The Australian Apple Industry: Can the family-owned farm survive?

The Australian apple industry is at a cross roads; production is increasing, consumption is declining, growers’ margins are decreasing and export opportunities are scarce.

This study of the apple industry in New Zealand, Washington (USA) and South Tyrol (Italy) shows that there is much that the Australian apple industry can do to improve its position.

Consolidation and specialisation of farms have been spectacularly successful in New Zealand, with apple growers there now being regarded as members of a new ‘millionaire’s club’. The author sees that it is time for Australian farms also to consolidate and specialise, and considers four possible ways to adapt.

The cooperative system of South Tyrol is seen as a key part of the success of apple farming in that region, yet the demise of the formal cooperative in Washington showed that cooperatives are clearly not a silver bullet. While cooperatives are not seen as a solution for Australia, the author believes that the Australian apple industry would only gain if orchardists worked together and supported each other in a more cooperative manner.

The benefits of continual renewal and succession planning were highlighted by the New Zealand case study, where annual self-assessment and long-term strategic planning have become embedded in the culture of the business. The author believes that similar continual renewal and succession planning are also essential for the Australian apple industry.

The importance of marketing for success of the fruit industry was shown in all three case-studies. With the Australian fruit market generally restricted to domestic supermarkets and their stranglehold on the distribution of the fresh produce dollar, it is essential for the Australian apple industry to increase both its advertising budget and its share of the export market. This will take an industry-wide effort and possible government support.

The Australian apple industry is in need of financial investment to develop new varieties, intensify planting systems and build new infrastructure such as modern packhouses. The industry has difficulty attracting investment due to many issues, including lack of data 4 concerning the industry. Cooperation within the apple industry to enable the collection of high quality data to attract investment is seen as essential.

With Australian apple farmers facing diminishing farm-gate returns, this report offers hope for a bright future. However, urgent action is needed.