Developing the Tree Fruit Industry in British Columbia Phase I Report

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Developing the Tree Fruit Industry in British
ColumbiaPhase I Report
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Presentation

• Overview of the Project
• Objectives
• Work Completed to Date
• Work to Be Completed
• Presentation of the Phase I Report
• Profile of the Tree Fruit Industry
• Key Trends
• Key Issues to be Further Reviewed
• How You Can Provide Input

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• Overview of the Project

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Objectives

• The British Columbia Fruit Growers Association
  has commissioned development of a strategic plan
  for the tree fruit industry. Specifically, the
  project is designed to
• Identify and assess key issues that are
  strategically important to the overall long-term
  success of BC tree fruit industry
• Identify specific strategies and meaningful
  actions that industry, government and others can
  pursue to assist the industry to enhance its
  competitive position and build a stronger
  industry future

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Three Phases of the Project
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Work Completed to Date

• Met with the Project Steering Committee
• Collected and reviewed available data and
  previous studies
• Developed a profile of the tree fruit industry in
  BC
• Established a website for the project
  (www.treefruits.ca)
• Reviewed characteristics of the tree fruit
  industry in other jurisdictions (Washington,
  Oregon, Ontario, California, and NZ)
• Conducted interviews with 50 industry
  stakeholders including growers, packers,
  marketers, retailers, wholesalers, institutional
  buyers, associations, processors, government, and
  researchers
• Identified strengths, weaknesses, opportunities
  and threats facing the industry
• Conducted a preliminary assessment of key issues
  and opportunities for development
• Prepared the Phase I Report

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Next Steps

• Stage public meetings (August 24)
• Conduct an industry workshop to define the key
  issues and identify potential strategic
  directions (October 18)
• Participate in the BCFGA Horticultural Forum
  (November 15)
• Conduct further research into key issues and
  strategic direction (November December)
• Prepare the Strategic Plan (to be released at the
  BCFGA Annual Convention January 27, 2007)

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• Profile of the BC Industry

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The BC tree fruit industry generated farm gate
receipts of 68 million from about 18,000 acres
of production in 2005
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Farm gate receipts have risen at less than the
rate of inflation over the past 35 years
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Significant declines in production acreage have
been largely offset by increases in production
per acre
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Turnover in the industry has been relatively high
and is likely to continue
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Nevertheless, tree fruits remain a significant
economic driver for the region

• Approximately 1,800 growers (400 to 500 larger
  commercial growers)
• Industry employs about 5,000 people on farm, over
  1,000 in packing houses, and about 1,000 more in
  support industries
• 40 to 50 BC companies involved in processing tree
  fruits, employing about 2,500 people
• Orchards serve as a major tourism draw and a
  defining feature of the Okanagan

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BC accounts for less than 3 of combined Canadian
and US apple production
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While a small cherry producer, BC has benefited
from strong prices for its late season variety
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BC is a net importer of the tree fruits we produce
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• Key Trends

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All countries are struggling to deal with the
impact of increased world production and trade

• Over past 15 years, worldwide production has
  increased by about 60
• China apple production increased six-fold, now
  accounting for over 40 of world production
• Poland increased production three fold
• Brazil doubled production
• Chilean production grew by 90.
• Trade liberalization and technological advances
  (e.g. storage) that allow more products to be
  delivered quickly to any market in the world have
  greatly heightened the competitive environment

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Apple demand is stagnant or declining in many
regions

• Per capita consumption of fresh apples in North
  America fell from 8.1 pounds in 1991 to 6.8
  pounds in 2005
• Only in China is there a significant rise in
  demand, driven largely by the ready availability
  of apples and rising household incomes

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Production increases, which outpace increases in
demand, have resulted in declining grower returns

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One way industry has attempted to respond is
through development and commercialization of new
varieties

• New varieties, such as Ambrosia, can generate
  significantly higher prices than older varieties
• There is increasing emphasis on the protection of
  cultivars through plant patents and trade marking
  products
• We have seen the emergence of club varieties
  which promote demand through specialized
  marketing programs and limit production

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There has been a shift in the varieties produced
in BC over time
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Other Trends

• Grower consolidation, particularly in the US and
  New Zealand
• Greater consolidation in other levels of the
  value chain (now dominated by large corporations
  who wield extensive market power)
• Crop management is intensifying (higher planting
  densities and improved cultural practices)
• Quality assurance, product traceability and food
  safety programs such as HACCP have become
  increasingly important

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Strengths and Weaknesses of the BC Industry
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• Potential Issues
• Identified for Further Analysis

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Fourteen issues were identified for further
review

• Fruit quality and grading
• Structure of the industry at the packing house
  and marketing levels
• Access to labour
• Access to market, business and technical
  information
• Productivity and costs at all levels of the
  industry
• Opportunities in organic production
• Development and commercialization of new
  varieties
• Consumption of BC tree fruits in BC
• Food safety
• Long-term lease restrictions
• Partnerships with other jurisdictions
• Value-added products
• Export markets
• Anti-dumping trade actions

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In addition, four items were selected for
immediate review

• The CAIS Program
• Potential to establish an Agriculture Development
  Fund
• Opportunities for funding under ACT Now!
• Commercialization/marketing strategies for new
  varieties

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How You Can Provide Input

• Visit the Website (www.treefruits.ca)
• Provide input through the website
• Contact the consultant, the Association or a
  member of the Steering Committee