An open letter to the cut flower & foliage industry from the President of FAQI

The choice is ours

Horticulture Innovation Australia (HIA) is a not-for-profit, grower-owned research and development corporation (RDC) for Australia’s $9 billion horticulture industry which encompasses the fruit, vegetable, nut, flower, turf and nursery industries. HIA strives to increase the productivity, farm gate profitability and global competitiveness of Australia’s horticulture industries by investing $100 million annually in research, development and marketing programs.

All growers large and small, including flower growers, can become members of HIA (it’s free), for the purpose of having a voice and to keep up-to-date with HIA activities and operational arrangements – just visit www.horticulture.com.au.

The Federal Government allocates 0.5% of the Gross Value of Production (GVP) to all Rural Development Corporations, including HIA. The cut flower and foliage industry is part of this. For those industries that have a statutory gazetted levy, they can participate and get their levy dollar matched, 1:1 (minus an administration percentage). My research suggests that the Australian cut flower and foliage industry was last valued at $388 million yearly (IBISWorld Floriculture Production Market Research Report, ANZSIC A0116, April 2015). Our industry’s allocation would therefore be $388 million x 0.5% = $1.94 million annually. The challenge then, is for the industry to raise the funds in an acceptable way, to match the Federal Government funding so that projects can be undertaken for the combined benefit of all industry participants, projects that many flower industry participants can’t do on their own.

HIA has a Government mandate to drive the productivity of the industries investing in applied industry strategic research and development (R&D) (0 to 5 years) through to longer term (10 to 15 years). It has two funding pools: Pool 1, industry statutory and voluntary levies directed at individual industry specific needs; and Pool 2, a strategic fund that focuses on strategic co-investment for longer term ‘bigger issues’ across Australian horticulture R&D.

Currently the only means for the flower and foliage industry to invest in the HIA model would be to either:

  1. Raise a statutory levy ($1.94 million of levy funds annually); or
  2. Develop a collective industry fund, where it can be demonstrated that an industry that does not have a statutory levy initiates a system that effectively mimics a statutory levy.

Examples of the second option already existed under the old Horticulture Australia Limited (HAL) system. The processing tomato industry established a voluntary levy amongst the majority of growers, with funds calculated via a formula and contributed to the industry association, which then submitted a strategic investment plan to HAL and invested in a series of programs to benefit the majority of industry. While the details are currently being developed by the HIA Board, potentially it would need to be demonstrated that the majority (60%) of growers (by establishment) must contribute to this fund; that the contribution should be based on a standard transparent formula applied equally to all growers; that the contribution should be collected on an agreed regular interval (for example, monthly, quarterly, or yearly); that the contribution should be aggregated by a central industry organisation; that the purposes of the fund should be to conduct R&D across a wide range of industry programs (not for a specific or one-off project); and that the industry should submit a 3 to 5 year Strategic Investment Plan and an Annual Operating Plan. This would allow the Australian cut flower and foliage industry to participate and have access to either of the investment pools for horticultural R&D.

Instead of discussing the pros and cons of an industry levy, my suggestion is to be proactive and explore this new model of investment as outlined above.

If we don’t use it, we lose it – every year! How prepared are you to invest one half of one percent in project outcomes that your business could not achieve on its own?

Some of my project ideas are:

  • expanding demand for Australian-grown wildflowers and foliages in overseas markets
  • processing and funding requests for minor use permits and approvals for new chemicals
  • developing the next generation of leadership capacity within the flower and foliage industry
  • helping to protect the flower industry from biosecurity risks.

Let’s hear your ideas. Contact your industry organisation to discuss this opportunity.

The choice is ours.

Lodi Pameijer
President, Flower Association of Queensland Inc.