SOUTH AFRICAN CITRUS INDUSTRY

Study Tour Report

Barry Philp - April 2006

FINDINGS AND OBSERVATIONS

TABLE OF CONTENTS

• EXECUTIVE SUMMARY
• BACKGROUND
• ACKNOWLEDGEMENTS
• OVERVIEW OF THE SOUTH AFRICAN CITRUS INDUSTRY
• Citrus Production Districts
• South Africa’s Citrus Production – A Snapshot
• Future Growth of Citrus Production
• TECHNICAL ISSUES
• Irrigation and Fertigation
• Windbreaks
• Orchard Densities & Management
• Varieties
• PEST AND DISEASE ISSUES
• IPM Under Pressure
• Market Access
• Pest & Disease Threats for Australian Citrus
• MARKETING
• Marketing Structures
• New Market/Product Opportunities
• ORGANISATIONS SERVING THE SOUTH AFRICAN CITRUS INDUSTRY
• Citrus Growers Association of Southern Africa
• Citrus Research International
• Industry Training and Extension Programs
• Perishable Products Export Control Board
• Fresh Produce Exporter’s Forum
• SOUTH AFRICAN COMMUNITY ISSUES
• Community Empowerment
• Subsistence Agriculture
• Eco Tourism
• APPENDIX 1
• CGA 2006 SOUTH AFRICA VISIT ITINERARY
• APPENDIX 2
• KEY SOUTH AFRICAN CITRUS PERSONNEL VISITED
• APPENDIX 3
• CGA 2006 SOUTH AFRICA VISIT PARTICIPANTS

EXECUTIVE SUMMARY

The South African citrus industry is about three times that of Australia’s, producing approximately 1.7m t compared with 0.55m t. South Africa’s is the 3rd largest world trader in citrus, exporting over 1m t internationally compared with Australia’s 120,000+ t. It markets citrus around the world, although the UK and Europe are its main export markets.

One third of South Africa’s citrus plantings are less than 7 years old, and production is expected to increase from the current 70m 15 kg cartons to approximately 100m cartons in 2010. South Africa is a major southern hemisphere fresh citrus rival, and Australian growers can expect the South African citrus industry to increase as a direct competitor with Australia in many markets, especially higher value markets such as the US.

South Africa’s citrus plantings are about double those in Australia, but it produces approximately three times the volume of fruit. This is because good South African citrus growers achieve yields of around 60t/ha, compared with their Australian counterparts 30-35 t/ha. While Australia may have some fruit quality advantages, we need to be striving for productivity improvements so we can maintain price competitiveness in world markets.

South African technical specialists visiting Australia have highlighted the more advanced hydroponic and irrigation techniques they are using. While these offer some productivity benefits, it is important to realise that some South African growers are switching from hydroponic nutrient application to greater use of organic soil conditioners because they offer greater long term sustainability.

The productivity advantages being achieved by South African citrus growers are due to a total orchard management system approach that includes:

• Pulse irrigation focussed on daily water demand of trees.
• Nutrient management focussed on tree and crop demands, with application taking account of tree and fruit growth cycles, with application methods reflecting the most effective way of getting nutrient uptake.
• Use of regular pruning to get greater light penetration and tree productivity.
• Orchard densities of around 1,000 trees/ha to optimise production.
• Windbreaks to minimise fruit blemish.
• South African growers also benefit from lower salinity irrigation water, and mostly slightly acid soils that provide some natural productivity advantages.

South Africa’s citrus industry has its own dedicated research, development and extension agency that is owned and managed by the industry. This provides greater alignment of R,D&E programs with industry focus. Citrus Research International’s mission is to “maximise the long term global competitiveness of the southern African citrus growers through the development, support, coordination and provision of Research and Technical services, by combining the strengths of all CRI partners”. Consequently its research outcomes are clearly focussed on delivering competitive advantages in export markets.

The South African citrus industry went through considerable trauma when it lost its single desk marketing agency. However there have been some innovative new organisations and marketing arrangements established in recent years. The exporter accreditation, export contract arrangements, minimum price guarantee, and export market information exchange processes put in place by the Fresh Produce Exporter’s Forum have provided significant advantages. While these are not without problems, they require consideration by Australia’s citrus industry and Horticulture Australia.

The importance of biosecurity to Australia’s horticulture industries was reinforced during this visit. False Codlin Moth and Citrus Greening disease are major pest/disease problems in South Africa that cost growers a lot of money to manage effectively. Many of the control techniques have a high labour input and would be prohibitively expensive for Australian growers.

South Africa faces considerable social issues within its agricultural industries as it moves through the empowerment of indigenous communities. “Transformation” arrangements mandated by Government are being put in place to assist indigenous communities to own a greater proportion of the country’s resources and share in its wealth. Opportunity exists for Australia to learn from these transformation and social inclusion processes.

Eco tourism is a major income earner for northern regions of South Africa. It has proved more profitable than some agricultural enterprises (eg cattle grazing) in dry tropical regions, and delivers significant environmental and indigenous employment benefits.

BACKGROUND

Australian Citrus Growers arranged a visit to the South Africa citrus industry for growers as an annexe to the CGSA annual conference held in Western Australia in March 2006.

This 15 day visit was led by Mr Mike Arnold, a citrus grower from Waikerie and Mr Gavin Foord from Agriculture WA. It had a total of 20 participants, made up of 15 growers and 5 industry support staff (see Appendix 3 for list of participants).

The group visited a number of South African citrus regions, and met with a range of personnel from citrus production, marketing and technical organisations. The itinerary included visits to the major citrus climatic zones of South Africa and covered the range of citrus fruit types grown in South Africa (grapefruit, navels, easy peelers etc). It included visits to growing properties, packing sheds, processing operations, research, breeding and other industry support facilities.

Appendix 1 provides details of facilities, personnel and organizations visited during the study tour.

In addition, Mr Barry Philp met and discussed citrus industry issues with a range of other specialist staff during the visit. Contact details of these staff are provided in Appendix 2.

ACKNOWLEDGEMENTS

Mr Mike Arnold’s knowledge of the South African citrus industry was particularly valuable in identifying regions and key personnel to visit. Mr Gavin Foord coordinated much of the program as an extension to the 2006 annual Australian Citrus Growers conference.

Special thanks must go to Dr Graham Barry from Citrus Research International who assisted with developing the “on ground” itinerary and arranging many of the field visits to individual properties and businesses.

The following staff are also thanked for the additional time they made available for meetings during my visit:

• Dr Hoppie Nel – Golden Frontier Citrus
• Dr Tim Grout, Dr Hennie le Roux, Prof Vaughan Hattingh and Dr Graham Barry – Citrus Research International
• Mr Piet Smit – Cedarpack
• Mr All van der Merwe – A.L.G. Estates
• Mr Stuart Symington – Fresh Produce Exporters Forum

OVERVIEW OF THE SOUTH AFRICAN CITRUS INDUSTRY

Citrus Production Districts

South Africa’s citrus industry is spread across a variety of climatic zones, from sub tropical in Mpumalanga (24 S) and Northern Province to Mediterranean climates similar to South Australia in the Western and Eastern Cape (34 S).

This range of climates provides ideal conditions for growing the full range of citrus fruits. Grapefruit, mandarins and easy peelers are concentrated in northern districts. Orange production (especially navels) is concentrated in southern districts. Despite being at similar latitudes to Australia, fruit colour development is an issue, and de- greening of fruit is a routine practice.

This range of climatic zones also creates different pest and disease challenges for the South African citrus industry. False codling moth, citrus greening and Black Spot tend to be more significant problems for the more northern tropical regions. These problems limit access to some markets (eg access to the US is limited to southern production districts such as Western Cape).

Acknowledgement:

*Research & Technical Support Services in the Southern African Citrus Industry

By Tim Grout and Vaughan Hattingh, Citrus Research International, April 2006.

South Africa’s Citrus Production – A Snapshot

South Africa’s citrus industry is approximately 3 times the size of the Australian industry. Following are some key statistics:

• Approximately 60,000 ha planted (12th largest producer) (Australia 32,000 ha) producing 1.78m tonnes (Australia 550,000 t)
• 1,400 growers, 75 packhouses, 180 export agents (20 exporters = 85% of volume)
• There is estimated to be a further 2,200 small farmers (less than 100 trees) supplying largely to local markets.
• Export over half or approximately 60m cartons or 1 m tonnes (10% of world trade, 3rd largest exporter behind Spain and USA) (Australia exports approximately 122,000 t, or 1.2% of world trade)
• About 58% of fruit goes to the UK and Europe, with Russia and the Middle East also being significant markets.
• Local sales represent about 16% (310,000 t) of the market, and processing 26% by volume.
• Exports generate 85% of industry revenue.
• The industry employs approximately 100,000 workers.

Acknowledgement:

*Research & Technical Support Services in the Southern African Citrus Industry

By Tim Grout and Vaughan Hattingh, Citrus Research International, April 2006.

Future Growth of Citrus Production

Currently, approximately one third of South Africa’s citrus plantings are under 7 years of age (19,300 ha < 7 yrs, 40,500 ha > 7 yrs in 2003).

Consequently national production is expected to grow from 69 m tonnes in 2003 to 100 m tonnes in 2010. If domestic consumption and processing grow only modestly, South Africa will be looking to market an additional 30 m tonnes of fruit internationally in 5 – 7 years.

Considering Australia is also expecting some steady growth in production over the next 5 years, ongoing strong competition can be anticipated in overseas markets.

Acknowledgement:

*Research & Technical Support Services in the Southern African Citrus Industry

By Tim Grout and Vaughan Hattingh, Citrus Research International, April 2006.

TECHNICAL ISSUES

South African citrus growers are much more productive than Australian growers. Averaging 50-60t/ha crops is a key objective of most South African citrus growers. This is significantly above average 25-35 t/ha crop yields experienced in Australia. This higher level of productivity gives South African citrus growers a price competitive advantage in world markets.

Following are a few key technical areas that contribute to the significant difference in yield between South Africa and Australia. The difference in productivity is not attributable to a single factor, but is generated by a combination of factors within the overall production system. For Australian growers to achieve similar yields and improve packouts, it will be necessary to combine high density plantings with more sophisticated nutrition, irrigation, pruning and the use of windbreaks.

A key consideration in comparing technologies between South Africa and Australia is the cost and availability of farm labour. Typically, farm labourers in South Africa are paid approximately 1,000 Rand/month or $A60 /week. However labour efficiency is far less than Australia, with 3-4 employees being used to do a job that would normally be done by one person in Australia.

A trend in South Africa is toward greater use of contractors for tasks such as pruning, chemical application, orchard floor management etc. This reduces the need for individual growers to maintain their own labour pool for seasonal work, and can provide for more efficient utilisation of machinery.

Irrigation and Fertigation

Good irrigation controllers are the key to accurate irrigation and nutrient applications.

Pulse irrigation integrated with hydroponic supply of nutrients was observed on many properties. This system has been simplified and adapted from the Spanish developed Martinez system, with Mr Yapie Kruger of the Nelspruit district being a key advocate to the South African citrus industry.

South Africa has some key irrigation and soil management advantages over Australia. Most irrigation is derived from mountain and hill fed streams, most of which have low EC levels. Irrigation water is also generally of pH 5-6. Soils are also mostly slightly acid (pH around 6) sandy loams, creating less nutrition and soil management difficulties.

In contrast, the Sundays River region had alkaline soils and higher salinity water (approx 800 Ec), which is similar to the SA Riverland.

Irrigation systems varied, from single line drippers, to twin line drippers, to under tree micro sprinklers depending on soil type, age of trees, and the system favoured by the grower. Pulsing of irrigation varied in duration and length of time, from 0.25 hr to 1.5 hr pulses. Most growers were using monitoring equipment to assist decision making on amounts of irrigation, but not necessarily using these tools to schedule irrigations.

Some key comments on hydroponic pulse fertigation systems:

• Key to the system was a 12 month nutrient application program calculated on a monthly basis and simple to follow for growers. Calculations were driven by targeted orchard performance/yield and phenology of the tree.
• Growers were moving from a 2 tank to a 7 tank system (N, P, K, Ca, Mg, micro nutrients, chemical/chlorine) to save on labour for mixing nutrients.
• Systems were generally engineered so each block of trees was controlled by a single control valve and had an independent supply line. This simplified customisation of nutrient and water application for each block.
• Many growers were using venturi injectors to insert nutrient solutions into the irrigation line. Better managed operations were using nutrient injection pumps commonly used in hydroponic operations for greenhouse crops. These positive displacement units designed for hydroponic systems are far more accurate and easier to control.
• Most growers were using simple Excel spreadsheet based control and recording systems. Systems used in hydroponic greenhouses offer some more sophisticated alternatives, but require additional technical support.
• Care was taken to avoid soil under the dripper becoming waterlogged and anaerobic.
• Good technical backup for pumps and metering equipment is essential.
• One grower was using an innovative load sensors under the platform nutrient tanks were located on. This enabled automated dispensing of nutrient and acid mixes without the personnel risks associated with measuring and handling these liquids.

The high cost of hydroponic chemicals is a concern. Some growers are moving back to 4 times per year granular application programs, claiming similar performance at reduced costs.

On alkaline soils, application of trace elements via the irrigation system has proved ineffective (due to trace elements, especially Zn, Mn and Mg being locked into unavailable forms), and growers had returned to applying trace elements via foliar spray applications.

Some growers were also expressing concern about the sterile soil conditions being created by regular herbicide applications and hydroponic application of nutrients. They were experimenting with use of soil mulches and compost mixes (some made from waste fruit and chipped prunings), and blowing orchard floor grass clippings onto the tree line to aid maintenance of a healthy soil biota.

A range of irrigation pulse rates (both duration and frequency) were being used by growers. However the overall trends were:

• Larger applications of water early in the morning (within 1-2 hours of sunrise) when tree water demand was greatest, tapering off to lower applications in the afternoon.
• Application of nutrients in the morning when water uptake by the tree was greatest.
• Short duration and frequent pulsing of irrigation will create larger evaporation losses and is more likely to create salinity management issues, especially where under tree micro irrigation systems are used rather than drippers. Where irrigation systems take some time to pressurise, greater variability of distribution uniformity will be experienced with more frequent pulsing.

Recommendation

Supply of nutrients via a hydroponic system must be based on sound science in order to give improved productivity. Use of foliar applications of trace elements is proving more effective on alkaline soils. Moving away from maintaining good organic matter levels is likely to create “unhealthy” soils with low levels of biota, and create additional soil disease or health problems in the long term.

Recommendation

Pulse irrigation needs to be geared to daily tree water demands. However caution needs to be taken with frequent short duration irrigation pulsing increasing salinity problems, especially where under tree micro irrigation systems are used.

Windbreaks

Casuarina windbreaks are used extensively in South African citrus orchards.

Major growers in the Nelspruit region claimed windbreaks enabled them to achieve packouts as high as 60-70%, an additional 20% of marketable fruit. Windbreaks were widely used in this region but were not as extensively used in the Citrusdal area, which is surrounded by mountain ranges.

Casuarina was the predominate species used for windbreaks. They were chosen because they:

• Are fast growing
• Roots can be controlled with a ripper.
• Do not self seed easily.
• Have reasonable wind permeability to create a good sheltering effect (avoid leeward turbulence).
• Rhizobia on roots are N fixing, reducing the drain of nutrients from the soil.

Keys to successful windbreaks were:

• Planting at the time of orchard layout – most trees 1.5-2.0 m spacing.
• Use irrigation lines along the windbreak to supply it with water and nutrients.
• Windbreaks are normally cut down and replanted when the orchard is replanted.

The tree species used for wind breaks varied with region. While Casuarina was the predominant wind break species, they frequently created competition problems. Other species used in some circumstances included Dutch Alder and poplars.

Recommendation

Australian citrus growers continue to be encouraged to use wind breaks in an effort to reduce the % of unmarketable blemished fruit.

Orchard Densities & Management

Very high density trellised orchards are more difficult and expensive to manage – most growers prefer 1,000 trees /ha.

Most growers were planting higher density orchards at approximately 1,000 trees /ha. Some very high density orchards were observed using trellis lines, as high as 1,800 tree /ha. This very high density was not considered successful, created additional costs, and most growers considered 1,000 trees /ha a good compromise for early fruiting and manageability of the orchard.

Although approaches varied, all growers were pruning to assist with fruitfulness, to retain compact tree dimensions for ease of harvest, and to maintain vigour in older trees. Orchard trees 70+ years in age were maintained at good bearing levels through pruning.

Some used mechanical hedging in conjunction with strategic removal of large internal limbs to improve light penetration into the centre of the trees. Periodic removal of some large internal limbs was used by most growers.

Significant labour inputs are required for this hand pruning process. Australia’s much higher labour costs may constrain our ability to undertake the same level and frequency of hand pruning.

Varieties

Evaluating new citrus varieties at Addo Research Centre

South African citrus growers use an extensive range of varieties to produce different types of fruit for different markets at different maturity times over a range of climatic zones. They appear more active than Australian growers in pursuing and using different varieties tailored to tastes in different countries and to access specific markets.

The vast majority of varieties observed are available in Australia or are in the process of being introduced and evaluated under Australian conditions in the national citrus variety program being administered by Auscitrus (Mr Tim Herrmann).

The Agricultural Research Council has a comprehensive citrus breeding and selection program (led by Dr Nickki Combrink) at its Addo Research Station (Eastern Cape region). This 153 ha property has been operational since 1975, and its programs use conventional breeding and selection techniques. It currently has approximately 100 promising selections under final evaluation.

Key programs being run at Addo Research Station include:

• Maintenance of part of South Africa’s citrus gene bank – other elements are located at Nelspruit and Malelane.
• Development of improved citrus cultivars for cooler climates – mainly focussed on high quality mandarins.
• Citrus mutation breeding – mainly focussed on seedless selections (eg Eureka lemon).
• Development of improved rootstocks – control of tree vigour, adaptation to calcareous soils, and resistance to soil pathogens (eg phytophthora).
• Evaluation of cultivars – currently 37 navel, 17 valencia, 14 clementine, 27 easy peelers, 14 mid season, 18 lemon and 3 satsuma varieties under evaluation.
• Evaluation of rootstocks – impact on fruit quality and yield, performance in replant situations, resistance to phytophthora and viruses such as CTV.
• Investigation of the disorder peteca spot on lemons.

Most recent releases from Addo’s selection program are the mandarins Valley Gold and African Sunset, both hybrids of Ellendale X Robin crosses. An open pollinated cross between Miho wase satsuma and Nova is also looking promising.

Citrogold Pty Ltd is a South African based company established in 1999 that is looking to manage the availability of PVR controlled varieties of fruit, particularly citrus. This includes managing:

• grower access to PVR controlled or trade marked varieties via contracts.
• licensing of nurseries to multiply and distribute these varieties, including the payment of royalties.
• marketing programs to supermarkets in a range of specific countries for particular trade marked varieties of fruit.
• trademarks associated with particular selections or varieties.
• supply of technical information and support for trade marked varieties.

Citrogold have 70 varieties in their current program, and hope to expand this to 400 varieties in 12 months. Aside from citrus, it includes a wide range of mainly tropical horticultural crops. Citrogold have established a subsidiary in Australia (Variety Access Pty Ltd – Mr Wayne Parr, based in Qld), and are active in marketing citrus varieties in a range of countries including China and India.

There are 3 cultivar management companies in South Africa managing horticulture plant materials. There is a trend for them to be affiliated with marketers and exporters rather than nurserymen. Cultivar management companies have greater potential for revenue from production royalties and trademark promotion than from one off tree royalties associated with selling trees.

Recommendation

The Australian citrus industry continue to place strong emphasis on selecting particular varieties to meet the taste and other consumer preferences in target export markets.

Recommendation

In light of the orchard systems and technology observed in South Africa, the extension programs being delivered to citrus growers in Australia by Industry Development Officers be reviewed with a view to improving Australian citrus orchard systems and management techniques wherever appropriate.

PEST AND DISEASE ISSUES

IPM Under Pressure

Many export markets require pest levels below sustainable levels for natural enemies. These more stringent requirements are forcing growers to become more reliant on chemical applications. This in turn is having more impact on beneficial insects and reducing the effectiveness of IPM systems. As a result, pests such as red scale and two spotted mite are returning as a management headache.

Market Access

Bar coding of pallets is commonly used to enable product traceback.

Degreening is standard practice to achieve good fruit colour.

Chlorine and fungicide drench treatments were being used routinely when fruit was delivered from the field, and prior to it being placed in degreening chambers. Degreening is used extensively in most production districts to achieve good fruit colour.

Managing pests to satisfactory levels for market access is a major concern. It requires constant monitoring and appropriate use of various treatments.

Cold sterilisation temperatures (eg –0.5 C) required by of some countries make it more difficult for South African citrus growers to gain access.

Pest & Disease Threats for Australian Citrus

False Codlin Moth is a major pest throughout South Africa. It is being managed using a combination of chemical and fruit removal management practices.

A key management practice is hand removal of infested fruit from trees on a fortnightly basis, and removal of this fruit for burial. Such a management technique would be very expensive in Australia. New chemical treatments are emerging that should be more effective.

The bacterial disease Citrus Greening is common in orchards throughout the northern regions of South Africa. It is one of the most serious diseases of citrus, growing in the tissue of citrus trees, causing the canopy to go yellow, and eventually causing death of trees. There is no cure for this bacterial disease, and it transmitted by the leaf sucking Asian or African citrus psyllids.

Growers are managing this problem by a combination of insecticide sprays against the vector African citrus psyllid, and pruning infected foliage from trees. These are labour intensive and expensive operations. Although present throughout Asia, this disease and its vectors are not yet present in Australia.

MARKETING

Marketing Structures

The Fresh Produce Exporter’s Forum (FPEF) was established after deregulation of the single desk South African marketing structures. It is a company that has been operating for 4 years, with 72 of the approximately 300 exporters voluntarily belonging to it. These 72 businesses control approximately 80% of South Africa’s citrus exports.

Members of FPEF are required to sign a code of conduct, and can be dismissed if they fail to adhere to this code of conduct. This bars them from access to information and other trading benefits provided by association with FPEF. To underpin this, the South African government passed an Act in 2005, for the “Code of Conduct and Registration Procedure in Respect of Export Agents”.

FPEF’s key functions include:

• A screening process for exporters and their trading reputation. From this, an accredited list of citrus export agents is published, and growers are encouraged to deal through these accredited exporters.
• Establish requirements for contracts between growers and exporters. These contracts are required to be lodged with FPEF for screening to ensure they are fair to both parties.
• A system of minimum price guarantee and payment for a proportion of funds (often 60%) on delivery to the designated export point. In some instances, advances paid by importers are passed on to growers as deposits for fruit consignments.
• Requirements for produce sale proceeds to be paid into trust or guarantee accounts so they cannot be lost should an exporter become insolvent.
• Dispute resolution and mediation processes (including arbitration if necessary) between exporters and growers.
• Assembly of market information and sharing between members – involves specific market forum groups (eg Japan, Canada, EU, etc) meeting on a fortnightly basis to report and share information on market conditions and outlook.
• Provision of technical information relating to handling and management of produce.
• Contributing to black empowerment and the training of previously disadvantaged individuals.
• Facilitating trade visits between South Africa and interested countries.
• Works closely with the South African government in promoting fruit products at international trade fairs around the world.

Effectively FPEF enables some form of market coordination under South Africa’s anti competition legislation. However it does not prevent some exporters adopting strategies that go against the agreed regional or country marketing strategy in order to achieve a trading advantage.

Growers and exporters are required to enter into signed agreements for delivery of designated quantities of fruit to a particular specification and aimed at a particular market. This adds transparency to trading arrangements and provides risk sharing between growers and exporters.

Experience of FPEC indicates that its system tends to shorten the supply chain. Often there is more profit to be earned through shipping, handling and other cost minimisation rather than in the margin on the fruit.

Mr Stuart Symington, CEO of FPEF considered that the blueprint and experiences in setting up FPEF systems could be easily translated to Australia. He offered to provide time to meet with key Australian citrus industry representatives to assist this process.

Over supply of the Japanese grapefruit market in 2005 caused considerable losses, resulting in some exporters and growers facing bankruptcy. This came about because South Africa normally follows the US in supplying grapefruit. With Hurricanes in Florida, supplies were reduced, the Japanese supermarkets reduced available shelf space, South African growers exported additional volumes in response to high prices, but had reduced supermarket shelf space to sell from, and collapsed the market resulting in significant losses.

As a result some growers (led by Piet Smit in the Western Cape) are keen to see greater across industry programming of export volumes X timing to specific markets. It is proposed to use export inspection data to monitor volumes being shipped (on a weekly basis) to specific markets. This approach would hopefully result in a more controlled supply of fruit to markets, optimising supply and price, with a “name and shame” process being used against exporters who transgress the agreed export volumes. This approach may require some testing against South Africa’s anti competition legislation.

Recommendation

The option of using export management principles currently adopted by the Fresh Producer Exporter’s Forum be raised with Horticulture Australia and Citrus Growers of Australia.

New Market/Product Opportunities

CRI, the major research institute indicated that it was not investigating new value added or pre prepared citrus products. The R&D program specified by the South African citrus industry is focussed principally on orchard cultural and post harvest management issues.

ORGANISATIONS SERVING THE SOUTH AFRICAN CITRUS INDUSTRY

There has been major change to South African citrus industry structures over the past 10 years. Deregulation in 1996 resulted in removal of citrus boards and the single desk marketing arrangements delivered through Capespan.

This deregulation process was driven by anti competition philosophies and concern about effective use of power in the single channel marketing system. The “big bang” approach to deregulation resulted in many essential industry services being lost, particularly access to relevant and accurate information.

Because of deregulation, a period of major change to industry organisations occurred in the mid to late 1990’s. New South African citrus industry organisations were created, or organisations went through major reformation processes.

Below are brief descriptions of the major organisations currently serving the South African citrus industry.

Citrus Growers Association of Southern Africa

Citrus Growers Association (CGA) of Southern Africa was formed in 1997 as the principal citrus industry organisation. CGA is now the main body representing citrus industry stakeholder interests to government, exporters, research institutions and suppliers to the citrus industry. CGA has grower representation from 15 regions across South Africa as well as Zimbabwe and Swaziland.

CGA was initially established using a voluntary levy process, but this proved ineffective. Lobbying of the South African government enabled legislation to be introduced in 2001 for provision of a compulsory levy. In 2004, the 4 year levy rate set for export fruit was increased to R0.0213 /kg, or R0.32 /15kg carton, equivalent to approximately $A5 /t. These levies are not generally matched with Government funding input. With consolidation of its funding source, CGA has been able to move forward with development of substantial industry programs.

The main areas of activity for CGA are:

• Market access is considered a cornerstone, particularly to the USA, European Union and South East Asia.
• Ensuring the industry provides fruit to the required standard for these markets, especially from a food safety and phytosanitary perspective.
• Research is considered a primary function – determining grower research priorities, directing research effort and controlling research expenditure.
• Transformation – inclusion of previously disadvantaged indigenous communities in the industry.
• Communication to industry so members are kept abreast of issues.

Citrus Growers Association South Africa

PO Box 461

Hillcrest, Kwa Zulu Natal 3650 RSA

Ph 27 31 765 2514

Website www.cga.co.za

Citrus Research International

Citrus Research International’s (CRI) origins date back to 1956. Originally research was funded through the export organisations such as Outspan International. There was significant investment in research infrastructure during the 1970’s. Following deregulation, citrus industry research went through a difficult period between 1997 and 2000.

CRI was formed in 2001. CRI is owned by Citrus Growers Association (CGA) of Southern Africa and is responsible for managing technical and research services to the South African citrus industry. Its aim is to maximise competitiveness of southern African citrus growers through the development, support, coordination and provision of research and technical services.

This contrasts with the main R&D agency in Australia, Horticulture Australia delivers service to a wide range of horticulture industries, and has both Government and horticulture industries as major stakeholders.

The CRI Board is made up of 11 citrus industry stakeholders:

• 6 grower representatives
• 1 University of Pretoria
• 1 Stellenbosch University
• 1 Agricultural Research Council
• 1 Citrus exporter
• 1 Citrus consultant

This alliance partnership links University based research activities with industry funded research, and delivery of extension information to growers.

CRI’s programs are structured around a four key technical areas:

• Crop load and fruit quality management (fruit production and quality, rind condition).
• Disease management (soil borne diseases, graft transmissible diseases, Citrus Black Spot, fruit and foliar diseases, post harvest pathology).
• Integrated pest management (biocontrol disruption, cosmetic pests, False codling moth, fruit flies, mealybug and other phytosanitary pests, production pests).
• Cultivar evaluation (cultivars, rootstocks, acquisition of varieties).

Industry Training and Extension Programs

The extension team in CRI aim to provide a mechanism for effectively transferring research outputs to intended users of the technology. In the past, CRI has had a 1:1 extension service, but in recent years this has been reduced to 2 key staff (Hennie le Roux in Nelspruit serving northern regions and Hannes Bester serving Cape Provinces).

CRI’s extension objective is to coordinate the provision of extension services to the Southern Africa citrus industry. It uses the network of researchers, consultants, and technical personnel from cooperatives, citrus estates, and agricultural chemical organisations, as well as study groups and regional grower representatives in this process.

The CRI Extension team facilitate a network of 27 regional technical or focus groups. Other extension tools used include grower days, roadshows, an annual citrus symposium, and communication processes via the bimonthly SA Fruit Journal, websites and bulk emails. These processes are similar to those used in Australia.

Citrus Research International

PO Box 28

Nelspruit, Mpumalanga 1200, South Africa

Ph 27 13 759 8000

Website www.cri.co.za

Perishable Products Export Control Board

Established 80 years ago, the Perishable Products Control Board (PPECB) is mandated by the South African government to deliver quality inspection and cold chain services to the perishable produce industries.

While its inspection staff still check each pallet of citrus in packing sheds, and certify them for export, they are moving to quality management (audit) systems. Most large packing sheds are Eurepgap accredited because over 50% of exports are destined for the UK and Europe. PPECB also provides services relating to handling, stowage, and maintenance of cold chains for produce.

The citrus industry considered PPECB’s export statistics particularly valuable. PPECB provides data on intake and shipped volumes by variety by destination each week. This assists the citrus industry in orderly marketing of fruit to export markets.

Perishable Products Export Control Board

PO Box 15289

Panorama 7506, RSA

Ph 27 21 930 1134

Email ho@ppecb.com

Website www.ppecb.com

Fresh Produce Exporter’s Forum

The Fresh Produce Exporter’s Forum (FPEF) was established after deregulation of the single desk South African marketing structures. Details about the market related activities of FPEF are provided in the “Marketing” section above.

Fresh Produce Exporters’ Forum

Ph 27 21 914 3018

Email info@fpef.co.za

Website www.fpef.co.za

SOUTH AFRICAN COMMUNITY ISSUES

Community Empowerment

Under South African Government policy and legislation, citrus growers and packers are adopting strategies to enhance the ownership and wealth being returned to indigenous South Africans by the citrus industry. Large citrus growing and packing businesses were using a number of different strategies to meet this requirement.

Government policies are aimed at helping people to gain employment and afford improved housing.

Some of the indigenous community empowerment strategies included:

• Sale of a minority shareholding of the business, or allocation of specific areas of trees to indigenous groups (permanent staff are often shareholders). Government assists with the funding for sale of assets to indigenous communities, but there were debates about the value of these assets. Management was retained with the majority European owners – many indigenously owned businesses have failed due to poor management.
• Procurement of cartons, fertilisers and other inputs from indigenously owned businesses.
• Contracting pruning, picking, tractor work and other services from indigenously owned businesses.
• Establishment of training programs for staff – this may start with literacy and cover a wide range of skills, with each person having and individual training program.
• Provision of schools, medical services, sporting and other community facilities by some large well established businesses with a long history in the industry.

Funding of indigenous community development programs is also driven from the market place. Consumers in the UK and Europe pay a 10% premium for fruit at the retail level using a branded Fair Trade scheme. These Fair Trade funds are used to deliver programs to assist indigenous communities. Sun Orange Farms in the Sundays River district had entered into a R10m ($A2.5 m) program to provide a local community training, health, anti crime centre with library and health facilities. Such programs are intensely audited to protect credibility of the Fair Trade brand.

UK supermarket chain Waitrose also operate a similar scheme using a Waitrose Foundation sticker on fruit so consumers can recognise they are contributing to this foundation. The Waitrose Foundation aims to improve the lives of farm workers on South African citrus growing properties and businesses supplying their supermarkets. This fund raised approximately $A0.75m in 2005. It provides grants for crèches, building classrooms, education, training and skilling.

Subsistence Agriculture

Small subsistence farmers trade through local community markets

Significant areas of South Africa are devoted to subsistence agriculture, with large communities having traditional tribal values based around grazing animals. People in many “Homeland” communities have small properties used to grow small quantities of maize, cattle and some sub tropical fruits. Housing is low grade by Australian standards. Unemployment levels in these communities are very high.

Government programs are focussed on providing basic sanitation, water reticulation, housing and education services. Many of these areas in the north of South Africa are under pressure from refugees flowing in from neighbouring countries such as Tanzania, Swaziland, Zimbabwe, Botswana and Mozambique.

Data on the number of subsistence farmers growing citrus are impossible to obtain. There is an estimated 2,200 small farmers with less than 100 citrus trees.

Eco Tourism

Game farming and eco tourism has proved far more profitable and ecologically sustainable than traditional cattle farming in many lower rainfall tropical regions of northern South Africa. Significant investment is needed in infrastructure (roads, fencing, and accommodation facilities) to create viable business units. Game farming provides additional employment opportunities for local communities.

Eco tourism is a major foreign currency earner, and more profitable than traditional grazing enterprises.

APPENDIX 1

CGA 2006 SOUTH AFRICA VISIT ITINERARY

APPENDIX 2

KEY SOUTH AFRICAN CITRUS PERSONNEL VISITED

APPENDIX 3

CGA 2006 SOUTH AFRICA VISIT PARTICIPANTS