Statement on export certification claims by Citrus Australia

A media statement released by the industry body Citrus Australia on Oct. 29 suggests the Commonwealth’s proposal to raise export certification fees will result in a 277 per cent rise for some charges and cost the average grower $30,000 before they have exported a single carton of produce.

The “average grower” example offered by Citrus Australia distorts the impact of proposed changes on the overwhelming majority of growers in the horticulture sector.

The likely annual registration costs per citrus orchard under the new fee regime would be between $45.60 - $1,367.10 per year. In the most extreme case -- a mid-sized pack-house with an extremely poor compliance history -- the estimated annual cost of registration and audit per orchard would be at the top level.

The $30,000 figure is unsubstantiated and appears based on a calculation of costs unrepresentative of an average grower. The example assumes the ‘average grower’ will incur more than 90 hours of audits by the department before they have exported a carton of fruit. The department does not invoice citrus growers directly for audit and registered establishment fees, but invoices packing houses – which typically service a number of growers. The vast majority of fruit packing houses have only have one or two associated orchards audited by the department, normally taking 8 hours or less.

Citrus Australia’s $30,000 estimate seems to have been pulled from one unusual 2019 event in which one single pack-house had 44 of its associated orchards audited due to very high levels of compliance difficulty.  The total cost of registering this pack-house and conducting audits of its 44 orchards would be close to $30,000 if the new fees were applied.  The pack-house in this  example, however, services 101 orchards owned by 56 growers, so the cost per grower would be nearer to $536 per year.

In addition, not all citrus exporters have to pay the fees described in the media release.  Exporters wanting to send fruit only to less regulated countries like Singapore and Hong Kong do not need to pay any up-front registration or audit fees to the department.

Citrus Australia said the Department did not properly consult industry. The department in fact met with peak industry bodies, including Citrus Australia, multiple times between July 2018 and October’s release of proposed fees. A detailed breakdown of the costs comprising the horticulture export arrangement was provided to industry reps (Citrus Australia was invited) at a meeting held specifically for this purpose in the second half of 2018.

The media statement identifies that some charges will increase by 277 per cent.  The proposed fee package for horticulture exports actually includes decreases as well as increases, only two of which are at the top level and reflect additional regulatory effort.

This additional regulatory effort is a key factor behind horticulture exporters being able to maintain and expand their access to lucrative overseas export markets - increasing the profitability of our exports and the farm gate return to growers.  Since horticulture fees were last set in 2015-16, citrus exports have grown by over 20% by volume; and this is primarily due to growing exports to the highly regulated Chinese market.

Australia’s export certification system benefits our horticulture exporters and our $50 billion agriculture industries by giving our trading partners assurance that our agricultural exports are free of pests and diseases.  The fees charged by the department reflect the cost of providing that system – and are set in consultation with relevant stakeholders.