As the government faces the biggest grilling yet over its AWB role, is its choice of a single desk for selling oranges to China another case of see no evil?

The government may think the decision to pursue a single desk policy is the most efficient way to export Australian fruit to China, but the advice it got in 2002 suggests this isn’t the best decision the government could make for Australia’s struggling citrus growers.

In April 2002 the Productivity Commission, under advice from Treasurer Peter Costello, presented its analysis of the Aussie citrus industry. One of the Commission’s terms of reference was to examine “the competitiveness of the industry, including industry to enhance competitiveness”, which included assessing the best model for exporting Australian oranges around the world.

In its final report, the Commission handed down a stinging rebuke of the single desk policy Australian exporter Horticulture Australia (HAL) was using at the time to export oranges to the US. And even though it didn’t suggest scrapping the policy (which the citrus industry was lobbying for), the Commission’s report concluded that “export control arrangements for citrus products sold into the United States are likely to limit the opportunities available for some Australian exporters”.

Under the agreement, all orange exports were forced to go through HAL and were sold to a single US importer – an almost identical situation to the one that is currently proposed for exporting oranges to China. The report recommended that although export control powers were helpful in creating premium prices for exports in a select number of areas, the citrus industry was definitely not one of them.

“Restrictive export controls may be impeding the development of markets for Australian citrus products — imposing costs on the industry, primarily through the loss of market opportunities and flexibility to meet changing market demands”, the report concluded. “The use of export control powers may be appropriate in certain, narrowly-defined circumstances. However, these circumstances do not appear relevant to Australian citrus export markets.”

In the wake of AWB, you’ve got to wonder why the government went against the grain to give HAL an AWB-like monopoly in an export market as large as China.

Peter Fray

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