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Australian Vegetable Protected Cropping Industry Strategic Plan 2006-2011


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Title: Australian Vegetable Protected Cropping Industry Strategic Plan 2006-2011

Australian Vegetable Protected Cropping Industry
Strategic Plan 2006-2011
  • Draft 1 - September 2006
  • Prepared on behalf of
  • Horticulture Australia Limited

Table of Contents
  • Introduction
  • Vegetable Protective Cropping Strategic Plan in
  • The Current Reality
  • The Vegetable Protected Cropping Industry Future
  • Vision, Mission Objectives
  • The Way Forward
  • Industry Strategic Imperatives

  • The development of an industry strategic plan is
    essential for the vegetable protected cropping
    industry as it prepares to go through a
    significant growth phase in a challenging
    business environment.
  • The industry strategic plan will be used to guide
    the investment of industry levy funds and to
    focus the AHGA on the critical needs of industry
    in the future.
  • The final plan will be developed utilising the
    following 4 step process
  • Analysis situation and environmental analysis
  • Synthesis a workshop to develop a shared
    industry view and a draft Industry Plan
  • Consultation discussions and feedback from
    industry on the draft Industry Plan
  • Review regional workshops to review the draft
    plan, establish key action plans for inclusion in
    the Final Industry Plan
  • The Final Industry Strategic Plan is due for
    completion in late November 2006.

The Plan has been developed by industry with
consultation and discussion across all sectors.
The Plan was developed in 4 Phases to ensure it
meets the needs of Industry.
This draft Plan is due for finalisation in
November 2006 following consultation and review
by Industry
Vegetable Protective Cropping Strategic Plan In
  • There is no specific protected cropping statutory
  • Vegetable Levies are paid on many of the crops
    grown using protected cropping production
  • No statutory levies are paid on fresh tomatoes,
    whether they are field or greenhouse grown.
  • Funding research and development in the vegetable
    protected cropping market segment using levy
    funds is therefore dependant on Vegetable Levy
  • The mainstream vegetable industry (vegetable
    levy) have aligned their research and development
    priorities to VegVision 2020, the industry wide
    strategic plan produced as a result of the
    Industry Partnerships Program (IPP) partnership
    between the Department of Agriculture Fisheries
    and Forestry (DAFF), Horticulture Australia and
    AUSVEG Ltd.
  • The vegetable industry have, over the past two
    years, developed a clear direction for their
    investment in Integrated Pest Management and
    Minor Use Chemicals, two areas of investment
    highly relevant to the vegetable protected
    cropping market segment.
  • In order to ensure the research and development
    priorities of the vegetable protected cropping
    industry are addressed the segment needs to align
    itself closely with
  • The 7 Foundation Projects identified in Taking
    Stock Setting Directions
  • The 5 Strategic Imperatives identified in
    VegVision 2020 and
  • The Plant Health/Plant Protection strategies
    developed by the vegetable industry.

Protected Cropping Facts
The Current Reality
  • Protected cropping is the fastest growing food
    producing sector in Australia - AHGA reports
    industry growth, nationally, to be up to 6 per
  • Over 1600 hectares of vegetables, herbs and
    floriculture under protected cropping in
  • Farm-gate value of 600 million per annum -
    Equivalent to 20 of total value of vegetable and
    flower production (Biggs, 2004).
  • Gross annual revenue, combining all sectors
    (retail, service providers, research, etc), is in
    the order of 1 billion (Biggs, 2004).
  • Protected cropping directly employs 7 8 people
    per hectare - over 10,000 people nationally. The
    indirect employment multiplier for fresh produce
    is estimated to be 2, suggesting that the
    industry creates over 20,000 jobs.
  • The current investment in greenhouse
    infrastructure is valued at 640 million
  • Annual investment in new infrastructure is
    estimated to be up to 10 million.
  • The average annual return on investment is
    between 5 and 10.
  • The potential return on investment for high
    technology greenhouse and hydroponic vegetable
    enterprises is around 20 25 per annum - much
    higher than for other annual vegetable crops.
  • Still Need
  • Quantification of industry expansion trends to
    manage and support

The Current Reality
Stakeholders - strategic priorities values
The Current Reality
Organisational structure, direction and
  • There is no national body to represent the
    protected cropping industry.
  • There is no current strategy for any such body to
    operate or implement.
  • Resources are fragmented and inadequate e.g. No
    tomato levy

Organisational structures at state and national
level are not well developed for representing and
managing industry issues
Need a strategic national approach to industry
security linked to the wider vegetable industry
The levy framework is fragmented and inconsistent
with major gaps, especially tomatoes
The Current Reality
Industry communication and collaboration are poor
The protected cropping industry does not stand in
isolation from the rest of horticulture and has
many common issues.
  • There is a need to ensure that industry
    organisations have the right mix of skills,
    expertise and experience to provide appropriate
    governance and decision-making for industry.
  • Many of the issues impacting on the protected
    cropping industry are also relevant to many other
    horticultural industries, and in many cases,
    relevant to the rest of agriculture.
  • The industry currently has few mechanisms in
    place to leverage advocacy on shared issues
  • Industry leadership and succession are critical
    issues. The industry needs to develop and
    encourage young industry participants to assume
    leadership roles.
  • Improved communication across the value chain is
    essential to lift productivity, reduce costs and
    optimise returns. Adversarial positions are
    reducing trust and increasing costs.
  • As with other horticultural industries, business
    skills across the industry are generally poor.
    New technologies can expand the reach of
    education training programs.

Industry leadership and succession are important
issues for the future.
Improved communication across the value chain is
essential to lift productivity, reduce costs and
optimise returns.
The Current Reality
Costs are too high to be profitable and
innovative - needs review to fit
  • Internal cost structures tend to be poorly
    defined and managed, especially amongst the
    majority of small farms. As a result clear price
    signals for change cannot be developed or
    addressed without a gross margin benchmark
  • As new costs emerge they are generally passively
    absorbed until the business is unsustainable.
  • The supply chain takes advantage of these labour
    intensive price taker producers who are limited
    in their ability to define or negotiate on their
    real costs of production or relate these costs to
    any differential in the value of a product.
  • Typically, there are adversarial relationships
    between growers, processors, exporters and
    retailers causing lack of trust, poor
    communication and higher costs.

Rising cost pressures provide a major challenge
for the industry to remain viable.
Internal business costs and unrealistic supply
chain profit sharing undermine producer viability?
Adversarial relationships, fuelled by a lack of
trust and poor communications, exist at all
levels of the supply chain - increasing our costs.
The Current Reality
Industry marketing is non-existent
We need to know more about fresh vegetable
consumers than our competitors.
  • Vegetables seem to meet most of the criteria of
    consumer value but are generally seen as a
    commodity product undifferentiated and staple.
  • Generally, there is a poor understanding of
    consumer needs and how we can meet them in
    domestic markets. There is inadequate,
    insufficient and outdated information on consumer
    perceptions, preferences and behaviour.
  • A failure to understand consumer needs has meant
    that there has been limited industry investment
    in product innovation to value add to vegetable
    products. Unlike apples, potatoes and mushrooms,
    the protected cropping industry has not attempted
    to differentiate or promote its product. There
    are opportunities to introduce differentiated
    products such as premium varieties, gourmet
    selections and semi-processed products.
  • We have limited marketing and promotion programs
    to raise awareness of protected cropping veg in
    the eyes of consumers and as a result consumers
    have poor knowledge of product varieties, uses,
    health benefits, etc.
  • We have poor market information for quality
    decision-making and what we do have is poorly
    disseminated and not available to all sectors.
  • Supermarkets are driving supply chains in both
    export and domestic markets. They are often
    responsible for setting de facto industry
    quality standards and have a major impact on
    market pricing. Good relationships are essential.

Fresh vegetables are regarded as a commodity by
consumers and growers, alike.
We have poor marketing and promotion programs to
promote and educate consumers on the benefits of
fresh veg products.
Some established practices of the big retailers
are seen as unhelpful for industry viability.
Consumers Marketing
The Current Reality
  • Consumer attitudes, lifestyles and buying
    behaviours need to be understood
  • Consumer awareness, knowledge familiarity of
    onions need to be developed
  • Industry requires access to quality information
    on markets and competitors
  • Marketing activities have been fragmented and
  • Retailers believe that promotion will lift sales
  • We must build relationships with supermarkets
    value chains global and domestic

There is no current means for producers to access
timely market information
There is no discernment regarding the true value
of fresh vegetable products
Consumer education is required to establish a
price reward for a high value product
The Current Reality
Business management strategies are not well
  • A few businesses are leading the way with their
  • based strategy for major new investment in
  • technology, value adding and marketing. The
  • however face the following barriers
  • Businesses generally lack the market intelligence
    and critical information on production technology
    options and costs to base investment decisions
  • As a result financial institutions tend not to
    perceive a business case for replacing old
    glass/polyhouses with new structures and systems
    (poly/shadehouses are not regarded as
    tangible/transferrable assets by many
  • The unskilled, casual labouring history of the
    industry has not motivated skill development/
    retention of skilled workers.

Investment planning tends to be weak and
generally lacks a market driven business case.
Financial institutions tend not to be supportive
of new investment in greenhouse infrastructure.
There is a shortage of reliable skilled labour,
especially for modern hydro systems.
The Current Reality
Current technology is not well matched to
production or markets requirements
Modern greenhouse systems are uniquely capable of
consistently producing the high quality and
volume of produce required by supermarkets.
  • Overseas producers in Holland, the UK, New
    Zealand and the US, have established best
    practice technologies and management systems for
    their greenhouse systems.
  • Australia is lagging behind in the modernisation
    and efficiency game at the expense of business
  • There also appear to be frequent poor decisions
    about the type of technology that significant
    money is being spent on. Need to maximise
    advantages of natural environment with best fit
    to technology. e.g. benchmark water use
    efficiency and promote best management practice.
  • This gap needs to be addressed by building the
    base of expert support and facilitating industry
    recognition and uptake of the commercial
    advantages available through effective modern
  • Manage introduction of Bumblebees

Many of the systems being constructed are not
well suited to their climatic location.
There is a lack of Australian based expertise to
meet the planning and operational needs of modern
hydroponic farms.
Protected Cropping Technology - definitions
1. Conventional greenhouses Low tech
Characteristics Low structures (glass, poly,
mesh), soil cropping, no climate control. PEST
MANAGEMENT OPTIONS Improved spray program only.
Generally not capable of supporting biological
control in any reliable way. Seriously threatened
by neighbouring pest pressure.
2. Improved greenhouses Med tech
Characteristics Improved height and pest
exclusion, possibly hydro/heat/some
automation. PEST MANAGEMENT OPTIONS Improved
spray program, pest exclusion and possibly
biological control if have good pest exclusion, a
thorough insect crop scouting program, and
careful use of soft chemicals. Mild to moderate
threat from neighbouring pest pressure.
3. Fully modernised greenhouses High Tech
Characteristics Greatly increased height, pest
exclusion, hydro, climate system, integrated
automated systems. PEST MANAGEMENT OPTIONS
Improved spray program, pest exclusion and good
chance of implementing biological control if have
good pest exclusion, a thorough insect crop
scouting program, careful use of soft chemicals
and automated year round climate control. Mild to
moderate threat from neighbouring pest pressure.
The Current Reality
Information and training resources and delivery
are poor
  • AHGA
  • Pathways to production, a skilling initiative
    of the Australian protected cropping industry
  • International study tours
  • AHGA conferencing program
  • IDO Network
  • Identifies issues and needs for action via state
    or national funding bodies
  • Assists in organising meetings, workshops, field
    days etc.
  • Provides targeted information output on research
  • Organises periodic overseas investigative tours
  • Networks growers, researchers and industry
  • Much of the standards, resources and learning
    pathways are yet to be
  • developed that can underpin a national training
    program and build the
  • industrys required skills base.
  • This will need to include incentives and career
    pathways to make it an

Development of a national training framework has
The IDOs have established a national network of
communication and strategic relationships.
Not enough commercially independent experts to
meet industry needs.
There is no template for best practice
production linked to information and training.
There is no central information bank to resource
The Current Reality
Integrated Pest Management - National Strategy
A recent national IPM Stocktake has kicked off a
National IPM Strategic Plan for 10 minor crops.
  • A national IPM stocktake has identified critical
    gaps in 10 to 13 minor crops and and captured the
    transferable outcomes from over almost 40 veg RD
    reports to date.
  • The stocktake also profiled the current state of
    play of IPM adoption, and adoption barriers and
    promoters in 15 vegetable crops and a range of
    non-veg commodities.
  • This information has been used to identify
    priorities resulting in support for 18 new and
    ongoing IPM projects.
  • Information from the stocktake has been collated
    for a national IPM information hub and future
    extension efforts.
  • Other concepts for promoting IPM adoption are
    being assessed for funding as scoping
    studies/pilot projects - e.g. the role of
    commercial consultants.

A range of (18) projects have been newly
funded/maintained to meet strategic priorities.
Development of a national IPM information hub is
due to be commissioned shortly.
Chemical Summary
The Current Reality
  • Minor use strategy
  • Aims Improved relevance to identified needs
    ,efficiency (time and ), with a focus on IPM)
  • Industry wide consultation
  • International input to fast track best bets
    including overseas best practice data
  • Streamlined, simplified approval process
  • Ongoing review to keep gaps covered and progress
    toward new chemistries

Systematic identification of minor use issues and
gaps for control of pests and diseases
Filling gaps with appropriate chemicals
preferentially with an IPM fit.
The Current Reality
Industry lacks a framework of national standards
  • There is no mandatory whole of industry code of
  • conduct or policing of standards to maintain
  • product integrity, safety and trading fairness,
  • including
  • trading practices (code of practice) to ensure a
    fair return for investment,
  • standardised, nationally consistent Q.A. system,
  • chemical testing standards to ensure consumer
    safety, exclude poor practice and qualify for
    recognised niche or overseas markets (c.f.
    chemical free, organic, EUREPGAP) and
  • national control of use legislation to put
    growers on an even footing in all states

There is no mandatory code of conduct and
standards for the whole of the supply chain.
The Current Reality
PHA are currently developing a Vegetable Industry
Biosecurity Plan based on shortlisting known
  • Consultations with researchers and industry have
    shortlisted the key pest and disease threats for
    a number of crops.
  • DAFF have developed a report and recommendations
    to assist communication with growers from a
    Language Other Than English background (title ?)
  • These recommendations need to be worked into an
    implementation plan with resourcing of expert
    facilitators in major growing areas.
  • The strategy needs to produce effective
    consistency from offshore to the farm.

DAFF have consulted with industry on
communicating biosecurity understanding and
vigilance to LOTE growers.
Major planning and implementation issues still
exist in terms of controlling off-shore pest
threats, interstate trade and on-farm practices.
The Current Reality
Vegetable industry relationship to natural
resource and urban planning
  • Vegetable growing regions are progressively
    forced to the margins of arable land, which is on
    the edge of resource infrastructure.
  • Price competition for land, and other land use
    conflicts, tend to occur frequently with urban
    dwellers (chemicals, odours, noise etc.).
  • Access to water, gas and electricity is often
    problematic and prohibitively expensive.
  • These issues add considerably to industrys
    investment planning challenges.
  • Councils and state governments tend to not be
    pro-active in dealing with these planning issues.

The vegetable industry is seen as an optional
land use without adequate planning support.
This gives rise to conflicts in land use (urban
vs farming) and to poor access to critical
resources - water, gas, power.
The Industry SWOT Analysis
Synthesis of the Current Reality
Based upon the preceding review of the Current
Reality, industry stakeholders developed the
following summary of the vegetable protected
cropping industry - Strengths, Weaknesses,
Opportunities and Threats.
Strengths Weaknesses
Productivity Sustainability Product available all-year round Healthy, high quality product Lower ecological footprint Increased input efficiency e.g. water Reduced reliance on chemicals Wealthy demographic in domestic marketplace Growing demand Buffered from environmental conditions Readiness for climate change Lack of support to upgrade technology Industry leadership Increasing compliance cost and red tape Lack of quality market and industry information Declining terms of trade (cost/price squeeze) Deficient or non existent training in new and emerging technology available domestically Farm hygiene behaviour of neighbours Access to water Supply demand imbalance Available biological controls
Opportunities Threats
Promoting to consumers product grown will small ecological footprint, low food miles International supply chain alliances Strengthening supply chain relationships New crops and varieties Increasing employment New technology developed domestically and internationally Raising of a tomato levy Imports Bio-security breach pest and disease outbreaks Increasing input costs e.g. fuel Shortage of labour Water use - restrictions and costs Declining government support Threats to access to chemicals and fertiliser (security)
Linking the Vision to Outcomes
The Structure of the Plan
The 2006-2011 Strategic Plan recognises the need
to move from Vision to Action by utilising the
following planning structure to highlight the
linkages between elements of the Strategic Plan
Vision, Mission Objectives The Industrys
primary focus
Strategic Imperatives The key actions that
industry must take to achieve the Vision
Strategies Broad strategic directions for
achieving the Imperatives
Strategic Goals High level goals and actions for
delivering the Strategies
Project Action Plans The Project Plans required
to deliver elements of the Strategic Plan These
Project Plans will be the specific responsibility
of industry organisations and stakeholders The
protective cropping advisory group, Vegetable
IAC, AHGA, AusVeg, HAL, etc. The details of these
Project Plans will not form part of the Strategic
Our Vision for 2015
The Vegetable Protected Cropping Industry Future
By 2015, the Australian protected cropping
industry is recognised as a supplier of premium
quality vegetable products demanded by domestic
and global consumers. In achieving this, our
target is to increase the value of vegetable
production grown in a protected growing
environment to 1.8 billion annually while
increasing consumption and industry profitability
at all levels of the value chain. This will
require a strong focus on consumer needs, value
chain efficiency and collaboration at all levels.
  • Our Mission
  • In 2015 the Australian Protected Cropping
    Industry will be
  • organised and recognised for growing sustainably
    to worlds
  • best practice. Product will be sought by
    educated, aware
  • consumers through a supply chain of high
    integrity. Product
  • is coordinated within a market strategy
    delivering consistent
  • high returns to industry. The enabling
    strategies will be
  • owned by and benefit our diverse industry.
  • Our Objectives
  • The industry will achieve its mission by
  • Increasing consumption by developing informed,
    health-conscious, committed consumers
  • Enhancing the existing culture of industry wide
    participation through leadership with vision and
  • Developing effective, efficient production and
    processing value chains and
  • Generating targeted and reliable information to
    facilitate quality decision making.

The Industry Strategic Imperatives
The Way Forward
The Vision, Mission Objectives of the 2015
vegetable protected cropping industry future will
be achieved by industry delivering on the
following four Strategic Imperatives
The Vision 2015 - Increase consumption - 1.8b
value of production- Increase scale -
Improve productivity
1. Grow the market for vegetable products grown
using protected cropping systems
2. Increase Industry Productivity
3. Strengthen Industry Information
Communication Networks
4. Identify build industry leadership capacity
This Draft Plan is not complete
Industry Strategic Imperatives
  • As illustrated on the previous page, industry
    stakeholders have developed 5 Strategic
    Imperatives essential to achieving the Vision
  • At this stage of the Planning Process, the
    detailed Strategies that underpin each Strategic
    Imperative have not been explored in a structured
    manner and the strategies supplied are indicative
    of the required elements for success.
  • Regional workshops will be conducted in South
    Australia and NSW in October 2006 in which
    detailed strategies and action plans will be
    developed. Other industry participants will have
    the opportunity to provide input via email or
    speaking directly with Simon Drum or Tony

This DRAFT Plan is a work in progress. Detailed
Action Plans have not been developed at this
Regional workshops will be conducted in South
Australia and NSW in October 2006 in which
detailed strategies and action plans will be
1 Grow the market for vegetable products grown
using protected cropping systems
Industry Strategic Imperatives
  • Outcome To expand domestic markets for vegetable
    products grown using protected cropping systems
  • Strategies/Goals
  • Communicate the beneficial attributes of
    vegetables to consumers
  • Understand consumer perceptions of vegetables
    grown in a protected cropping environment
  • Identify the health and nutritional benefits of
    vegetable consumption
  • Develop and enhance vegetable products to meet
    consumer needs
  • Continue to introduce new products aimed at
    exceeding consumer expectations
  • Implement uniform Quality Standards (Australia
  • Establish agreed common systems and
    specifications for food service, retail and
    central markets
  • Develop a promotional program for vegetable crops
    grown in a protected cropping environment
  • Promote our environmental credentials to
    government, community, consumers and industry
  • Promote Australian Grown
  • Promote unique taste and quality attributes
  • Minimise the impact of regulation on Industry
  • Maintain and expand Market Access for key export
  • Develop Strategic Policy to minimise the impact
    of regulation on industry
  • Develop industry wide systems and strategies to
    match supply and demand

2 Increase Industry Productivity
Industry Strategic Imperatives
  • Outcome To build industry competitiveness
    throughout the supply chain
  • Strategies/Goals
  • Research, develop and encourage investment in
    technology accelerators to improve industry
    productivity at all levels
  • Continue to invest in the chemical minor use
  • Continue to invest in the development and
    enhancement of IPM tools and strategies on a
    regional and national basis
  • Encourage investment in new technologies to
    reduce cost and improve efficiency throughout the
    supply chain
  • Complete an Industry Benchmarking Study
  • Enhance environmental sustainability
  • Improve water use efficiency, recycling,
    treatment and disposal systems
  • Increase input efficiency
  • Modify production systems to account for climate
  • Move toward fully enclosed production systems
  • Enhance relationships and engagement with
    domestic and international supply chain partners

3 Strengthen Industry Information
Communication Networks
Industry Strategic Imperatives
  • Outcomes To disseminate reliable and targeted
    information to industry through appropriate
    mechanisms, networks and forums.
  • Strategies/Goals
  • Generate and communicate reliable and targeted
    information for members
  • Develop an Industry Website with a Members Only
  • Regularly survey industry to determine
    information needs
  • Utilise improved Communications Technology to
    expand the range of interaction with members
  • Encourage through-chain collaboration and
  • Establish regular Forums for discussion of
    industry issues
  • Involve all stakeholders in industry issues
  • Continue to conduct an annual Industry Conference
  • Co-host industry events with appropriate partners
    eg. AUSVEG
  • Enhance international alliances to ensure the
    Australian industry is aware of and participants
    in global industry development

4 Identify and build industry leadership and
Industry Strategic Imperatives
  • Outcome To enhance the human capital of the
    vegetable protected cropping industry
  • Strategies/Goals
  • Enhance industrys agripolitical lobbying
  • Encourage participation and leadership
  • Establish a Young Leaders Program
  • Fund participation in Leadership Development
    programs eg. Nuffield, ARLF
  • Organise industry study tours to other regions
  • Develop mentoring programs to improve skills
  • Enhance industry participants technical and
    business skills
  • Determine Industry Training and Education needs
  • Develop and/or source recognised training
  • Commission industry skills training in
    conjunction with other Industries to reduce costs
    and improve access
  • Use technology accelerators to increase the reach
    of training programs
  • Investigate the potential for a protected
    cropping training institute
  • Investigate labour sourcing opportunities
  • Importing seasonal contract labour
  • Investigate the potential for a statutory levy on

We need your feedback on the Draft Plan
  • The Draft Plan will be revised based on your
    comments and the input from participants at the
    regional planning workshops to be held in October
  • How can I give you my comments?
  • You can email your comments to burfield.tony_at_saugo or fax them to 08 8303 9542

This is an industry plan and we need your
feedback on its relevance to you and your
The Draft Plan will be revised based on industry
comments and feedback.