Australia's vegetable imports from Europe continue to surge upwards

Imports from Italy, Netherlands, Belgium, Spain and France have collectively increased by an astounding 289 per cent or $45 million in value, since 2007-08.

Vegetable imports from Belgium have increased the most in percentage terms, nearly 100 per cent or $10 million in value since 2007-08, whereas imports from the Netherlands have grown the largest in value by $21 million or 82 per cent. The majority of vegetable imports sourced from Europe are either processed or frozen, this includes canned tomatoes and tomato paste from Italy, prepared potatoes (i.e. fries) from Netherlands and Belgium, and canned vegetables from Spain.

"This increase in vegetable imports from European nations comes as no surprise to the industry," said Andrew White, manager of industry development and communications, AUSVEG, "particularly given the level of financial support they receive under the common agricultural policy."

AUSVEG is Australia's leading horticulture body representing 9,000 vegetable and potato growers.

The Common Agricultural Policy (CAP) provides assistance to European farmers and comprises of three main elements: income support for farmers (direct payments); rural development (measures to help farmers modernise their farms and increase competitiveness); and market support (when bad weather destabilises markets).

According to the European Commission, the CAP's expenditure totalled €58 billion in 2011, accounting for 43 per cent of the European Union's annual budget. Focusing on one of three elements of support for farmers, direct payments to fruit and vegetable growers in Italy totalled €247 million, Spain €224 million, Netherlands €102 million, France €100 million and Belgium received €55 million. The combined CAP expenditure (for all elements) of these five nations equated to around €25 billion, in 2011.

White states: "This type of support to growers creates an uneven playing field and makes Australian growers less competitive. Such support measures, coupled with Australia's high operational costs, have already partly contributed to the demise of Australia's processed vegetable industry."

Vegetable processing companies McCain Foods and Heinz shifted production facilities from Australia to New Zealand in 2010 and 2011 respectively.

"Lower frozen vegetable exports are one of the trends we are experiencing since the emigration of Australia's vegetable processing sector. Australian frozen vegetable exports have fallen by 35 per cent since 2009-10," said White.