Michelle Christoe brings a wealth of marketing and trade experience in the fresh food sector to her new role as executive director of the Australian Horticulture Exporters’ Association (AHEA). She tells Asiafruit why Australia has the potential to be the “food bowl” for Asia and how foreign investment can work down under.
Firstly, can you give us a brief background on your career before joining the AHEA and what projects have you been working on since joining the association?
MC: Tariff barriers, quarantine issues, regulatory costs and rising freight charges, along with a strong currency and increased competition from Chile and South Africa have worked to erode the traditionally strong position of Australian horticultural exports. The Australian Horticulture Exporters Association (AHEA) has brought me on board to confront these challenges.
Since joining AHEA I have worked on several projects, including a formal submission to the Office of Transport Security, Department of Infrastructure and Transport to submit a solution for the implementation of new enhanced air cargo examination policies for the Australian horticulture industry. This has already resulted in positive outcomes, with the department now placing me on the National Regulated Shippers Committee to assist in implementing the policy. I have also been nominated onto the Horticulture Export Consultative Committee, where I have submitted several papers proposing the review fees and charges as they are currently unsustainable.
I have broad marketing and trade experience in the food industry, including horticulture, namely in the Asia Pacific and North American regions. My previous role was as CEO of Seafood Services Australia, a peak body which addresses the sustainable development of the industry, incorporating standards development, market access and free trade agreements (FTAs).
How do you assess the state of Australia’s horticultural export sector? What are the sectors strengths and what are its major challenges?
MC: The Australian horticulture industry exports more than 90 fresh fruit and vegetable products to more than 60 countries, with growth attributed largely to legal access into China. Australia has the production capacity to deliver quite significant volumes of fruit and vegetables to key markets throughout Asia, however the lack of market access in this region is holding the industry back. Our competitors have far better access to these markets. As a nation, we don’t focus enough on export strategies. Australia needs to take a strategic approach to market access priorities.
How have exports for Australian fresh fruit and vegetable products been performing this year and what are the prospects for the year ahead?
MC: Overall, the largest destinations for Australian exports are Hong Kong, Japan, the US and Singapore, although there are also key markets in the Middle East, the Pacific Islands and Europe for different fruit and vegetable products.
Fruit exports are dominated by citrus and grapes, while carrots, onions and potatoes are the main vegetable exports. Australia also has opportunities for short season, high value products such as summerfruit, cherries, mangoes and asparagus.
Our lowered dollar and strong demand from Japan and China in particular are driving growth in the sector, however government support is required to ensure this growth continues.
Over the past year we have seen large-scale Asian corporations enter the fresh produce sector and begin to make new outbound investments in supplying countries such as Chile. What potential do you see for Australian horticulture to attract such investment to help boost export opportunities?
MC: We should welcome foreign investment once it has passed the national interest test. With strong trade links, a strategic location and a highly educated workforce, Australia is uniquely positioned as a platform for doing business internationally, particularly within the Asia Pacific region. Australia’s strong track record, quality research institutions and commitment to world-class innovation make it a proven destination for bringing new ideas to life.
Australia continues to face major market access hurdles in a number of Asian countries? Has any progress been made over the past year in addressing these challenges and how, if at all, do you see the recent change of government helping with export development?
MC: The new coalition government has formed a strong and experienced team with a clear focus on agriculture, trade and regional development, which will assist Australia in becoming a food bowl for Asia. The coalition is committed to revitalising free trade negotiations to benefit horticultural exports, as well as lowering regulatory burdens to increase grower returns. It has also pledged to increase the federal government’s contribution to research and development by A$100m and committed A$15m in the form of rebates to small exporters for certification registration costs. It has also committed A$20m to strengthen biosecurity and quarantine controls.
Australian Prime Minister Tony Abbott has signalled his intention to sign a free trade agreement with China in 2014. What do you see to be the key possibilities and pitfalls of his promise to push this through?
MC: Despite trade between Australia and China exceeding A$125bn in 2012, negotiations between the two countries for an FTA, which began in 2005, have to date been unproductive. We feel when China decides to go ahead with the deal, it will conclude quickly. Key indicators suggest that an FTA will be signed within the next 12 months.
Looking beyond China, how are export prospects shaping up for other markets in Asia? Which markets are showing the most potential and what is being done to develop these opportunities?
MC: Australia has the benefit of proximity to Asia. Korea, Japan and China will open up opportunities for the industry as FTA’s come into play. The AHEA is working closely with the Department of Foreign Affairs & Trade to ensure horticulture is represented in such agreements.
The National Food Plan was announced in 2013 and states global food production needs to increase by 75 per cent by 2050. Demand for food in Asia will likely double between 2007 and 2050, with China accounting for almost half of the increased demand.
The Australian government intends to invest A$5.6m to expand the country’s network of agricultural counsellors and increase the number of market liaison officers across Asia. It will also provide A$40 million to research and market Australian food products. The AHEA has been consulted in the research being conducted by Austrade to support the development of the National Food Plan. The plans could cost more than what is being given out so it’s important the government keeps consulting with us.
Horticulture in Australia as a whole, due to the strong domestic market, has not traditionally been an export-oriented sector, so the government has put out the challenge for it to be more focused on exports.