CORRECTED VERSION
OUTER SUBURBAN/INTERFACE SERVICES AND DEVELOPMENT COMMITTEE
Inquiry into sustainable development of agribusiness in outer suburban Melbourne
Werribee— 17 February 2009
Members
MrN. Elasmar / MrD. HodgettMsD. Green
MsR. Buchanan / MrD. Nardella
MrM. Guy / MrG. Seitz
MsC. Hartland / MrK. Smith
Chair: MrG. Seitz
Deputy Chair: MrK. Smith
Staff
Executive Officer: MrS. ColeyResearch Officer: MrK. Delaney
Witnesses
Mr Nik Tsardakis, Member and Past President (affirmed), and
Mr Carmelo Santamaria (affirmed),
The Rate Payers of Werribee South Inc
The CHAIR— During the presentation MrKhalil Eideh, a member for Western Metropolitan Region in the Legislative Council, was present in the public gallery. I welcome him.
MrTSARDAKIS— My mailing address is 514Duncans Road, Werribee South, 3030.
MrSANTAMARIA— My mailing address is 645Duncans Road, Werribee South.
The CHAIR— Gentlemen, you have about 15minutes for your presentation, which will give us some time to elaborate on that and ask some questions.
MrTSARDAKIS— Thank you very much for the opportunity to present to this inquiry. We have attempted to provide as full a submission as possible, covering all the issues we see as critical to the irrigation district if it is to continue to produce, process and distribute agricultural products for human consumption. We provided that report on 29January. We make ourselves available to answer questions relative to the issues raised in our submission and the attachments and are happy to comment further or clarify any particular reference. Normally we do not get such an opportunity, so we are very thankful for it.
Irrespective of the planning laws, the future viability of the irrigation district for soilbased agriculture is totally dependent upon the provision of water of a sufficient quality and quantity and at a cost consistent with the sustainability of the irrigation district for soilbased vegetable growing.
The Werribee irrigation district consists of approximately 3000hectares. It is located in the Werribee South green wedge and it is considered an important soilbased supplier of food to the Australian domestic market. The area is predominately domestically focused and is significant in both economic and employment terms.
On a broader scale, the irrigation district is located within the Port Phillip and Western Port region, which consists of some 1.3million hectares, of which 18per cent is urban, 40per cent is rural farmland and 42per cent is forest. It contains metropolitan Melbourne, a thriving international city that is home to more than twothirds of Victoria’s population, and it is the hub of the state’s commercial, industrial and transport infrastructure and an important rural and agricultural region.
To highlight where the irrigation district currently sits in the production of vegetables for human consumption in Victoria, we refer you to appendix1, and that is an attachment. The first chart summarises all the regions in Victoria that grow vegetables for human consumption. That data is for the year 2006–07 and it is sourced from the ABS. As you can see from the first line, the Port Phillip and Western Port area, where we belong, has a gross value of $360million worth of produce and a value at farm gate of $323million, the number of businesses in the area is 467, and it is estimated that 13000 hectares are used.
If we go to the next page and try to put some of that into perspective, you can see that the total value at farm gate for vegetables in Victoria is $628million, and the Port Phillip and Western Port region accounts for $323million, which is 51per cent. If you take into account that the irrigation district has a farm gate value of around $60million, that is about 18.5per cent of the Port Phillip and Western Port area and about 9.5per cent of Victoria.
If you look at the number of businesses, you see that the Port Phillip and Western Port area accounts for 41per cent of the total of Victoria’s businesses in the agricultural area. The irrigation district accounts for 161businesses, which is over onethird of the total businesses in the Port Phillip and Western Port area, and 14per cent of Victoria’s businesses.
In respect of the number of hectares that are used, the Port Phillip and Western Port area has 41per cent of Victoria’s total, the irrigation district here has just short of 16per cent of that area and 6.5per cent of Victoria’s total.
On the third page we try to break down the figures a little further and with a very simple cut try to indicate what the farm gate value per business is. The first line on the lefthand side, where we have $60million as the farm gate value for the irrigation district, as against 161businesses, that would produce a value of about $372000 per business. If you use the same analysis for Port Phillip and Western Port, it is $692million, and if you use it for Victoria in total it is $551million. Our figures are distorted because of the large number of small holdings in Werribee South and the high number of businesses. As we said, they are approximately a third of the total businesses in the Port Phillip and Western Port area.
If you look on the righthand side— that is, the farm gate value per hectare— you see the irrigation district is the best at $28000 farm gate value per hectare, compared to $24000 for the Port Phillip and Western Port region and $19000 for Victoria overall.
Lastly, the figures for the number of hectares per business. The first line represents the irrigation district and indicates that there are 12.96hectares per business for the irrigation district. In the Port Phillip area it is 27.9hectares, and in the Victorian figures it comes out at 27.9. You will recall from our submission that out of the 490lots that exist in the irrigation district only 17— which is 3.5per cent— were 15hectares or higher in size.
From field to table our food and farming systems are incredibly and increasingly complex. There are profound environmental, economic and social consequences to every aspect of our agrifood system, from the way farming is conducted to the ways in which agricultural products are processed, distributed and sold to our daily food choices and their health impacts.
It was way back in 1925 that soilbased vegetable growing first made its appearance in the Werribee South area. Before that time lucerne hay and then irrigated pasture grasses had been the main crops with some land used for orchards. It was in this period that many Italian and other European immigrants settled in the district.
Today up to four soilbased crops per hectare per year are grown, well above the average of two crops elsewhere. The irrigation districts, with onfarm changes from flood irrigation to fixed inground sprinkler setups and other efficiencies, has continued producing a considerable volume of vegetables. For example, up to 55000lettuce and 24000cauliflower plants are used per hectare at each planting with harvest yields in excess of 75per cent. This has been against a backdrop of no new water delivery infrastructure to the farm gate since the irrigation system started in the 1920s. Today the irrigation district still reflects small soldier settlement subdivisions, which are too closely settled with a tight knit of houses and irrigation channels. By its very settlement it discourages corporate farming, which appears the way forward.
Irrigation for soilbased vegetable production involves high capital investment per megalitre of water used and per hectare of land area. We believe that the irrigation district achieves high water use efficiency compared to many other irrigated industries. Irrigated agriculture in Australia accounts for approximately 70per cent of total water usage, with 13per cent of this water utilised in horticulture and viticulture, 4per cent on vegetables, 5per cent on fruit and 4 percent on grapevines.
In the irrigation district supplementary watering through irrigation is required to produce high quality and high yielding crops. Availability and quality of irrigation water is likely to present significant challenges for the irrigation district’s ability to maintain, let alone increase, its vegetable production. Since January 2005 the use of recycled water from the treatment plant has continually replaced river water as the main source of irrigation water. That trial will end in June 2009 without any guarantee of a fitforpurpose water supply after that date.
As the previous presenter said, the vegetable industry contributes in economic and societal terms to the irrigation district, the city of Wyndham and the state. The longer term outlook is that the global vegetable industry has large, growing consumer markets to supply. The world population is growing, there is a trend to urbanisation and consumers in developing countries have more disposable income. At the same time, consumers are increasingly well informed about food safety and quality and are more health conscious. An emerging focus on obesity in the developed world has sharpened consumer attention on food that is good for their health. Demand for quality vegetables in Australia and overseas can be expected to grow. However, there are uncertainties about further growth in vegetable consumption per person in Australia.
The challenge for businesses in the irrigation district is to secure fitforpurpose water and the upgrade of the ailing delivery infrastructure. The ability to adapt has been a hallmark of successful soilbased vegetable growing in the irrigation district since the irrigation system was built more than 80years ago.
Succeeding generations of farmers have made the Werribee irrigation district prosperous, attracting investment on the back of the growers’ capacity to manage the vagaries of weather and markets. Growers are now being held back from adapting to some of the biggest challenges they have ever faced because of inadequate security of quality and quantity of water and ageing infrastructure. Prolonged drought, climate change, global competition, government procrastination and the trend to larger holdings are some of the realities that have exposed the irrigation district’s land intensity and irrigation system’s failings. A more efficient system is definitely required to ensure that each megalitre is used to the maximum benefit for the growers, the environment and the whole vegetable industry supply chain.
The future profitability and durability of soilbased vegetable growing in the irrigation district depends on a full industry strategy and approach that addresses all elements of the production cycle and supply chain. The profitability of each sector of the supply chain is critical to its overall health. You should also talk to Coles and Woolworths to get their views on the status of the irrigation district for their supply of vegetables. I think you might be surprised by the figures which come out.
As in other areas of agriculture the average age of growers is increasing. These factors present challenges that require more sophisticated, practical and diverse methods to cater for generational and social change than that offered today through the likes of a green wedge management plan.
The ability of the irrigation district to expand and adjust to the changing demands can only be made possible by the degree to which the state government is prepared to secure the water supply and overcome infrastructure inadequacies to allow growers to continue to contribute, as the attached figures show. What is of immense concern to the growers is that maintaining the status quo— where we are today— means condemning the irrigation district to a slow death. The location of soilbased vegetable growing in periurban areas has always brought conflicts of land use and pressures for urban development, forcing up land prices and making it difficult for growers to consolidate landholdings. The location of the irrigation district exacerbates that, as is shown by the level of interest in urban development in the city of Wyndham.
This is likely to lead to ongoing questioning by many parties of the longer term viability of retaining the irrigation district for agricultural activity whilst it is located amongst other natural resources like Port Phillip and expanding built assets like the Mansions complex, the zoo, the equestrian centre, the rose garden and so forth, which feature today as some of the state’s major drawcards for participants and visitors, and I think you probably all know that about 1million people visit those attractions within the surrounds of the irrigation district.
The indisputable fact is that the irrigation district is seen as an area of significance. It is seen as an intensive agricultural production area on highquality agricultural land, but as we have indicated this could change overnight without suitable water. It is significant as a major tourism area with increasing appeal, and it is also a support area for the utilisation of coastalrelated public recreation and harbour development. It is also highly attractive as potential land for subdivision.
We need to understand what is the governments existing strategic architecture of the region, the insights into the emerging factors that may affect the competitive performance of the irrigation district in the global economy, and the impact they have on a different strategic architecture for the region to meet changing needs.
We do not know where the Melbourne2030 and green wedge legislation fits into this as it alone unfortunately does not in our opinion adequately secure the irrigation district’s production, processing and distribution of agricultural products, nor does it provide an exit strategy for the growers if the state government cannot commit to securing sufficient water of a quantity, quality and price consistent with the sustainability of the area.