8/13/2019 Pulp Fiction: The juicy tale of the Australian citrus industry

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Pulp Fiction: The juicy tale of the Australian citrus industry

Matt Brennan

Citrus has always allowed humankind to explore their limits, whether it is used as an anti-scurvy

agent from the late 18

th

 Century, right up until today when beer drinkers will be willing to pay amaximum of $10 for a bottle of corona as long as there is a lemon wedge dangling in it.

The citrus industry in Australia is presently valued at over $190 million and this is quite impressive

given that only 0.003% of Australia’s landscape is used to produce this zesty little crop. The growth

of the industry however has come at a heavy price and until now the industry has been able to

gently sweep it aside in a similar fashion to the US Debt Crisis. The bitter reality is that the industry

has been surviving off government handouts since 1979 all the way up to 2011 where the

government subsidised between 40 – 100% of all export costs along with other stimulus measures.

Handouts are still happening today but they are now predominantly structured as a government co-

contribution scheme to ensure some accountability with expenditure.

The Chief Executive of Citrus Australia genuinely laments the demise of oranges as a half time staple

and partially blames this for the downfall of citrus: “What they (youth) are doing now is having

sports drinks instead.” Other hurdles include continuous droughts in agricultural zones (with severe

flooding elsewhere), the Australian dollar being well above historical averages, intense competition

from Peru, Chile & South Africa and being out marketed and outperformed by significantly cheaper

imported concentrate juices. Exporting concentrates is an effective means for international

companies to flood the citrus market, as they are not as exposed to the strict quarantine guidelines

that fresh products endure in Australia.

So after having money intravenously pumped into its veins for the past 30 years, the citrus industry

is on the brink of collapse. After monitoring the General Motors (Holden) situation and applying a

few macroeconomic principles, it is self-evident that a protectionist strategy (the motor vehicle

manufacturing industry in Australia has been sticky taped together with government funding for

over 70 years) does not work in the long term.

Unlike OPEC (Organisation of the Petroleum Exporting Countries) who control over 53% of the

world’s oil supply, the citrus industry does not have the luxury of cutting off supply to artificially

raise prices (as Australia makes up 1% of total world production and specialises in the fresh varieties

of citrus which are difficult to store.) But that is exactly what they are doing. In 2012, 1500 hectares

of citrus trees were uprooted (this is the equivalent of 50,000 tonnes of citrus and the entire West

Australian output) along with 2-3% of annual production being dumped every year. This practise of

citrus dumping is like hoisting a choke chain on Bambi, especially after witnessing the footage of the

devastation that typhoon Haiyan caused in the Philippines, where survivors are so desperately

seeking food and water (an orange typically contains at least 75% water and is a cleaner source than

most of the available drinking water.)

8/13/2019 Pulp Fiction: The juicy tale of the Australian citrus industry

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What can be done? Citrus Australia has set up a committee to direct feedback (a complaints

department) from regional suppliers. They have also set up another committee to “strategically

drive” a 5 year plan. This plan is easily accessible and surprisingly direct in its assessment of the dire

situation, with one interesting initiative being that exports to Korea (the southern part) will total $15

million within 5 years, at present; the balance is “negligible.” 

Prime time: The ads which helped Revolutionise Australian food consumption. Source: Google Images

There have been many recent successful food related campaigns from West Australian potatoes, to

bananas and former AFL player Sam Kekovich’s controversial Australia Day advertisements which

have seen the average consumption of cattle rise to 32.5kg per person each year. Australia has so

utterly got behind its cattle production that cattle now outnumber Australians by over 5 million. The

cattle industry in Australia is thriving with Australia being the 3rd largest exporter in the world (Brazil

is second and India is the leading exporter of their sacred animal.) Cattle production in Australia

takes up 336 million hectares or 43.4% of Australia’s landmass. 

If much of Citrus Australia’s problems stem from poor marketing, should Lebron James or Lance

Franklin be endorsed to suck on an orange at the halftime break? Whilst the citrus industry is a long

way behind the beef industry in terms of size, influence and being on the brink of collapse, let’s hope

that in the short term at least one of the committees formed manages to halt the barbaric practise

of citrus dumping.