilities in Tasmania. McCain Foods
(Australia) Pty Ltd has a processing plant at Smithton, and Simplot Australia Pty Ltd has
processing plants in Ulverstone and Scottsdale, though the Scottsdale plant is due to close
in late 2003. Both companies produce French fries and associated products for the
Australian retail and fast food markets, including McDonalds and KFC.

The fresh market sector makes up approximately 10% of the State’s potato production.
Fresh market potatoes are sold locally though supermarkets, greengrocers and roadside
outlets. Tasmanian fresh market production is also seeing an increase in specialty and
gourmet lines of potatoes. Varieties such as Pink Eye and Kipfler are much sought after by
caterers and specialist retailers on the mainland. However, with the greater availability of
proprietary lines subject to Plant Breeders Rights, more specialty varieties are now also
being grown for these markets.

Potatoes grown for processing and fresh market are produced from certified seed, which
makes up approximately 10% of the total industry tonnage. The Tasmanian Seed Potato
Certification Scheme was founded in 1933. The scheme has recently undergone some
changes with the implementation of National Standards for Seed Certification in 2001. The
Tasmanian seed potato scheme involves 110 growers, producing more than 25,000 tonnes
of seed potatoes of 25 varieties. These seed potatoes not only supply the local industries,
but there is also strong interest from mainland buyers due to Tasmania’s relative freedom
from pests and diseases. Export opportunities are under investigation.

The major resources required by the potato industry are good quality land and water, and
skilled operators. Traditionally based on the north-west coast, potato production is
increasingly moving to the non-traditional sandy
soils of the Midlands and north-east. This poses
challenges to both the growers and the processing
companies, as management issues are different
from those on the more traditional soils and areas,
but with improvements in irrigation equipment and
techniques, these areas are being managed well.

The major products produced by the Tasmanian
potato industry are French fries for the national
retail and fast food markets. These are produced
under the McCain and Birdseye brands. French fries
are also supplied to McDonalds, KFC and other fast
food chains throughout the country. There have
been some exports of product to Asia as this has
                                                            A number of varieties of potatoes
been identified as a potential new market.                      are grown in Tasmania
Competitiveness of product price seems to be the
main barrier for this.

It is thought that potatoes first came to Tasmania in 1803 with Lt. Bowen. Potatoes were
shipped from Hobart Town to mainland Australia. It was soon discovered that the red



Department of Primary Industries, Water and Environment                                 Page 118
Potatoes industry




ferrosol soils of north and north-west Tasmania were favourable for potato growing. Regular
trade in quality Tasmanian potatoes started in the 1870s. Late blight was officially recorded
in 1909 and two years later Redskin was lost due to the disease. This led to the adoption of
the Brownell variety for its blight tolerance and better storage and cooking attributes.

In the 1920s the annual harvest was about 69,000t but with average yields of only 5t/ha.
Yields rose to 15t/ha towards the end of the decade through better growing techniques. By
the late 1920s, virus diseases reduced yields forcing the Department of Agriculture to
introduce an improved seed scheme. The Tewkesbury Potato Station was founded in 1933
and a Seed Potato Certification Scheme was introduced.

During the war years of 1944 and 1945, potato production peaked at 350,755 tonnes and
food processing plants were established at Scottsdale, Devonport, Ulverstone and Smithton.
At this time the market for potatoes changed from export to processing, either as canned or
dehydrated product.

After decline during the early 1960s, the industry was revitalised with the introduction of
frozen French fry production at the Edgell plants in Ulverstone and Scottsdale. In 1963,
Edgell’s produced 1,200 tonnes of frozen French fries at Ulverstone with further annual
increases.

By the mid 1970s the dual-purpose cultivar Kennebec was the major cultivar used. After
many years of evaluation, the Russet Burbank cultivar was introduced. This cultivar is
preferred for its long, blocky tubers, good storage ability and good processing qualities.
Russet Burbank has now largely replaced Kennebec, although small quantities of both
Kennebec and Shepody are grown for early production. In more recent years, another
Russet cultivar, Ranger Russet, has been introduced and will become increasingly
important.

Tasmania produces approximately a quarter of Australia’s potatoes. About 1.3 million
tonnes of potatoes are produced nationally and this accounts for about 1% of total world
production.

The main advantages of potato production in Tasmania are the quality of the product and
the continuity of supply of the product. This is due largely to the well structured, fertile and
well-drained red ferrosol soils, availability of water and temperate climate without extremes
in weather conditions.

The moderate climate also means that there is a greater window for planting and
harvesting, with the crop being able to be stored in ground if necessary. A progressive
farming community and an industry based on quality research, development and advice also
gives significant advantages.

Processing factories have ISO accreditation in quality and environmental standards, and
operate according to the international Hazard Analysis and Critical Control Point (HACCP)
principles. Potato growers are required to fill out paddock input records, in particular
chemical spray records, based on an industry standard. These records are required by the
processing companies prior to crop harvest.

Industry structure
Production sector
The production sector of Tasmania’s potato industry is concentrated on the north-west
coastal regions of the State. However, potato growers are found right across the State.
Although based primarily on the north-west coast of Tasmania, potato production for
processing is increasingly moving to the non-traditional sandy soils of the Midlands and
north-east. The fresh market crop is grown in many areas across the State, though
concentrated in the north-west, and with many speciality varieties grown in the south. The



Department of Primary Industries, Water and Environment                                  Page 119
Potatoes industry




seed potato crop tends to be grown in higher altitude areas in the north-west and isolated
areas in the north-east and Midlands. The majority of the Tasmanian crop is grown under
contract to processors on the north-west coast.

The processing potato crop is planted from mid September to mid November, with harvest
commencing early February. Harvest continues through to July/August, with the bulk of
intake in May and June, when the processing companies are filling their bulk storage
facilities. The storage facilities allow year round production of French fries from the factories
to meet their market requirements.

Fresh market potatoes are planted, harvested and grown nearly all year round to supply the
local markets. The main harvest period is spring to autumn.

The seed potato crop is planted in November/December with an ideal harvest time of May.
The seed crop is then stored in temperature controlled coolstores until the planting of the
next season’s crop begins.

Most potato growing farms are mixed enterprises, usually including other vegetables and
livestock, and are owner operated. Traditionally many farmers on the fertile soils of the
                                                          north-west coast, and of the
                                                          north-east around Scottsdale,
                                                          have grown one or two paddocks
                                                          of potatoes each year, although in
                                                          recent years, the trend has been
                                                          to grow large areas of potatoes
                                                          under centre pivot irrigation in
                                                          the Midlands and north-east
                                                          coastal fringes.

                                                             The exact number of growers is
                                                             difficult to determine, as many
                                                             grow for both processing
                                                             companies, with fresh market
                                                             growers only producing small
                                                             amounts of product so not
                                                             identifying as potato growers.
                                                             However, it is believed that there
                                                             are about 670 potato growers in
Potato growing dominates the Tasmanian vegetable sector      the State, making up about 17%
                                                             of the State’s farmers.

Processing sector
There are two potato processing companies operating in Tasmania, Simplot Australia Pty Ltd
and McCain Foods (Australia) Pty Ltd. Between them they take about 80% of the State’s
potato harvest and turn them into frozen French fries and other value-added potato
products. Both also process other vegetables.

McCain Foods has a large multipurpose freezing plant at Smithton where it processes
potatoes, producing frozen French fries, potato cakes and croquettes. Simplot produces
French fries, starch, hash browns and gems in plants at three localities. It runs a large and
modern specialist French fries facility at Ulverstone, which has allowed production for this
market to increase in recent years. The Simplot plant at Scottsdale has also become a
specialist potato plant that freezes French fries, gems and other specialty lines. However,
this plant is scheduled for closure in December 2003. Production will be moved to the
company’s Ulverstone plant which is undergoing expansion. Potato crops will be still grown
in the Scottsdale region and transported to Ulverstone for processing. The company’s
multipurpose plant at Quoiba, near Devonport, produces limited quantities of frozen potato
products.



Department of Primary Industries, Water and Environment                                  Page 120
Potatoes industry




Modern storage facilities for the crop make it possible for both the Simplot and McCains
processing plants to produce French fries all year round.

Markets
The majority of potato products are sold on the Australian retail market, although
processors have been working to establish export markets. Exports of French fries are
limited because of high transport costs and relatively high costs of production.

Australian retail market customers include the fast food companies McDonalds and KFC, as
well as the catering and retail markets of chip shops and supermarkets.

Fresh potatoes are sold locally through supermarkets, greengrocers, vegie-sheds, and
roadside and on-farm sales. Tasmania has become well known for some varieties of fresh
potatoes, some of which (e.g. Pink Eye and Kipfler) are keenly sought by caterers and
specialist retailers on the mainland. The range of specialty and gourmet lines is increasing in
the fresh market with greater availability of proprietary lines that are subject to Plant
Breeder’s Rights.

The majority of commercial processing crops are grown from seed that is produced under
the long established Tasmanian Seed Potato Certification Scheme. The processing
companies require their growers to use certified seed, and all seed exported from the State
is certified under this scheme. The seed industry has undergone a transition with the
implementation of National Standards for seed in July 2001. There is strong interest in the
seed trade, as Tasmania’s isolation and relative freedom from pests and disease are
perceived as strong advantages by buyers in mainland states.

Infrastructure
Several organisations monitor grower and public requirements. At a State level, the
Tasmanian Farmers and Graziers Association (TFGA) have a Potato, and a Vegetable,
Council to manage the particular requirements of the potato industry, and has growers
representing all facets of potato growing. In addition, the Tasmanian Fresh Market Certified
Seed Potato Growers Association is linked to the TFGA and is concerned with the production
and marketing of fresh market varieties of seed potatoes.

Nationally, Tasmanian potato growers have representation on the Australian Potato Industry
Council, which is the umbrella organisation for the entire potato industry. The Seed Potato
Advisory Group (SPAG) has representation from all seed potato growing states, and their
role is to maintain and develop a relevant set of National Standards for Certification of Seed
Potatoes for the benefit of the Australian potato industry.

Processors in Tasmania have always had contractual agreements for the supply of raw
material. Each of the processors has a commercial and seed grower association that exists
essentially for negotiation of contractual agreements. The processors also have
representation on the national body, Potato Processing Association of Australia .

The increasing costs of machinery in recent years have forced an increasing number of
growers to move towards the use of contractors for planting, application of chemicals and
harvesting. At the same time, the industry has a very strong commercial agricultural
services sector that supplies chemicals, advises on pest, weed and disease control, and
provides irrigation scheduling and nutrition advice. The north-west coast is highly serviced
in this area, and to a degree this has resulted in a decrease of grower responsibility for crop
production. Recent developments have seen the establishment of grower driven discussion
groups within the processing industry. These are proving to be successful in increasing
yields and productivity of the grower, as well as increasing their enthusiasm in the industry.
These groups are supported by the processors, the Tasmanian Farmers and Graziers
Association, and DPIWE.



Department of Primary Industries, Water and Environment                                 Page 121
Potatoes industry




The production sector of the Tasmanian potato industry relies on trucks and semi-trailers to
transport the raw product to the factories. The processed product is then transported via
semi-trailer to shipping ports, then on ships across Bass Strait to mainland markets.

Government inputs and involvement
Regulation
DPIWE manages a Seed Potato Certification Scheme, which operates under the National
Standards for the Certification of Seed Potatoes. Processing companies require their growers
to use certified seed, while all seed exported from the State is certified under this scheme.
The purpose of the scheme is to minimise disease incidence and provide the best quality
seed to industry.

The Commonwealth Plant Breeder’s Rights Act 1994 aims to encourage plant breeding and
innovation through the granting of a limited commercial monopoly to breeders of new
varieties. Plant Breeder’s Rights are exclusive commercial rights to a registered variety. The
rights are a form of intellectual property, similar to patents and copyright.

Once a new variety has been developed, and an application for a Certificate of Plant
Breeder’s Rights has been granted, the Act confers the right to exclude others from doing
certain acts in relation to the production, reproduction, conditioning, sale, import, exports
and stocking of the variety. However, there is a public interest provision and reasonable
public access is guaranteed under the Act.

Research, development and extension
DPIWE works in conjunction with processors, growers, and agri-business services to
maintain and improve the international competitiveness of the Tasmanian potato industry.
Many programs are financed through government funds but an increasing number are
covered by joint initiatives through industry funds and Horticulture Australia. DPIWE is
currently working in the areas of:
    integrated pest management;
    the potato virus program;
    supporting industry and grower groups;
    providing seed storage guidelines;
    general potato industry development;
    quality assurance;
    new opportunities particularly for seed exports; and
    sustainability issues related to soil management and irrigation.

The Tasmanian Institute of Agricultural Research (TIAR) undertakes research projects. The
potato projects undertaken by TIAR are consistent with the DPIWE program and address
priorities established by Agricultural Research and Advisory Committees.

Current TIAR projects include:
   National Potato Improvement and Evaluation Scheme program to assess potato
   varieties;
   round seed potato agronomy; and
   assessing physiological age in Russet Burbank.




Department of Primary Industries, Water and Environment                                 Page 122
Potatoes industry




Industry value
(Includes processing, seed and fresh potatoes)
                                               91/92      98/99     99/00     00/01     01/02
Production
- Area covered (ha)                               5,967     7,705     8,758     8,719     8,896
- Number of growers                                 615       754       703       716       670
- Direct employment (no.)                                     450       455       450       470
- Product quantity (tonnes)                    249,769    385,165   414,790   408,094   420,707
- Product ‘farm gate’ value ($m)                  51.8       82.3      85.6      86.6      96.8
Processing and distribution
(wholesale)
- Number of operators (no.)                                    2         2         2         2
- Product value ($m)                                         176       182       175       193
- Direct employment (no.)
Market destination – local (%)                                16        14        14        14
Market destination – mainland (%)                             80        81        82        80
Market destination – overseas                                  4         5         4         6
export (%)
Value of exports (mainland &                                 152       157       150       166
overseas) ($m)
Source: DPIF 1996; DPIWE industry surveys.


Opportunities
One of Tasmania’s main advantages for the potato industry is its climate, soils and relatively
disease free status. The development of new irrigation equipment and practices, and the
establishment of grower driven discussion groups have contributed to an increase in grower
enthusiasm and confidence in the industry.

Recent years have seen a number of changes in production practices and a move to the
more marginal areas of the Midlands and north-east coastal fringe. This has brought
challenges along with the opportunities. There may not be many new areas into which the
industry could expand and develop, so the main method of expansion is to increase crop
yields. Further expansion is also limited by water, land availability and industry
competitiveness.

Government is currently putting effort into realising some of the opportunities for the potato
industry, such as improving efficiency, and supporting grower groups.

There is also an opportunity for an export market for Tasmanian seed potatoes. However,
this would need to be well structured, with supply and payment guaranteed. Also, we need
to consider what would happen to seed that did not meet certification requirements as there
is limited capacity on the local market for the product.

Growers see the processing market as the ongoing backbone of the industry, although there
are other opportunities in the seed and fresh markets. Tasmania could follow UK packaging
techniques for fresh market potatoes sold in supermarkets. This would involve improved
labelling of potatoes and advice on best cooking and storage methods.

Challenges
The most important challenge facing the Tasmanian potato industry is water. The
availability and cost of water is pivotal to the further expansion of the industry. Other issues
include the increasing age of growers, the small farm size (with resultant small contract
sizes) with limited economies of scale, and the difficulties with collaboration to achieve
economies of scale.

As with other agricultural production sectors, the potato industry faces challenges related to
environmental management on-farm. Agricultural operations need to address issues related
to management of the natural environment within triple bottom line principles. The industry



Department of Primary Industries, Water and Environment                                           Page 123
Potatoes industry




will need to consider the role environmental management systems (EMS) have in their
production process.

Other challenges include the ongoing potential for disease threats, with the problem of
volunteer potatoes growing up through subsequent crops having the potential to compound
disease problems. There is also competition from other crops, such as poppies and
pyrethrum, and the issue of very high land values versus low returns.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 6421 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

John Rich                                                 Tasmanian Institute of Agricultural Research
TFGA Vegetable Council Executive Officer                  GPO Box 252-98
PO Box 193                                                Hobart, Tasmania 7001
Launceston, Tasmania, 7250                                Ph: 03 6226 6280 Fax: 03 6226 7450
Ph: 03 6332 1800 Fax: 03 6331 4344                        Email: Gwen.Dumigan@utas.edu.au
Email: john_rich@bigpond.com                              Web: www.tiar.tas.edu.au
Web: www.tfga.com.au
Mr Tony Gietzel                                           Mr Doug Lockhart
Chairman, Seed Potato Advisory Group                      President, Tasmanian Fresh Market Certified
Ph: 02 9960 9044 Fax: 02 9609 0485                              Seed Potato Growers Association
Email: tony.gietzel@snackbrands.com.au                    37 Adams Road
                                                          Lebrina, Tasmania, 7254
                                                          Ph: 03 6395 6127
Mr Milton Rodda                                           Simplot Australia Pty Ltd
Chairman, Aust Potato Industry Council                    Mason Street
Ph: 03 5339 2241                                          Ulverstone, Tasmania, 7310
Email: mhrodda@mccains.com.au                             Ph: 03 6429 6000 Freecall: 1800 061 279
McCain Foods (Aust) Pty Ltd
Gibson St
Smithton, Tasmania, 7330
Ph: 03 6452 1321 Freecall: 1800 065 521




Department of Primary Industries, Water and Environment                                        Page 124
Other processed vegetables industry




OTHER PROCESSED VEGETABLES
Introduction
The Tasmanian processed vegetable industry covers a wide range of crops. The major crops
processed are green peas, green beans, carrots, broccoli, other brassica, and onions. These
vegetables are processed into frozen product for the Australian domestic markets. Recent
years have seen consumer interest in value-added vegetable products, leading to the
production of frozen stir fry and sauce meals. These contain mixed vegetables, a packaged
sauce and ‘just add meat’ label, and have proven to be successful with consumers.

The processing sector accounts for the majority of Tasmania’s vegetable production, apart
from onions, which have a large fresh export market. Land, water and skilled farmers are
the most important resources required for this industry.

The history of the development of the Tasmanian processed vegetable industry stems from
demand for dehydrated vegetable for the troops in the Second World War. This led to the
building of factories at Scottsdale, Devonport, Ulverstone and Smithton. After the War, the
factories were sold to various local operators and in the 1950s concentrated on freezing and
canning a variety of vegetables. As frozen vegetable demand increased, dehydration
stopped in the 1970s, with canning being stopped in the early 1990s. Ulverstone and
Scottsdale became French fry processing factories only, leaving the Smithton and Devonport
plants as multipurpose vegetable processors, with Smithton also doing French fries.

Vegetable processing in Tasmania is now operated by internationally owned companies
Simplot Australia Pty Ltd and McCain Foods (Australia).

The history of vegetable processing in Tasmania has seen many changes; in methods,
crops, areas grown, and in owners. Many vegetables were processed in the 1940s and 50s,
including beetroot, parsnips and swedes that are no longer processed today. The industry
has also seen a shift in the distribution of production areas, particularly in green peas. Peas
have moved from the majority of crop being grown in the red soils in the north-east and
north-west to the lighter, more marginal soils of the Midlands. There have been many
advances in harvest techniques, from semi-mechanical to fully mechanised harvest
operations.

Tasmania’s processed vegetables are sold primarily on domestic markets. The State
supplies 85% of the national frozen green
pea market, and 75% of the frozen green
bean market.

The processed vegetable industry is
conducted right across the State, with a
concentration in the north-west and
Midlands, with green pea production also
in the Coal River Valley. Given the
number of vegetables grown and
processed, this industry is conducted all
year round. The green pea harvest starts
in mid November, and can carry through
to February. This is then followed by
green beans, brassica vegetables, onions                    While not a major part of the Tasmanian processed
and potatoes.                                             vegetable industry, brassica species are still important


Tasmania’s main natural advantage in
the processing vegetable industry is the temperate climate, making the State one of the few
places in the world that can grow and process green peas for three months of the year.
Reliable rainfall, fertile soils, low disease incidence and an experienced and skilled workforce
give Tasmania the advantage in growing processing vegetables.



Department of Primary Industries, Water and Environment                                                 Page 125
Other processed vegetables industry




Processing factories have ISO accreditation in quality and environmental standards, and
operate according to the international Hazard Analysis and Critical Control Point (HACCP)
principles. Vegetable growers are required to fill out paddock input records, in particular
chemical spray records based on an industry standard. These records are required by the
processing companies prior to crop harvest.

Industry structure
Production sector
Traditionally, vegetable growing has taken place primarily on the north-west coast. The
majority of vegetable farms are mixed enterprises and operations typically involve some
dairying or grazing. An average vegetable farm is about 100 hectares in size, usually owner
operated, with a high reliance on the use of family labour and casuals for sowing, planting
and in some crops, harvesting.

There are increasing quantities of processed vegetables being grown in the northern
Midlands and southern Tasmania on cheaper land and in areas where a wider harvest
window can be achieved. The lighter Midlands soils with centre pivot irrigation are ideally
suited to the production of green peas and beans.

The industry is fully serviced by a contracting sector, particularly for harvesting. Similarly
there is a large consulting service sector, over and above the field officer service provided
by the processing companies.

The total gross value for vegetables in Tasmania in 2000/01 was around $147 million, a
sum that is increasing annually.

Processing sector
The two major vegetable processing companies are Simplot Australia Pty Ltd and McCain
Foods (Australia) Pty Ltd. The Simplot vegetable processing facility is located near
Devonport and is primarily a multipurpose vegetable freezing plant. The McCains factory at
Smithton is both a multipurpose vegetable freezing plant, as well as dealing with French fry
and other frozen potato products.

Both plants have had significant investment in recent years and are considered to be long-
term players in the current Australian industry.

Markets
The main market for Tasmanian processed vegetables is the Australian domestic market.
There is limited export of products into Asia, and prospects for exports are very dependent
on improved efficiencies to make processors competitive in the global market.

Although pea production has declined in recent seasons, Tasmania still produces more
green peas than any other state and is second only to Queensland in the production of
green beans (fresh and frozen). Tasmania supplies approximately 85% of Australia’s
requirements for processed green peas. Tasmania’s major competitor across the range of
processed vegetables is New Zealand. In future years, South Africa has the potential to be a
competitor in vegetable production due to reduced labour costs.

In the processed vegetable sector, growth markets exist for products such as frozen meals
and mixed vegetable items are growing. These products are referred to as value-added
products and require vegetables to be processed beyond their basic form. The industry is
currently altering its range of products to best suit the desires of the consumer to pick up
on these markets. Tasmanian processors are considering other components for mixed
frozen vegetable packs that would require the production of a greater diversity of
vegetables.



Department of Primary Industries, Water and Environment                                  Page 126
    Other processed vegetables industry




    Infrastructure
    The processed vegetable industry is represented by the Tasmanian Farmers and Graziers
    Association Vegetable Council. The Council represents growers and one of their functions is
    to discuss the price the farmer will receive before the contract is signed.

    The industry is very dependent on the Federal Government’s Tasmanian Freight Equalisation
    Scheme for off-setting shipping costs to interstate markets. The vegetable industry
    accounts for over 20% of all payments made under the scheme.

    Many of the processed vegetable crops are harvested using specialist machinery by the
    processing companies, or by several contractors. In other crops, the increasing costs of
    machinery in recent years have forced an increasing number of growers to move towards
    the use of contractors for planting, application of chemicals and harvesting. The brassica
    crops are all hand harvested in repeated harvests by a skilled workforce.

    The industry has a very strong commercial agricultural services sector that supplies
    chemicals, advises on pest, weed and disease control, and provides irrigation scheduling
    and nutrition advice. The north-west coast is highly serviced in this area.

    The production sector of the Tasmanian vegetable industry relies on trucks and semi-trailers
    to transport the raw product to the factories. The processed product is then transported via
    semi-trailer to shipping ports, then on ships across Bass Strait to mainland markets.

    Government inputs and involvement
    Regulation
    There are no specific Acts or Regulations that relate to this industry, though quarantine
    requirements apply particularly to imports of unprocessed material, to ensure Tasmania’s
    relative freedom from weeds, pests and diseases is maintained.

    Research, development and extension
    DPIWE addresses a number of issues that benefit the processing vegetable industry through
    key industry partnerships. There are many ongoing DPIWE projects in the Vegetable
    Program. Some of the projects involve:
       quality assurance;
       integrated pest management;
       quarantine;
       new market opportunities;
       transport and freight; and
       sustainability issues related to soil management and irrigation.

    The Tasmanian Institute of Agricultural Research (TIAR) was established by the
                                      Government, the University of Tasmania and industry
                                      organisations to ensure that agricultural research
                                      undertaken in Tasmania is of high quality, aligned with
                                      the needs of industry, and maximises sustainable
                                      economic production. Projects undertaken by TIAR
                                      include:
                                          green pea cultivar evaluation;
                                          green bean cultivar evaluation; and
                                          lateral branching in broccoli.

                                                 The Commonwealth Government provides funding
                                                 through Horticulture Australia Limited, which provides the
                                                 research, development and marketing services to the
Tasmania supplies a major part of the            Australian vegetable industry, including export marketing.
    Australian market for peas




    Department of Primary Industries, Water and Environment                                         Page 127
Other processed vegetables industry




Industry value
The data below refer to the four main crops grown for processing in Tasmania. A significant
proportion of carrots and broccoli grown in the State are now marketed fresh, but the
greater proportion of the other crops is still processed.

Production of green peas and green beans accounts for most of the land that is devoted to
the production of the listed vegetables. They also account for the greatest percentage of
farm gate and product value.

The vegetable processing industry contributes a significant amount to the State’s
employment with approximately half of those employed on a regular casual basis. Vegetable
processing plants are relatively labour intensive. In proportion to the dollar value of their
production, on average they employ 2.5 times as many people as do manufacturing plants.
A considerable casual labour force is required to hand harvest brassica crops such as
cauliflowers and broccoli for processing.

Tasmania’s processed vegetable industry (excluding processed potatoes) has a farm gate
value of nearly $25m, generating exports to the mainland of around $72m.

Green Peas
                                              91/92       98/99     99/00     00/01     01/02
Production
- Area covered (ha)                             5,342      5,919     5,749     5,065     4,959
- Number of growers                                          360       343       283       256
- Direct employment (no.)
- Product quantity (tonnes)                    27,829     34,100    33,700    27,500    28,000
- Product ‘farm gate’ value ($m)                  9.2     12.148    12.083     9.450    10.832
Processing and distribution
(wholesale)
- Number of processors                                         2         2         2         2
- Product value ($m)                                      30.371    30.206    23.625    27.080
- Direct employment (no.)
Market destination – local (%)                            neglig.   neglig.   neglig.   neglig.
Market destination – mainland (%)                           100       100       100       100
Market destination – overseas                                   0         0         0         0
export (%)
Value of exports (mainland &                              30.371    30.206    23.625    27.080
overseas) ($m)
Source: DPIF 1996; DPIWE Industry surveys.

Carrots
                                              91/92       98/99     99/00     00/01     01/02
Production
- Area covered (ha)                                400       300       294       307       263
- Number of growers                                           22        24        22        20
- Direct employment (no.)
- Product quantity (tonnes)                    17,993     21,000    20,600    21,500    18,385
- Product ‘farm gate’ value ($m)                  4.2      2.590     2.546     2.941     2.598
Processing and distribution
(wholesale)
- Number of processors                                         2         2         2         2
- Product value ($m)                                       7.643     7.513     7.118     6.402
- Direct employment (no.)
Market destination – local (%)                            neglig.   neglig.   neglig.   neglig.
Market destination – mainland (%)                           100       100       100       100
Market destination – overseas                                   0         0         0         0
export (%)
Value of exports (mainland &                               7.643     7.513     7.118     6.402
overseas) ($m)
Source: DPIF 1996; DPIWE Industry surveys




Department of Primary Industries, Water and Environment                                           Page 128
Other processed vegetables industry




Broccoli
                                              91/92       98/99     99/00     00/01     01/02
Production
- Area covered (ha)                                202       402       421       501       546
- Number of growers                                           63        65        67        73
- Direct employment (no.)
- Product quantity (tonnes)                     1,293      4,464     4,730     5,710     6,500
- Product ‘farm gate’ value ($m)                  1.2      2.801     3.004     3.305     4.477
Processing and distribution
(wholesale)
- Number of processors                                         2         2         2         2
- Product value ($m)                                       4.637     5.366     5.787     7.988
- Direct employment (no.)
Market destination – local (%)                            neglig.   neglig.   neglig.   neglig.
Market destination – mainland (%)                           100       100       100       100
Market destination – overseas                                   0         0         0         0
export (%)
Value of exports (mainland &                               4.637     5.366     5.787     7.988
overseas) ($m)
Source: DPIF 1996; DPIWE Industry surveys

Beans
                                              91/92       98/99     99/00     00/01     01/02
Production
- Area covered (ha)                             1,250      1,726     2,086     1,849     1,773
- Number of growers                                          185       202       195       184
- Direct employment (no.)
- Product quantity (tonnes)                     9,243     16,800    20,400    17,200    17,400
- Product ‘farm gate’ value ($m)                  3.3      6.148       7.5     6.492     6.622
Processing and distribution
(wholesale)
- Number of processors                                         2         2         2         2
- Product value ($m)                                      13.833    16.875    13.796    13.909
- Direct employment (no.)
Market destination – local (%)                            neglig.   neglig.   neglig.   neglig.
Market destination – mainland (%)                             95        95        95        95
Market destination – overseas                                   5         5         5         5
export (%)
Value of exports (mainland &                              13.833    16.875    13.796    13.909
overseas) ($m)
Source: DPIF 1996; DPIWE Industry surveys


Opportunities
There are a number of opportunities available for Tasmania’s vegetable industries.
   Better utilisation of the shallow marginal soils to increase economies of scale, giving
   potential to all of the State’s agricultural areas.
   Development of market opportunities in South East Asia and China.
   Increasing use of centre pivot irrigation and continuing the commitment from growers to
   adopt new technology, particularly in the area of water development.
   Continued development of sustainable water resources, particularly through the Water
   Development Plan for Tasmania, which is highlighting opportunities for further water
   development.

Challenges
It is recognised that continually improving efficiency is important for Tasmania to be able to
compete with vegetable imports. It is also important to be able to take advantage of the
emerging export opportunities in Asian countries, where there are long-term trends to
greater use of packaged and processed foods, including vegetables.

In order to take advantage of all market opportunities, good communication is required to
ensure information on the latest research is available to growers, so that improved


Department of Primary Industries, Water and Environment                                           Page 129
Other processed vegetables industry




management and farming practices can be implemented by farmers. The role of on-farm
environmental management systems will be of particular significance during the next few
years. The adoption of Integrated Pest Management practices will also be important in
improving efficiency of production and reduction of chemical use.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 6421 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

John Rich                                                 Tasmanian Institute of Agricultural Research
TFGA Vegetable Council Executive Officer                  GPO Box 252-98
PO Box 193                                                Hobart, Tasmania 7001
Launceston, Tasmania, 7250                                Ph: 03 6226 6280 Fax: 03 6226 7450
Ph: 03 6332 1800 Fax: 03 6331 4344                        Email: Gwen.Dumigan@utas.edu.au
Email: john_rich@bigpond.com                              Web: www.tiar.tas.edu.au
Web: www.tfga.com.au
Simplot Australia Pty Ltd                                 McCain Foods (Aust) Pty Ltd
Main Road                                                 Gibson St
Quoiba, Devonport, Tasmania, 7310                         Smithton, Tasmania, 7330
Ph: 03 6422 6400 Freecall:1800 061 279                    Ph: 03 6452 1321 Freecall:1800 065 521




Department of Primary Industries, Water and Environment                                        Page 130
Onions industry




ONIONS
Introduction
Onions are the second most valuable vegetable crop in terms of contribution to the
Tasmanian economy. Onions were first exported from Tasmania in 1971, but up until about
1987, the industry was relatively small, producing 20,000 to 30,000 tonnes a year. Prior to
the first exports, the industry in Tasmania was virtually non-existent. There followed a
period of rapid expansion as export markets were developed, and the State produced up to
a peak of 90,000 tonnes in 1996. This substantially declined in the following year and
currently varies between 50,000 and 60,000 tonnes each year.

As with the majority of vegetable production in Tasmania, onion production is dependent on
reliable water supplies to support summer irrigation. The climate of Tasmania is such that it
is usually possible to achieve good result with in-field curing after harvest. This allows a
production cost advantage compared to regions which require artificial curing (e.g. Europe),
but can create quality problems in years of higher than normal summer rainfall.

Onions may be sown in either autumn or spring, with harvest in January/February. Grading
and packing through the numerous packing operations starts in January, peaks from
February through April, and continues using stored product until about September.

The industry relies heavily on exports. Brown onions (the main type grown) are shipped
mainly to the Northern Hemisphere. The principal markets are in the UK, Continental Europe
and Asia. Production of red onions for export to Europe is increasing. Transport costs impact
heavily on the returns available to the grower, with shipping costs accounting for about
35% of the gross return per tonne of onions shipped.

Most packing and exporting operations are involved with quality assurance programs to
varying degrees. The programs relevant to the Tasmanian industry include ISO 9000,
SQF2000, Tesco Nature’s Choice, Woolworth’s Quality Vendor Scheme and JUSCO (the
Japanese supermarket quality assurance system).

Significant production regions exist in all states of Australia, however the major Australian
production states are South Australia and Tasmania, each producing about 25% of the
national crop. Onions are available all year round, but the main harvest period commences
from August in Queensland and extends through to April in the southern states.

Industry structure
Production sector
Most onion production occurs on the red ferrosol soils in the north-west, and similarly fertile
soils in the north-east of the State. Production has also expanded into the light soils of the
northern Midlands in recent years. Onions are grown in rotation with other vegetables on
mixed cropping enterprises, rather than on specialised farms. An average vegetable farm is
usually owner operated and about 100 hectares in size.

Onions may be sown in either autumn or spring, and harvested in January/February.
Grading and packing starts in January, peaks from February through April, and continues
using stored product until about September.

About 130 growers are involved in onion production in Tasmania. Most of the sowing,
harvesting and cartage at harvest time is done by contractors. In some cases, the exporting
company provides sowing and harvesting services from within its own workforce, or
contracts external operators to perform those jobs on its behalf.

The industry is served by an extensive agronomic consulting sector, in addition to the field
officer service provided by some of the larger packer/exporters.




Department of Primary Industries, Water and Environment                                 Page 131
Onions industry




The State’s onion production has contracted from a 1,600 hectare high in 1995/96 to
currently around 1,000 hectares. The reduction in area has been for a variety of reasons,
both local and market.

Processing sector
Tasmania has a number of onion packing and exporting enterprises, of which the largest
number and largest in volume are located in the region surrounding Devonport. The largest
onion packer is Field Fresh Tasmania, owned by Webster Ltd., and accounts for
approximately 55% of Tasmanian production and 60% of exports. A number of other
smaller operations range in production from a few thousand to 15,000 tonnes per year.

Markets
The State produces about a quarter of the national onion crop, and is currently responsible
for around 85% of Australian onion exports. There are dedicated suppliers to the domestic
market, mostly comprising smaller packing sheds operated by growers or grower groups.
Second grade onions are used by local vegetable processors, such as Simplot and McCains.
The value of onions has increased in recent years which has helped to maintain the industry
in the face of declining export volumes after the peak in 1995/96.

In terms of value, Germany is the
largest importer of Tasmanian onions,
followed by the UK. The demand for
onions in Europe has historically been
strong, although in 1996/97, and
again in 1999/00, the quantity
exported to the European Union
dropped substantially due to
competition from stored European
product and other exporters. Japan is
the largest Asian market, with
significant exports also going to
Singapore, Malaysia, Indonesia and
Hong Kong.

The major competitors to Tasmania                       Flowering onion crop
are other Southern Hemisphere
producers (New Zealand, Chile, South Africa) with China as an emerging supplier in Asia.
Tasmanian production is about 30% of New Zealand’s total production.

Markets tend to be arranged in advance of the sowing season by each exporter, who then
contracts with growers for the projected tonnage.

Onions are no longer simply a staple commodity, and consumers are becoming interested in
new varieties, providing possible new market opportunities for the Tasmanian industry.

Infrastructure
All sectors of the industry are represented on the Tasmanian Onion Industry Panel that was
set up in 1981 to investigate and improve all aspects of the industry.

Each packer/exporter has their own storage, grading and packing facilities, which
represents a substantial capital investment. There is little scope to share facilities, as all
operators face their peak production season at the same time.

The industry relies heavily on road transport to move raw product from the paddock to the
packing operations, and again to move packed product to ports for loading onto export
shipping vessels.




Department of Primary Industries, Water and Environment                                    Page 132
Onions industry




Government inputs and involvement
Regulation
Onions intended for export overseas must satisfy the standards laid down under the
Commonwealth’s Export Control Act 1982. Australian Quarantine Inspection Service
inspectors make regular visits to all packing sheds to inspect random selections of bagged
onions.

Research, development and extension
DPIWE and the Tasmanian Institute of Agricultural Research have significant involvement in
the Tasmanian onion industry, while a number of private research and development
providers are also involved with the industry.

Current research and development work being undertaken by the range of organisations
involved includes:
   studies of the epidemiology of Botrytis spp. associated with neck rot of onion;
   the development an integrated botrytis management program;
   the effect of leaf damage from herbicides and wetters on susceptibility to fungal
   diseases;
   weed control in onions; and
   studies of onion seed production to improve seed quality.

The national industry has recently become a levy payer to Horticulture Australia Limited,
which provides for the collection of a research and development levy from growers, which is
then be matched by a Commonwealth Government contribution. This will substantially
increase the level of funding available for industry related research and development.

Industry value
                                                    91/92     97/98    98/99    99/00    00/01    01/02
Production
- Area covered (ha)                                   1,500    1,017    1,200    1,100      770    1,000
- Number of growers                                                     c.100    c.100      107      129
- Direct employment (no.)                                                        c.325    c.250    c.350
- Product quantity (tonnes)                          73,400   51,945   63,200   57,500   38,900   53,900
- Product ‘farm gate’ value ($m)                       22.1              9.85     8.60     6.00     8.10
Processing and distribution
(wholesale)
- Number of operators                                     5
- Product value ($m)
- Direct employment (no.)
Market destination – local (%)                                             4        6        7        6
Market destination – mainland (%)                                         11       22       19       11
Market destination – overseas export (%)                                  85       72       74       83
Value of exports (mainland &
overseas) ($m)
Source: DPIF 1996; DPIWE industry surveys.


Opportunities
Changing international consumer trends are considered to be creating further opportunities
for the Australian onion industry, provided that it is able to meet shifts in demand for
different varieties and meet increasing market specifications.

A major objective for the industry is to maintain market share against the competition from
other Southern Hemisphere and European producers. There is increasing interest in red
onions, and although the volumes currently exported from Tasmania are small, rapid growth
is anticipated.




Department of Primary Industries, Water and Environment                                              Page 133
Onions industry




Challenges
A major challenge for the onion industry is access to areas of suitable land with adequate
irrigation water. The industry is also subject to intense international competition in the
market place. Tasmania currently holds its markets on the basis of price and quality.
Industry representatives believe that it is essential for Tasmanian producers to implement
practical environmental management systems to ensure retention of access to markets such
as Europe and Japan, and Government has been actively working with industry to assist in
the process.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 642 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Australian Onion Industry Association Inc.
PO Box 193                                                PO Box 1459
Launceston, Tasmania, 7250                                Murray Bridge, South Australia, 5253
Ph: 03 6331 6377 Fax: 03 6331 4344                        Phone: 08 8531 1577 Fax: 08 8532 1789
Web: www.tfga.com.au
Field Fresh Tasmania                                      Harvest Moon
PO Box 1283                                               288 Leith Rd
Devonport, Tasmania, 7310                                 Forth, Tasmania, 7310
Ph: 03 6428 3555 Fax: 03 6428 3544                        Ph: 03 6428 2505 Fax: 03 6428
Web: www.fieldfresh.com.au                                Email: info@harvestmoon.com.au
Premium Fresh Tasmania                                    G. A. & D. R. Moore
PO Box 693                                                70 Jetsons Rd
Devonport, Tasmania, 7310                                 Scottsdale, Tasmania, 7260
Ph: 03 6428 2253 Fax: 03 6428 5200                        Ph: 03 6352 2978 Fax: 03 6352 2734
Email: ertler@premiumfresh.com.au




Department of Primary Industries, Water and Environment                                        Page 134
Other fresh vegetables industry




OTHER FRESH VEGETABLES
Introduction
The fresh vegetable market in Tasmania is relatively small, because it has traditionally
supplied a market of less than half a million people. While Tasmania has been a major
supplier of fresh potatoes to Melbourne and Sydney markets in the past, the fresh vegetable
industry has relied almost solely on the local market and has been fairly static, with some
vegetable lines fluctuating little from year to year. The onion industry is an important
exception to this, and is treated in a separate profile.

One of the more important changes to affect the industry has been the recent growth in
export markets, with the industry’s capacity to service interstate and South East Asian
markets with rapid and frequent transport being a major factor in this growth. These
growing market sectors are important as the vegetable industry is always looking for
options to diversify from its dependence on the processing sector.

Apart from onions and fresh market potatoes, the major fresh vegetables produced in
Tasmania are carrots and broccoli. Other crops sold on the domestic fresh market include
broad beans, French beans, runner beans, cauliflowers, green peas, tomatoes, lettuce,
parsnips, Swede turnips and cabbages.

Annual Tasmanian production of carrots is about 35,000 tonnes, of which 20,000 tonnes are
processed and 15,000 tonnes sold fresh. Carrots are grown in all states of Australia, with
Tasmania growing very high quality produce. The New Zealand industry produces about
95,000 tonnes per year, of which about 75% is sold in domestic and export fresh markets.

Broccoli is produced for both processing and fresh markets. There are a number of packers
operating in the State, each handling
tonnages ranging from 200–1,500 tonnes
each year. Total fresh market production
is estimated to be 3,000–4,000 tonnes per
year.

Swedes and pumpkins are also grown and
sold in both domestic and export markets.
Amounts range up to about 1,500 tonnes
per year.

Fresh vegetable production comprises
about 25% of the total gross value of
Tasmanian vegetable production.

Industry structure                                        Carrots are one of the main fresh vegetables produced
                                                                               in Tasmania
Production sector
The majority of the production occurs on the red ferrosol soils in the north-west and
similarly fertile soils in north-east of the State, which are the same areas that are the basis
of the processed vegetable sector. Production has also expanded into the light soils of the
northern Midlands in recent years. Brassicas and carrots are grown for most of the year,
although there is a distinct peak of activity during summer and autumn. The industry is
dependent on reliable water supplies to support summer irrigation. Tasmania’s climate
allows the production of heat sensitive vegetables, such as lettuce and celery, to supply
market gaps in mainland states during summer. Depending on the crop, planting and
harvesting can take place all year round, but there is a seasonal peak of activity in summer
and autumn.

A number of crops such as cauliflower, carrots, green beans, broccoli and sweet corn are
grown for both fresh and processing industry sectors. The majority of fresh vegetables are



Department of Primary Industries, Water and Environment                                             Page 135
Other fresh vegetables industry




grown on specialised vegetable farms and close to the packing/exporting facilities. Some
vegetables are also grown on dairying and grazing properties. Significant quantities of
surplus produce from crops being grown under contract to processors, packers, or exporters
are put into the fresh market.

Many of the fresh vegetable crops are manually harvested, so the industry provides
considerable seasonal casual employment, particularly in the north-west, north-east and
northern Midlands regions. The direct and indirect employment in the vegetable growing or
ancillary industries are difficult to determine. Farms are typically owned by the operators
who make use of family labour as well as employing casual labour, especially for planting
and harvesting.

In recent years there has been a tendency for various cultivating and harvesting operations
to be carried out by contractors, thus overcoming the need for additional labour to be
employed. Nonetheless, the current expansion in fresh vegetable production could see an
increase in at least the seasonal casual employment offered by the industry, both on farms
for harvesting and downstream by pre-packers and marketers.

Contractual agreements are now becoming more common between growers and retailers.
Some of the larger fresh market wholesalers who service the State’s major retailers also
buy direct from growers.

Processing sector
The major fresh vegetable packing operations are located close to the intensive production
areas in the north-west, with other packers in the north-east. There are five major
operations, but also a number of smaller enterprises, many of which are farm based or have
expanded from farm growing operations.

There are also numerous growers who have on-farm facilities for cleaning, grading and
packing a range of fresh vegetables.

Markets
There is increasing interest in the export of fresh
vegetables interstate and overseas. The major
overseas destination is Asia, with Japan, Singapore,
Hong Kong and Taiwan representing the major growth
segments of the market. Improved and more frequent
transport has also increased the opportunities in
mainland markets, such as Melbourne and Sydney.
Major competitors of Tasmania include the intensive
vegetable growing areas of Queensland and Victoria,
and, for some products, New Zealand.

With the expansion of the fresh vegetable export
industry, a contract system between growers and
exporters has developed. Contracts have become
increasingly necessary due to the strict requirements
of overseas markets regarding such aspects as
quality, variety and consistency. Australian
supermarkets are now adopting quality assurance and       Supplying fresh vegetables such as tomatoes
will require all of their suppliers to implement          to domestic and export markets is becoming
externally audited Hazard Analysis and Critical Control              increasingly important
Point (HACCP) based schemes.

There has been a trend towards the sale of fresh cut produce in an attempt to gain market
share from the fast food industry. Vegetables are being packaged as pre-cut salads to




Department of Primary Industries, Water and Environment                                Page 136
Other fresh vegetables industry




increase their convenience. Other products being marketed include fresh soup and fresh
uncooked pizza that can be easily and quickly prepared in the home.

Asia has absorbed increased exports of most agricultural produce in recent years and
presents considerable opportunities in the medium to long-term for exports of high quality
fresh vegetables. Carrots and squash are the main fresh products exported.

Value of carrot exports ($m)
Destination                       99/00         00/01     01/02
Hong Kong                            0.50          0.46      0.55
Indonesia                            0.02             -      0.02
Japan                                1.80          2.32      1.14
Malaysia                             0.02          0.01      0.05
Singapore                            0.38          0.21      0.13
Taiwan                               0.06          0.18      0.09
Thailand                                -          0.02      0.11
United Kingdom                       0.04          0.05      0.07
(Other Countries)                    0.01          0.04      0.01
Total                                2.84          3.29      2.16
Source: Department of Economic Development 2003


Infrastructure
The production side of the industry is represented by the Australian Vegetable and Potato
Growers Federation, which comprises grower associations from every state. The Australian
United Fresh Fruit and Vegetables Association represents packers, wholesalers and
exporters.

Each packer/exporter has their own grading and packing facilities, which represents a
substantial capital investment. There is little scope to share facilities, as all operators face
their peak production season at the same time.

The industry relies heavily on road transport to move raw product from the paddock to the
packing operations, and again to move packed product to markets or to port for shipping.

This industry, like many others, depends on the Federal Government’s Tasmanian Freight
Equalisation Scheme (introduced in 1976) to offset Bass Strait shipping costs to interstate
markets. This assistance ensures that Tasmanian growers and exporters are able to
compete with their mainland counterparts.

Government inputs and involvement
Regulation
Produce intended for export overseas must satisfy the standards laid down under the
Commonwealth’s Export Control Act 1982. There are also a range of quarantine
requirements for products entering and leaving the State.

Research, development and extension
The main direct involvement of the Commonwealth Government is through Horticulture
Australia Limited (HAL). HAL collects a levy of 0.5% of the gross product value at the first
point of sale, and this is matched by the Commonwealth Government to fund research and
development in the industry and to encourage and facilitate export marketing. All
vegetables are included in the levy except potatoes, fresh and processing tomatoes, onions,
garlic, melons, asparagus and mushrooms, all of which have their own levy arrangements.

DPIWE and the Tasmanian Institute of Agricultural Research have significant involvement in
the Tasmanian fresh vegetable industry, while a number of private research and
development providers are also involved with the industry. DPIWE provides industry
development, quality assurance, marketing and economic services to industry through
partnership agreements, as well as policy advice to Government.


Department of Primary Industries, Water and Environment                                    Page 137
Other fresh vegetables industry




Current research and development work being undertaken by the range of organisations
involved includes:
   investigations into the causes of carrot splitting;
   the effect of seed grading on size uniformity in carrots;
   nematode control in carrots;
   broccoli physiology;
   improving shelf life of pre-cut lettuce;
   the use of plant defence boosters to reduce the incidence of lettuce big vein virus;
   weed management in carrots, brassicas and other vegetables;
   minor use residue trials; and
   management of diamond back moth in brassicas.

The Department of Economic Development can also assist with marketing and exporting.

Industry value
These figures cover the carrot, broccoli, swedes and kabocha industries. With a large
number of small operators, it is difficult to get accurate figures. The following are
approximations from industry surveys conducted by DPIWE.

                                              91/92       97/98   98/99      99/00    00/01     01/02
Production
- Area covered (ha)                                                             730      780       860
- Number of growers                                                              90      120       135
- Direct employment (no.)                                                       260      270       320
- Product quantity (‘000 tonnes)                                                 28       30      32.5
- Product ‘farm gate’ value ($m)                 c.4.0               c.6.0      5.5      6.2       6.7
Processing and distribution
(wholesale)
- Number of operators
- Product value ($m)                                                             16        19       18
- Direct employment (no.)
Market destination – local (%)                                                   27        26       23
Market destination – mainland (%)                                                53        53       55
Market destination – overseas                                                    20        21       22
export (%)
Value of exports (mainland &                                                     12        15       14
overseas) ($m)
Note: All figures are approximate values only.
Source: DPIWE industry surveys


Opportunities
Most industry representatives see limited
opportunities for growth in existing markets.
Additional export markets need to be
developed, particularly in Asia. There are
opportunities for downstream processing of
fresh products, such as fresh cuts.

Continued development of integrated pest
management and minimal chemical input
production practices are helping to reduce
production costs and ensure an increase in
product quality.

                                                                  Tasmania is becoming increasingly known
                                                                  for the production of high quality produce




Department of Primary Industries, Water and Environment                                                  Page 138
Other fresh vegetables industry




Challenges
Industry representatives believe that it is essential for Tasmanian producers to implement
practical environmental management systems to ensure retention of access to markets such
as Europe and Japan, and Government has been actively working with industry to assist in
the process.

Another major challenge for the fresh vegetable industry is access to areas of suitable land
with adequate irrigation water.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 642 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Tasmanian Institute of Agricultural Research
PO Box 193                                                GPO Box 252-98
Launceston, Tasmania, 7250                                Hobart, Tasmania 7001
Ph: 03 6331 6377 Fax: 03 6331 4344                        Ph: 03 6226 6280 Fax: 03 6226 7450
Web: www.tfga.com.au                                      Email: Gwen.Dumigan@utas.edu.au
                                                          Web: www.tiar.tas.edu.au
Field Fresh Tasmania                                      Harvest Moon
PO Box 1283                                               288 Leith Rd
Devonport, Tasmania, 7310                                 Forth, Tasmania, 7310
Ph: 03 6428 3555 Fax: 03 6428 3544                        Ph: 03 6428 2505 Fax: 03 6428
Web: www.fieldfresh.com.au                                Email: info@harvestmoon.com.au
Premium Fresh Tasmania                                    G. A. & D. R. Moore
PO Box 693                                                70 Jetsons Rd
Devonport, Tasmania, 7310                                 Scottsdale, Tasmania, 7260
Ph: 03 6428 2253 Fax: 03 6428 5200                        Ph: 03 6352 2978 Fax: 03 6352 2734
Email: ertler@premiumfresh.com.au
Australian United Fresh Fruit and Vegetable
      Association
PO Box 82
Flemington, New South Wales, 2129
Ph: 02 9763 1767 Fax 02 9746 3008
Email: auffpw.iaccess.com.au




Department of Primary Industries, Water and Environment                                        Page 139
Vegetable seed production industry




VEGETABLE SEED PRODUCTION
Introduction
Vegetable seed crops are grown in Tasmania for the export market (mainly Northern
Hemisphere outlets) and for Tasmanian and Australian mainland states’ vegetable industry
requirements. Formerly, small quantities of vegetable seeds were grown in the Scottsdale
district for the Australian market. In more recent years, the advantages of Tasmania as a
climatically suitable ‘out of season’ producer for Northern Hemisphere markets has been
recognised by several seed companies.

The major crop types include brassicas, especially hybrid cabbage and cauliflower, root
crops such as potato, carrot and parsnip, onions, and leaf crops such as spinach and silver
beet. There has been virtually no pea and bean seed production in Tasmania in recent
years. Onion seeds are grown mainly for the Tasmanian vegetable industry, and their
production is assured, at least at current levels, because the relevant companies seek to
have a degree of control over the availability and quality of their seed requirements.

Seed potato production is covered in the separate Potato Industry profile.

Good quality, reliable production is seen as an important requirement for the export trade.
Seed is a high value, low volume commodity and can therefore be competitive despite
freight costs. In all seed production systems, quality assurance and a high quality product
are important components.

Industry structure
Production sector
Vegetable seed production is usually a small part of a grazing or mixed farming enterprise.
Vegetable seeds are grown in the Coal River Valley, Derwent Valley, central east coast,
Hagley/Westbury and Devonport regions. Yields vary between 300–500kg/ha for carrot and
100–200kg/ha for the brassica crops. Individual crop areas are small (1–2ha) and between
50 and 100 growers are involved in this industry.

Brassica crops are divided into high value autumn planted hybrid types, such as cabbage
and cauliflower, and lower value spring crops of mustard and Chinese vegetable types.

Production locations for the high value hybrid crops are controlled by the need to have an
isolation zone of 1.5–3 kilometres from another crop of the same botanical family. At this
stage, seed companies are generally located in different areas of the State. Where two or
more companies are contracting similar crop types in the same area, grower awareness and
consultation between the companies have maintained adequate isolation distances.

Cultural and harvesting advice is provided by the contracting companies or their agents.
Crops are usually well grown and there are no major production problems.

Field Fresh Tasmania contracts for the production of the majority of its onion seed
requirements in the Derwent Valley. The following companies contract for the production of
seed, predominantly for export to other areas of Australia or international markets:
    South Pacific Seeds - Coal River Valley, Hagley/Westbury
    Bejo Seeds - Coal River Valley, Derwent Valley, east coast
    Henderson Seeds (Serve-Ag) - Devonport area, east coast
    Yates Seeds - Coal River Valley, Derwent Valley

South Pacific Seeds, Henderson and Yates are major Australian seed companies with their
own breeding, production and sales operations. Vegetable seed production in Tasmania
complements their other seed production areas in Australia. Bejo Seeds is a European
company.




Department of Primary Industries, Water and Environment                              Page 140
      Vegetable seed production industry




      Processing sector
      There is only limited downstream processing of this product.

      Markets
      Most of the onion seed is used in Tasmania’s local industry. The current level of production
                                            is expected to remain relatively stable. There appears
                                            to be no major export market for onion seed.

                                                         The other vegetable seed types are usually sold to
                                                         European and Japanese markets to supplement their
                                                         production needs ‘out of season’. This does cause
                                                         problems in the planning of production in Tasmania.
                                                         Normally, Northern Hemisphere seed crops are
                                                         harvested during August/September, and cleaned and
                                                         quality tested during October/November. Hence
                                                         production requirements from Tasmania are not
                                                         known until November/December. As the sowing time
                                                         for most brassica crops in Tasmania is
                                                         December/January, there is usually very little time to
                                                         plan for the production of these crops.

                                                         However, despite the difficulties in planning, the
                                                         production of high value vegetable seed crops
 Quality assurance is crucial to ensuring the            appears to be relatively secure and is expected to
production of high quality seed for a range of
                                                         expand at a steady rate in the foreseeable future.
       vegetables, such as cauliflower



      Infrastructure
      There is very limited coordination between the major seed producing contractors in
      Tasmania, beyond what is required to maintain isolation distances. Similarly, there is
      presently no grower infrastructure, probably because seed production is a relatively minor
      component of mixed farming enterprises.

      Contracting companies at this stage do not see a need for any formal industry structure
      such as an industry panel, although an industry group with respect to seed production of
      cruciferous species (e.g. cabbage, cauliflower) now exists. The desire by overseas
      customers for strict confidentiality in regard to the type and quantity of seed produced and
      the production techniques involved, also has a bearing on the absence of any formal
      industry structure at this stage. With industry expansion, there may need to be more
      cooperation in site selection, crop rotation and pest and disease control measures. At this
      stage, the Tasmanian industry as a whole is yet to mature and form cooperative strategies.

      Government inputs and involvement
      Regulation
      Produce intended for export overseas must satisfy the standards laid down under the
      Commonwealth’s Export Control Act 1982. There are also a range of quarantine
      requirements for products entering and leaving the State.

      Research, development and extension
      The industry is generally self-supporting and relatively efficient. The seed companies
      generally provide advice to growers on the production of seed crops. Seed quality
      assessment and crop health certification are the two major areas of DPIWE involvement
      with these crops. Disease identification and advice on control measures are also important
      DPIWE inputs. This involvement is expected to continue and probably increase in the future.
      There may also be an opportunity for DPIWE to further assist in promoting hygiene
      practices to seed growers.


      Department of Primary Industries, Water and Environment                                           Page 141
Vegetable seed production industry




Industry value
Accurate production and economic data is difficult to obtain because of the wide range of
crops grown and the desire of overseas customers for confidentiality. Some 50 to 100
growers are involved in seed production, but there is only limited downstream processing of
this product. The ABS report on the data they receive from respondents to their surveys and
censuses, but the ABS is not always able to capture all producers of vegetable seed.

Gross value of vegetable seed production, 1997–2001
                               1997               1998            1999              2000            2001
peas (ha)                         157.7              175.8               29.4              16.3             52.8
peas (t)                          389.2              434.2                n/a               n/a             69.6
peas ($m)                           0.1                0.2                0.0               n/a             0.07

onions (ha)                           30.1                  7.7          22.3              40.9             47.4
onions (t)                            13.6                  5.1          16.1              18.7             12.9
onions ($m)                            0.1                  0.1           0.4               0.4              0.3

cauliflower (ha)                      26.4                 54.2          68.1              82.5             96.8
cauliflower (t)                        4.2                 21.3          14.0              18.0             13.3
cauliflower ($m)                       0.0                  0.4           0.3               0.4              0.7

cabbages (ha)                           n/a                 n/a           n/a            144.0             150.1
cabbages (t)                            n/a                 n/a           n/a             44.5              51.0
cabbages ($m)                           n/a                 n/a           n/a              0.5               0.5

other (ha)                            70.2                189.3      201.1                 65.9              n/a
other (t)                             41.4                 98.6       59.6                  n/a              n/a
other ($m)                             0.6                  2.2        1.4                  0.5              0.3
Source: ABS 2003a

Industry value
                                              1991         1996   1997      1998        1999      2000      2001
Production
- Area covered (ha)                                                284.4        427.0    320.9     349.6     347.1
- Number of growers                                                                                         50–100
- Direct employment (no.)
- Product quantity (tonnes)                                        448.2        559.1      89.7     81.2     146.9
- Product gross value ($m)                       c.1.5               0.9          2.9       2.0      1.8       2.5
Processing and distribution
(wholesale)
- Number of operators
- Product value ($m)
- Direct employment (no.)
Market destination – local (%)
Market destination – mainland (%)
Market destination – overseas
export (%)
Value of exports (mainland &
overseas) ($m)
Source: ABS 2003a


Opportunities
This industry should remain relatively stable with potential for moderate increases in
production. Major increases are unlikely due to the need for strict crop rotation, a large
isolation zone of 1.5 kilometres between crops, and a generally frost free environment.
Limited markets for seed will also constrain industry expansion. Industry growth can be
fostered by the maintenance of yield, quality and reliability and by maintaining an
environment free of significant diseases.




Department of Primary Industries, Water and Environment                                                     Page 142
Vegetable seed production industry




Challenges
The major challenges include maintaining a high level of quality control, and the
development of Northern Hemisphere markets to allow greater forward planning for crop
production.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 642 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Field Fresh Tasmania
PO Box 193                                                PO Box 1283
Launceston, Tasmania, 7250                                Devonport, Tasmania, 7310
Ph: 03 6331 6377 Fax: 03 6331 4344                        Ph: 03 6428 3555 Fax: 03 6428 3544
Web: www.tfga.com.au                                      Web: www.fieldfresh.com.au




Department of Primary Industries, Water and Environment                                        Page 143
        Emerging and other vegetable crops industry




        EMERGING AND OTHER VEGETABLE CROPS
        Introduction
        Several vegetable, medicinal and other allied crops that may have potential for export or
        domestic marketing in the medium to long-term are being investigated in Tasmania.
        However, the prospects of most are dependent on international market trends. Japan has
        emerged as an important market for some Tasmanian produce as Tasmania’s freedom from
        fruit fly and tobacco blue mould gives Tasmania an advantage over mainland states.
        Tasmania enjoys a particularly good reputation for quality and clean/healthy produce in
        Japan. Major market opportunities also exist for Tasmanian produce in other Asian markets.

        There is an established mushroom industry in the State, with two operators meeting a
        substantial proportion of the local demand. There are also investigations of a number of
        other edible fungi, which may have export potential. For example trials and plantings for
        oyster fungus, shitake and truffles are progressing on their culturing requirements, with
        early commercial crops indicating significant potential.

                                               Kabocha (buttercup squash) is produced and exported from
                                               the north of Tasmania although production has varied
                                               annually. It is regularly exported into mainland markets and in
                                               varying quantities overseas depending on demand and price.
                                               New Zealand is the major competitor, and because of the
                                               dollar differential in New Zealand’s favour it is necessary for
                                               Tasmania to produce a very high quality product to enter a
                                               niche at the top end of the market. There may be potential for
                                               up to 10,000 tonnes of buttercup squash to be exported
                                               annually from Tasmania.

                                        Trials growing a range of crops such as white radish (daikon),
                                        hot Japanese radish and small fresh onions have been
      There are significant export
 opportunities for high quality kabocha
                                        successful, but export market opportunities are limited due to
to both mainland and overseas markets   variable and low prices or small market segments. This
                                        appears to be an area where success is likely to be limited to
         a market garden operation, in which efficient growers will do well selling some well
         established niche crops (like coriander and rocket) on the fresh local market, but without
         large expansion opportunities. Trials with hot Japanese radish into Japan are showing
         promise for an ongoing niche market.

        A significant pre-pack leafy salad vegetable enterprise is expanding rapidly in southern
        Tasmania and supplying major supermarket chains.

        Where new vegetable crops have larger volume potential they tend to be produced by the
        larger packer exporters as another enterprise to maximise their use of existing washing,
        grading, packing and transport infrastructure. Crops that remain as small area and volume
        products remain the domain of niche or boutique producers.

        The potential for a range of medicinal crops is being examined, with strategic partnerships
        being developed between Tasmanian production companies and pharmaceutical and herbal
        manufacturers.

        In vegetables, as in the fruit and floriculture sector, there is a considerable potential for
        organic production. The organic market continues to grow, both domestically and in
        important export markets such as Japan and Singapore. There has been important progress
        in recent years in the setting of credible and accepted certification systems for organic
        produce. The State’s already established ‘clean green’ reputation offers significant
        advantages in developing this sector. In vegetables, organic production remains mainly on a
        market garden scale, but the route to larger scale production is being considered. (See
        separate Organics Industry Profile for further information.)



        Department of Primary Industries, Water and Environment                                       Page 144
Emerging and other vegetable crops industry




The Japanese market also offers potential for other crop exports including large-seeded
broad beans, whole beans, radicchio, green vegetable soybeans, celeriac, specialty onions
and sweetcorn. Commercial production of shallots has been underway for a number of
seasons by Field Fresh Tasmania for local and export markets.

Greenhouse Vegetables
The production of all greenhouse vegetables such as tomato, cucumbers and capsicum are
slowly expanding in Tasmania. In recent years in all regions of Tasmania there has been a
small expansion of new greenhouses using environmental control technology with some
older structures going out of production. Tomato production has expanded mainly as a
result of better structures giving better yields, and cherry tomato production has
significantly increased. Greenhouse capsicums are now grown on a commercial scale. The
capsicums are being sold on local and interstate markets and a trial with a Japanese buyer
was conducted in the 2002/03 season. There is also a regular and increasing demand for
cucumbers.

Greenhouse vegetable production occurs Statewide and targets spring and autumn supply.
There were 25 operators in Tasmania in 2002 with total greenhouse area of 10 hectares and
producing 1,500 tonnes of tomatoes. The farm gate value was estimated at $2 million. They
are all small family operations and employ the equivalent of 60 full-time employees.
Additional casual labour is employed during harvest, for plant training and other major
operations.

Grading and packing are on-site and supermarket suppliers are required to produce to a
Quality Assurance scheme. Almost all greenhouse production (98%) is for the local market
supplying the major supermarkets. A small quantity goes to corner stores and door sales.
Local tomatoes and cucumbers account for about 50% of the annual Tasmanian
consumption. Local capsicums supply a lesser proportion of local demand.

Most full-time growers belong to the Tasmanian Greenhouse Tomato & Vegetable Growers
Association but apart from bulk purchase of cartons operate independently. As greenhouse
tomatoes are not part of a National Vegetable Levy this sector does not attract research and
development support funds. State growers are keen to join with other states to institute
such a scheme.

Mushrooms and other fungi
The basis of this industry is Agaricus bisporus, once a wild fungus, but now internationally
recognised by consumers in all its different sizes, packs and in both white and brown forms.
In 1997 the value of Australian specialty mushroom production was $3.5 million with an
estimated 250 tonnes per annum, while in 2000/01, the ABS recorded 1,214 tonnes and a
farm gate value of $5.5 million. The production and value of all specialty mushrooms is
predicted to continue increasing. In addition, imports of fresh, dried and canned mushrooms
are currently worth $13 million. These figures show that there is a significant potential to
replace these imports with domestic production and new products.

Straw, animal manures and eucalypt sawdust form the base material for different substrates
that vary for each type of mushroom and other fungi. The substrates for gourmet and
specialty mushrooms are specialised and have entailed considerable research to optimise.

The two main mushroom production companies in Tasmania are Huon Valley Mushrooms
(HVM) and Tasmanian Mushrooms. HVM commenced production in 1991 and Tasmanian
Mushrooms commenced a few years earlier than this.

In many countries the past few years have seen an increase in the consumption of both
cultivated and wild mushrooms. In 1979, Agaricus bisporus production accounted for over
70% of mushroom production. By 1999 this had dropped to 30% without any decrease in
production of A. bisporus, as the demand for specialty mushrooms had increased so much.



Department of Primary Industries, Water and Environment                             Page 145
Emerging and other vegetable crops industry




Members of the catering and retail industries in Australia indicate there is an increasing
interest amongst consumers for different varieties of mushrooms. The wholesale price of
commercially grown specialty mushrooms is $20–35 per kilogram dependent upon the
species.

Specialty mushrooms currently cultivated in Australia and available in the market place are:
Auricularia judea (Jew’s ear, black velvet), Lentinula edodes (shiitake), Pleurotus
citrinopileatus (yellow pleurotus), Pleurotus ostreatus (grey oyster), Lyophyllum shimeji
(shimeji). All of these fungi are cultivated by Huon Valley Mushrooms who grows the widest
range of specialty mushrooms in Australia. HVM future projections are that they will be
supplying $5 million specialty mushrooms to market. This will make them the largest
supplier of specialty mushrooms in Australia.

The State’s mushroom industry has two sectors, very distinct in size and characteristics. By
far the larger produces white mushrooms for the domestic retail trade. Mushrooms are the
third largest vegetable crop in the country after potatoes and onions. Australia has one of
the highest levels of mushroom consumption in the world, and demand is still growing fast.

Tasmania has a competitive advantage through its clean image and the ready availability of
raw substrate materials. Due to its proximity to Asia, its multicultural population base and
existing trade links with USA, Europe and Asia, Australia is ideally situated to develop
specialty mushroom crops to satisfy both domestic and international market demands.

The Australian Mushroom Growers Association is encouraging all growers to introduce
quality assurance programs to farms, and Tasmanian producers are in the process of doing
so.

Four major research projects have been undertaken by the Tasmanian Institute of
Agricultural Research, in conjunction with industry partner, Huon Valley Mushrooms. These
have been supported by the funding bodies Rural Industries Research and Development
Corporation, Horticulture Australia Limited or the Commonwealth Department of Industry,
Tourism and Resources. The projects identified eucalypt sawdust as a suitable substrate for
the cultivation of maitake mushrooms, and initiated research to identify substrates for morel
mushroom production.
Truffle production is also expanding at a number of locations in Tasmania. There are three
companies offering the opportunity for farmers and others to invest in truffle growing.
Perigord Truffles of Tasmania has 30 sites growing French truffles in Tasmania in joint
venture, covering an area of 70 hectares. Truffles from the first planting were harvested at
Deloraine in June 2000. Tasmanian Truffle Enterprises, based at Deloraine, currently has
27 hectares in cultivation. The third company was due to plant out 20 hectares in 2000. All
companies have been established to capitalise on the opportunity of supplying French black
truffles fresh into the traditional truffle markets of the world, six months out of season.
Yields, returns and quality have yet to be confirmed as the plantings mature.

Wasabi
Wasabi (or Japanese horseradish) is mainly used to produce a
condiment very popular in Japan, and to a lesser extent in Taiwan and
Korea. Development of wasabi has been ongoing for a number of
years, with work undertaken by researchers from DPIWE in partnership
with growers, and funding from the Rural Industries Research and
Development Corporation.

Wasabi paste is used with Japanese cuisine such as sushi, sashimi and
buckwheat soba noodles. The paste is prepared either freshly grated
from the stem of the wasabi plant or processed to make a prepared
paste in which wasabi is often combined with horseradish.



                                                                                Wasabi stems


Department of Primary Industries, Water and Environment                               Page 146
   Emerging and other vegetable crops industry




   Wasabi is a semi-aquatic plant, requiring cool, even temperatures in the range of 13–15°C
   and a high level of shade to produce the best quality stems. Therefore site selection is very
                                                 important and Tasmania has an advantage
                                                 over other potential production areas in
                                                 Australia. The construction of aquatic beds
                                                 and shade structures will be expensive
                                                 initially, but they are re-usable for successive
                                                 crops.

                                                 Apart from small quantities of Tasmanian
                                                 wasabi, the only other product currently
                                                 available in Australia is imported processed
 Wasabi requires a particular range of growing   wasabi. One of the attractions of wasabi lies in
conditions to ensure a very high quality product the potential to supply fresh product to the
                                                 Australian market, and to the Northern
   Hemisphere market in their winter, when prices in Japan can reach $100 per kilogram.
   There is also a wider market for wasabi in paste or puree form and this is likely to be its
   main use.

   There is now considerable knowledge of the growing requirements of the plant. Due to the
   18–24 month maturity time of wasabi, there is a long lead time to commercial production.
   There is considerable interest from a number of potential growers in developing a viable
   industry. Experience has been gained by a small number of growers in both soil and aquatic
   production. The produce from the small-scale semi-commercial production has been
   marketed in Sydney and through local Tasmanian outlets. The total area of plantings to date
   is approximately 0.4ha.

   Visits to North American and Japanese production areas have confirmed viable production
   techniques and site characteristics for suitable Tasmanian locations. Planting of up to three
   aquatic sites will occur in 2003 using tissue culture plants sourced from overseas, with the
   first commercial harvests to occur in 2005.

   Stems, petioles and leaves can all be used as fresh or processed product. There has been
   some discussions regarding the development of processed products, but until a quantity of
   material is available for trial, this aspect will progress slowly.

   Herbs and Medicinal plants
   The worldwide market for herbal medicines is estimated at $14 billion, and it is growing
   rapidly. The largest part of this market is in France and Germany. The USA is also a
   significant user of medicinal herbs and an assessment of some key herbs in this market was
   completed in early 2000 by Botanical Resources Australia with funding by the Rural
   Industries Research and Development Corporation. In Australia, herbal therapeuticals are
   increasingly moving into the pharmaceutical mainstream, though the recall of Pan
   Pharmaceutical products in May 2003 slowed Australian market development.

   In Tasmania there are processors with suitable equipment to produce extracts using a
   number of techniques. The market is restricted by the large-scale of some major world
   players, whose efficiencies and low labour costs keep prices relatively low. Opportunities are
   being identified for high quality and organic produce. The main attraction is that products
   such as essences, teas and powders have a very high value by weight, and thus are
   relatively unaffected by Tasmania’s relative distance from major markets.

   A large extracting company has planted a significant area of Echinacea and the development
   and evaluation of a number of other extract crops is also continuing. The target markets are
   mostly overseas for the larger companies who are producing raw extracts in Tasmania. The
   smaller producers generally concentrate on selling through local produce markets or health
   food shops.




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Emerging and other vegetable crops industry




The interest from the larger businesses involved in this industry is to utilise expensive
extraction equipment for a range of crops that mature over several months, or can be
short-term stored prior to extraction.

A number of small ginseng producers have been planting crop at locations across Tasmania.
The earliest established enterprises have been in operation for nearly a decade. In 2002,
the company, Heydon Park, offered investment prospectus units in a 50 hectare ginseng
plantation near Richmond in southern Tasmania.

The culinary herb sector is better established, but still tends to be grown on small, often
organic, intensively cultivated plots. There is a Tasmanian Herb Growers Association, with
an active program of field days. In all there are about 80–100 growers, though only a small
proportion grow herbs as their main enterprise. That number is growing, and a few
operators dry and at least semi-process their crop.

Industry structure
Production sector
The production of this range of vegetable crops occurs throughout Tasmania, generally on a
range of mixed enterprise farms, although mushroom production is more specific. While
some products are being trialed experimentally as part of a diversification program, others
are starting to become established at least to provide a niche market. Some are also
showing potential for significant expansion. The development of organic production systems
are also increasing, and are discussed further in the Organics Industry Profile.

Processing sector
For some of these vegetables, minimal processing is required, such as for many of the
mushroom crops that require only minimal cleaning and packing before being sold directly
to retail outlets. Other vegetable crops do require more significant processing, and are
generally utilising existing infrastructure.

Markets
While there is significant production for the local market, there is also a strong focus on
exports. Crops such as wasabi and some mushrooms have large potential in the Asian
markets, while France and Germany are seen as large markets for many herbs and
medicinal plants. European countries are also a target for Tasmania’s marketing of truffles.

The USA is also a strong potential market, and has been subject to a range of analyses of
market development. Tasmania has marketing advantages in the image for high quality,
‘clean green’ products, as well as being able to produce crops ‘out-of-season’ for the
Northern Hemisphere.

Infrastructure
There are number of industry bodies and grower groups supporting different aspects of this
part of the industry. DPIWE has also been active in promoting networking and industry
development services to assist some of the new industries develop. The Department of
Economic Development has also been assisting with industry development.

Government inputs and involvement
Regulation
There is no specific Act or regulation covering this industry, although there are quarantine
requirements for imports and exports, with exports also covered by the Commonwealth
Export Control Act 1982.




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Emerging and other vegetable crops industry




Research, development and extension
DPIWE, the Tasmanian Institute of Agricultural Research and the University of Tasmania
have all been active in various aspects of the development of many of these vegetable and
medicinal crops. Involvement has ranged from early investigation of different production
systems, to liaison and networking of industry participants, as well as aspects of marketing
and market development.

Industry value
The broad range of crops covered by this Profile make it difficult to estimate the
contribution to Tasmania, though the farm gate value could be up to $10 million, with
significant increases possible if current expansion continues.

Opportunities
    DPIWE and the Department of Economic Development will continue to assist interested
    parties and form strategic industry partnerships to identify and develop national and
    international market niches and potential new markets, and to assess the economics of
    producing, transporting and (where appropriate) processing these products locally.
    The competitive capacity of Tasmania compared with other overseas producers and
    suppliers will be continuously assessed.
    Market opportunities for both local and interstate are believed to exist for high quality
    greenhouse capsicums.

Challenges
    Constraints likely to hinder or prohibit economic development need to be identified and
    where possible removed to enhance export competitiveness and opportunities.
    A high priority must also be given to achieving consistently high quality for all
    commodities with export potential, with strong consideration given to implementing
    quality assurance programs.

Further information
Vegetable and Associated Industries Branch
Food, Agriculture and Fisheries Division, DPIWE
PO Box 303
Devonport, Tasmania, 7310
Ph: 03 642 7601 Fax: 03 6424 5142
Email: VegetableEnquiries@dpiwe.tas.gov.au
Web: www.dpiwe.tas.gov.au

Tasmanian Farmers and Graziers Association                Tasmanian Greenhouse Vegetable and
PO Box 193                                                   Tomato Growers Association
Launceston, Tasmania, 7250                                c/- Greg Jones
Ph: 03 6331 6377 Fax: 03 6331 4344                        305 Lyell Hwy
Web: www.tfga.com.au                                      Granton, Tasmania, 7031
                                                          Ph: 03 6263 6040
Australian Mushroom Growers Association                   Wasabi Growers of Tasmania
Locked Bag 3, 2 Forbes Street                             565 Racecourse Rd
Windsor, New South Wales, 2756                            Winnaleah, Tasmania, 7265
Ph: 02 4577 6877 Fax: 02 4577 5830                        Ph: 03 6354 2310 Fax 03 6354 2310
Web: www.oz-mushrooms.com.au
Huon Valley Mushrooms                                     Tasmanian Herb Growers Association
Main Rd                                                   GPO Box 442
Glen Huon, Tasmania, 7109                                 Hobart, Tasmania, 7001
Ph: 03 6266 6333                                          Ph: 03 6295 1708 Fax: 03 6295 1964
Tasmanian Mushrooms
176 Sheffield Main Rd
Spreyton, Tasmania, 7310
Ph: 03 6427 2134



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