PN744

VICE PRESIDENT CATANZARITI: Thank you. I'll see whether there are any change in appearances. I note that from Gayndah Packers, they have sought leave today which is fine. Any other appearances? Yes, Mr Angelopoulos.

PN745

MR T ANGELOPOULOS: If the Commission pleases, I seek permission to appear on behalf of the Voice of Horticulture, Angelopoulos, initial T.

PN746

VICE PRESIDENT CATANZARITI: Thank you, Mr Angelopoulos, permission is granted. We will then do some housekeeping matters. We received overnight and then this morning a more recent version of the timetable. Mr Bourke, is that an agreed permission?

PN747

MR BOURKE: Your Honour, it is agreed and we could just update that a bit, Your Honour. If Your Honour goes to page 2 for Wednesday, 5 July. It's now confirmed that no party requires any of the three NUW witnesses for cross-examination and my learned friend for the NUW indicates that his opening statement, he intends to make on the Tuesday, 4 July, which at the moment would vacate Wednesday, 5 July, subject to the possibility that there may be a supplementary statement from Ms Rowt which the parties would have to consider whether that would simply be tendered or there'd be need to be any cross-examination.

PN748

VICE PRESIDENT CATANZARITI: Yes.

PN749

MR BOURKE: At the moment, we doubt it. And just on that, as we see the case, your Honour, it's not a credit case, but all parties come before the Commission to describe the situation as best as they can. We have proposed the view, I think, as indicated yesterday for the Thursday. Could we go to the itinerary for the view which we have circulated.

PN750

VICE PRESIDENT CATANZARITI: Yes, I read that overnight. Just let me find that.

PN751

MR BOURKE: Just a couple of points there and that is that the NUW are commencing discussions with Mt Barker to seek approval for the inspection in that location. That's yet to be confirmed.

PN752

VICE PRESIDENT CATANZARITI: Just on the view, can we just make these observations. The Bench has had a discussion amongst itself. To ensure that it goes smoothly, the Bench will fly upon the evening of 5 July. The question we have is, really, do we need to actually meet at the airport or somewhere else on the morning of 6 July? Is that the right place to meet?

PN753

MR BOURKE: I would have thought we would meet at a designated time at Mt Barker.

PN754

VICE PRESIDENT CATANZARITI: All right. Is it proposed that we make ourselves available or is there a bus organised? What is the process for all these people getting to Mt Barker?

PN755

MR BOURKE: The way I contemplated it was that - - -

PN756

VICE PRESIDENT CATANZARITI: Because there's a lot of us here.

PN757

MR BOURKE: Yes. The way I contemplated it was that the Commission would organise, say, a hire car with your own driver and all the parties otherwise organise their own separate transport and we have designated times to, one, get to Mt Barker. The next step is - - -

PN758

VICE PRESIDENT CATANZARITI: All right, well, now we understand that. If that's the way it's contemplated, in the absence of any advice to the contrary, that's what we will do from our end. Having said that, also having checked the flights to make it sensible, we want to be back at Adelaide Airport at 5 o'clock. Sorry, before then. We want to be at Adelaide Airport about 4 o'clock.

PN759

MR BOURKE: Yes.

PN760

VICE PRESIDENT CATANZARITI: So maybe we start earlier at 8.30 or something at Mt Barker.

PN761

MR BOURKE: Or is 8 o'clock - - -

PN762

VICE PRESIDENT CATANZARITI: Or even 8 o'clock doesn't worry the Bench.

PN763

MR BOURKE: We might adjust the itinerary so to start at 8 o'clock.

PN764

VICE PRESIDENT CATANZARITI: Yes, that would be better.

PN765

MR BOURKE: Yes, and we factored in that you might be flying in on the morning, but if you are flying on the day before, that changes the situation.

PN766

VICE PRESIDENT CATANZARITI: There could be a fog outbreak or anything.

PN767

MR BOURKE: Yes.

PN768

VICE PRESIDENT CATANZARITI: And my experience doesn't favour me. Planes get cancelled and is thought if we don't do the inspection on that day, regrettably, we will not be doing the inspection for months - - -

PN769

MR BOURKE: Yes, right, and can I just flag that - - -

PN770

VICE PRESIDENT CATANZARITI: Which would frustrate the case.

PN771

MR BOURKE: The most important item, lunch at Mitolo, we would intend that we would organise the lunch. People wouldn't have to bring their own lunch.

PN772

VICE PRESIDENT CATANZARITI: We won't bring our sandwiches, Mr Bourke.

PN773

MR BOURKE: I know you all have moderate habits.

PN774

VICE PRESIDENT CATANZARITI: Potato pie?

PN775

MR BOURKE: Just one other matter while I'm on my feet, the first witness scheduled is Paul White. I think, without objection, just to be clear, Mr White, that is a statement filed by Zerella. It's not filed by us, but there's no representation for Zerella so - - -

PN776

VICE PRESIDENT CATANZARITI: So when it says led by counsel, you are not actually - you are just putting - you are not actually there as his counsel as such.

PN777

MR BOURKE: Correct.

PN778

VICE PRESIDENT CATANZARITI: Yes.

PN779

MR BOURKE: It's just to assist the process.

PN780

VICE PRESIDENT CATANZARITI: Yes.

PN781

MR BOURKE: And just while I'm here, I apologise for the absence of the supplementary statement of Paul Colquhoun behind tab 10 of the opening folder and we have copies of that statement hole-punched, if that could be put in behind tab 10.

PN782

VICE PRESIDENT CATANZARITI: Thanks.

PN783

MR BOURKE: With the leave of the Commission, we'll circulate to your Honour's associate a revised itinerary having regard for an 8 o'clock start.

PN784

VICE PRESIDENT CATANZARITI: Yes. Any other housekeeping matters from anybody else?

PN785

MR ROGERS: Yes, your Honour. There is just one small matter. You will see on 4 July, Mr Philip Turnbull is scheduled to be called by telephone at 2 pm. Mr Turnbull is actually in Italy. We are currently confident that he will be available at 3 pm which is what the old timetable, as it were, said.

PN786

VICE PRESIDENT CATANZARITI: Yes.

PN787

MR ROGERS: But we haven't been able to get in contact with him to confirm that he will be available at two.

PN788

VICE PRESIDENT CATANZARITI: When we get a final timetable, you and Mr Bourke can sort out just one document with the time. 3 o'clock would be no problem.

PN789

MR ROGERS: Thank you, your Honour. And it's acceptable for him to give his evidence via telephone. I understand that there's no objection.

PN790

VICE PRESIDENT CATANZARITI: Yes.

PN791

MR ROGERS: Thank you, your Honour.

PN792

VICE PRESIDENT CATANZARITI: Yes, that's fine. Yes, Mr Smith.

PN793

MR SMITH: Yes, your Honour, the Bench will recall that yesterday, the employer parties were asked to try to reach agreement on the wording of a draft determination which removed those items that were not being pressed. We have done and if I could just hand up a copy of that.

PN794

VICE PRESIDENT CATANZARITI: Yes. I will just make that AIG3 for ease.

EXHIBIT #AIG3 DRAFT DETERMINATION

PN795

MR SMITH: Thank you.

PN796

VICE PRESIDENT CATANZARITI: All right, there being no other housekeeping matters, then we will continue, Mr Bourke.

PN797

MR BOURKE: Thank you. If the Commission pleases, I call Paul White who will take the oath.

PN798

THE ASSOCIATE: Please state your full name and address.

PN799

MR WHITE: Paul William White, (address supplied).

<PAUL WILLIAM WHITE, SWORN [10.22 AM]

EXAMINATION-IN-CHIEF BY MR BOURKE [10.22 AM]

PN800

MR BOURKE: If the Commission pleases.

PN801

Mr White, would you please state your full name?‑‑‑My name is Paul William White.

PN802

Your professional address?‑‑‑Johns Road, Virginia, South Australia.

PN803

Your occupation?‑‑‑General manager.

PN804

Have you made a statement in respect of these applications dated 20 December 2016?‑‑‑Yes, I have.

PN805

Can we provide you with a copy of that statement?‑‑‑Yes, please.

*** PAUL WILLIAM WHITE XN MR BOURKE

PN806

Is that the statement you've made?‑‑‑Yes, it is.

PN807

Have you recently re-read that statement?‑‑‑Yes, I have.

PN808

Can I first take you to paragraph 33? You refer to negotiations regarding an agreement. Has that agreement now been approved?‑‑‑Yes, it has.

PN809

Approved on 21 March 2017?‑‑‑Yes, that's correct.

PN810

Can I take you to paragraph 41, page 8, 41.1? On the last where it says, "Wholesale store is the first available," do you wish to insert the words, "Stop," after "the"?‑‑‑Yes, please.

PN811

Before the words: "Farm gate"?‑‑‑Yes, please.

PN812

Subject to those matters - - -

PN813

VICE PRESIDENT CATANZARITI: Can you just read that to me again back, Mr Bourke?

PN814

MR BOURKE: Sorry.

PN815

VICE PRESIDENT CATANZARITI: The wholesale store is?

PN816

MR BOURKE: "Is the first available" and then after that insert the word, "Stop," after - - -

PN817

VICE PRESIDENT CATANZARITI: Delete "farm gate"?

PN818

MR BOURKE: No, no, keep "farm gate".

PN819

VICE PRESIDENT CATANZARITI: Right.

PN820

MR BOURKE: So it should read: "Wholesale store is the first available stop after the farm gate." Is that correct, Mr White?‑‑‑Yes, it is.

*** PAUL WILLIAM WHITE XN MR BOURKE

PN821

Subject to those matters, is your statement true and correct?‑‑‑Yes, it is.

PN822

I tender that statement if the Commission if the Commission pleases.

PN823

VICE PRESIDENT CATANZARITI: Yes. To make it clear, we will just make it exhibit Z1.

EXHIBIT #Z1 STATEMENT OF PAUL WILLIAM WHITE DATED 20/12/2016

PN824

MR BOURKE: Thank you.

PN825

Just one other matter which we have foreshadowed to the parties, going back to 41.1, if you have that, Mr White, you make reference to Zerella have a wholesale store. Can you just explain what you are referring to there?‑‑‑Yes, in South Australia there's a wholesale market which we have got a store at. That wholesale market buys produce from growers and then sells that produce onto retailers. Retailers could be independent supermarkets. It could be independent retailers, fruit and veg stores. Because we're vertically integrated, we're the grower and we also own the wholesale store. So that would operate from midnight until early in the morning. They would go there early, get their produce and then take it back to their store to sell during the day.

PN826

VICE PRESIDENT CATANZARITI: So just so I follow, there is a wholesale store and a wholesale market or is it the same?‑‑‑We have a wholesale store within the wholesale market.

PN827

When you say "store", is it a store or is it a store as in a big store, the market? When I think of a market, like the Queen Victoria Market in Melbourne, for example, there are multiple stalls in the market. I'm just trying to understand what you're talking about in terms of size?‑‑‑Yes, so in this market there would be a hundred-plus stores. We own one of those stores and the store would be 150 square metres in size.

PN828

I follow.

PN829

MR BOURKE: Just remain there, please.

PN830

VICE PRESIDENT CATANZARITI: Yes, this is going to be Mr Bakri first?

*** PAUL WILLIAM WHITE XN MR BOURKE

PN831

MR BAKRI: Yes, thank you, Vice President.

CROSS-EXAMINATION BY MR BAKRI [10.27 AM]

PN832

MR BOURKE: Mr White, I have a few questions for you today. In your statement, you say that 90 per cent or more of produce is washed, packed and despatched the same day. Now, the produce that is not despatched on the same day gets stored in a cool room, does it?‑‑‑For potatoes and carrots, it would be stored in a cool room. For onions, it would be dry-stored.

PN833

In relation to potatoes and carrots which are stored in the cool room, they could stay there for a few days; is that right?‑‑‑Yes, they could stay there for a few days. Obviously, we're trying to sell fresh produce so they do turn over very quickly.

PN834

Sometimes three or four days?‑‑‑Yes, potentially, yes.

PN835

And sometimes longer?‑‑‑Unlikely.

PN836

But sometimes?‑‑‑On very rare occasions maybe.

PN837

On rare occasions, I understand?‑‑‑Yes, yes.

PN838

In relation to onions, they can be stored for a much longer period of time. How long are onions stored for?‑‑‑Onions are a little bit different. So when onions are harvested, they have to be cured, they have to be dried, and so they're stored in open sheds for good ventilation. That's for the short to medium-term consumption. Longer term storage is within cool rooms, but then once it's taken out of those cool rooms and put across the packing line, then again it's sold within days, the same day or very shortly afterwards.

PN839

If you could please step the Commission through that process. So, to cure them, to dry them out, does that occur in the Virginia facility?‑‑‑No. Our onion packing shed and our storage is at Parilla. Parilla is about two hours from Adelaide. We've got two packing sheds, one at Virginia and one at Parilla.

PN840

I understand. But it is on the same property as the packing shed?‑‑‑It's the same property as the packing shed and the farm is at Parilla.

*** PAUL WILLIAM WHITE XXN MR BAKRI

PN841

How long are onions stored in the cool room for before they are sold to customers?‑‑‑So, we would harvest onions around January to March and the best onions we put into storage for the latter part of the year. So they would come out of storage between July and October.

PN842

So they would sit there for that entire period?‑‑‑Yes, that's correct. Yes, they're cured and then they go into the cool room, yes.

PN843

I want to understand a bit more about how it works when you receive orders and how you meet those orders from clients. The amount of notice you are given by a client about an order for certain produce varies, doesn't it?‑‑‑Yes, it does.

PN844

You would agree that you are often given a few days' notice of orders?‑‑‑So with the major retail chains, they would give you a forecast for the week and then those orders would get updated on a daily basis, up and down depending store sales. But the final version of the order is literally on the day of despatch usually. So it's very close to. If they're going to be despatched firs thing in the morning, you might get the final order that night, or it could happen early in the morning.

PN845

What happens with the final order? Is it clarified exactly how much produce which can go up and down a bit? But you have advanced notice of how much product is required; yes?‑‑‑For the major retailers, we have a forecast, as I said, but that forecast can change because they've either sold more or less or because another packing shed hasn't been able to meet their needs and so they would revise their orders. Whereas with the market, there's no forecast of orders. We bring in what we anticipate we'll be able to sell on that day.

PN846

You would agree that there are some key differences between the work undertaken on the farm and in the packing sheds?‑‑‑Look, obviously there's - on the farms you're growing the produce. Whereas in the shed, you're packing it. But there are a lot of similarities. For example, grading is a common function both within the farms for seed production and also within the packing shed. A grading table, it can either be on wheels in a farm being moved around or it can be fixed in a packing shed. But it's the same function and that enables us to move labour from the farm to the packing shed back to the seed cutting, seed grading.

PN847

Mr White, if the grading is performed on the farm and not in the packing shed, am I correct in understanding that it doesn't need to be done again? Once it's done, that's it?‑‑‑No, that's not correct.

*** PAUL WILLIAM WHITE XXN MR BAKRI

PN848

You would agree that the work in the packing sheds is more skilled work than the work on the farm?‑‑‑No, no, within the - within the packing shed there can be a series of grading tables. Some of them we would put newer staff on because it's at the front end of that process and towards the back end of the process you would have more experienced graders. But it's the same function and all those people would get rotated or could be rotated to the grading on the farms or in the seed cutting and seed preparation.

PN849

But you'd agree that some of the work in the packing sheds requires the operation of machinery?‑‑‑Yes, well, there's machinery used on the farm and also in the packing shed, yes, yes.

PN850

Some of the machinery in the packing sheds can be complicated to use. Would you agree with that?‑‑‑Yes, I would agree that the machinery in the packing shed is complicated, but the machinery in the farm is also complicated. It's - there's more high-tech machinery coming all the time. It's just the way the industry is going.

PN851

Am I correct in understanding that employees engaged at the Virginia packing shed don't generally work on the farm? Is that correct?‑‑‑Yes, it happens - that's correct. It happens more at Parilla because it's more of a remote location and so it's hard to get workers so you tend to rotate them between the different functions and also the other thing that can cause it to happen more often is when the days are shorter, so when there's less work available, you make up a composite day by having the people work partly in the farm and partly in the shed which is why it can also happen at Virginia sometimes as well.

PN852

Yes, but if you come back to Virginia, it's fairly uncommon at Virginia, is that your evidence?‑‑‑Yes, very. It's definitely uncommon at Virginia.

PN853

Likewise, those employees who work on the farms around the Virginia packing shed don't perform work in the packing shed generally?‑‑‑No, it's more likely that the farm workers would come and help in the shed because as their season ramps up or ramps down to fill up their day, they would come into the shed. So, an example could be that they would come into the shed and drive a forklift or they could come in and repair wooden bins sort of thing. So, we tend to fill up the farm work more in that direction, if that makes sense.

PN854

Going back to the Parilla packing shed which you raised, you have given evidence that workers are more regularly rotated between farm and packing shed duties at Parilla. You would accept that workers at the Parilla packing shed are primarily engaged to work in the packing shed. Do you agree with that proposition?‑‑‑Yes, that's correct, yes.

*** PAUL WILLIAM WHITE XXN MR BAKRI

PN855

Any work they perform on the farm is secondary work?‑‑‑Yes, so they can - they can be based in the packing shed and then moved out to the farm as needed or they could be based in the farm and move into the packing shed as required.

PN856

Just confining yourself to the workers that perform work generally in the packing shed and move out to the farm, that work is for limited periods of time; yes?‑‑‑Yes, yes.

PN857

Generally, you would agree that it's fairly irregular work?‑‑‑If there's not a full day's harvesting in the farm then those people want to do a full day's work, you're living in Parilla which is a remote location, they're living there to earn income and so they would supplement that farm income by doing more hours in the packing shed. They would get a full day's work.

PN858

Yes, but it happens from time to time. It's fairly irregular?‑‑‑No, it's quite regular at Parilla that some people work in both locations.

PN859

You would accept that Zerella has received some benefits from having centralised packing facilities?‑‑‑Definitely.

PN860

These benefits have included financial benefits; yes?‑‑‑A packing shed consists of a lot of equipment. That equipment is very expensive, so if you had to duplicate a packing shed on each of the different farms, it would be not financial.

PN861

I just want to ask you one more question just in relation to the work that's done in the packing shed. You would agree with me that the task of a grader is to assess the produce to determine the quality of that product?‑‑‑The grading roles can vary. Sometimes the graders can be there to not even assess the product. They're looking there to remove waste from the product at the commencement of the production line. So those guys are actually focussed on things other than the product. Whereas towards the back of the process, then they are looking at the quality, the size of the product.

PN862

Looking for defects in quality; yes?‑‑‑Yes, they're looking for, yes, to grade that product versus the specification for the product line that they're producing.

*** PAUL WILLIAM WHITE XXN MR BAKRI

PN863

Mr White, the grading that occurs on the farm which you referred to earlier, that's more directed at identifying and discarding the waste product; is that correct?‑‑‑Yes, that's similar - as I said, that's similar to the start of the production process within the shed where you're looking to remove the waste and foreign objects that could be carried through the process. So it's similar to the start of the process in the shed.

PN864

So is it fair to say that the grading that occurs in the shed is more directed to looking for defects in quality, whereas the grading that occurs on the farm is more directed towards identifying and discarding waste product?‑‑‑Yes, as I said, within the packing shed, they're doing both functions, but within the farm they are focussed on removing the waste.

PN865

Thank you, Mr White. No further questions.

PN866

VICE PRESIDENT CATANZARITI: Thank you. Mr Crawford.

PN867

MR CRAWFORD: Thank you, your Honour.

CROSS-EXAMINATION BY MR CRAWFORD [10.39 AM]

PN868

MR CRAWFORD: Mr White, I'm appearing for the Australian Workers' Union. Can I please get you to turn to paragraph 37 of your witness statement? So is it correct that Zerella grows potatoes, carrots and onions?‑‑‑That's correct.

PN869

At paragraph 37, in the second sentence, you indicate Australian grown produce could not compete with imported produce unless companies such as Zerella can retain cost competitiveness; is that correct?‑‑‑That's correct.

PN870

Is it correct that potatoes cannot be exported from Australia and they cannot be imported into Australia?‑‑‑Well, they are. They are exported from Australia and the imports into Australia are not fresh produce, but you can have processed potatoes coming into Australia. We grow fresh produce and processed produce.

PN871

In terms of fresh potatoes, can they be exported from Australia?‑‑‑Yes, they can.

PN872

Can they be imported into Australia?‑‑‑Not as a fresh product.

PN873

Is it correct that in terms of fresh carrots, Australia's export of fresh carrots far exceeds the import of fresh carrots into Australia?‑‑‑Yes, that's correct.

PN874

In terms of onions, is it also correct that for Australia, the export of fresh onions far exceeds the import of fresh onions?‑‑‑That's correct.

PN875

Nothing further, thank you.

*** PAUL WILLIAM WHITE XXN MR CRAWFORD

PN876

VICE PRESIDENT CATANZARITI: Thank you.

PN877

MR BOURKE: No re-examination.

PN878

VICE PRESIDENT CATANZARITI: Thank you. Mr White, you're excused.

<THE WITNESS WITHDREW [10.41 AM]

PN879

VICE PRESIDENT CATANZARITI: We'll take a short adjournment to allow the video be set up for the next witness, as I understand.

SHORT ADJOURNMENT [10.41 AM]

RESUMED [10.54 AM]

PN880

VICE PRESIDENT CATANZARITI: Yes, Mr Angelopoulos.

PN881

MR ANGELOPOULOS: Your Honour, I call Mr Dollisson. Mr Dollisson wishes to be affirmed.

PN882

THE ASSOCIATE: Would you please your name and address.

PN883

MR DOLLISSON: John Dollisson, (address supplied).

<JOHN ANTHONY DOLLISSON, AFFIRMED [10.54 AM]

EXAMINATION-IN-CHIEF BY MR ANGELOPOULOS [10.54 AM]

PN884

MR ANGELOPOULOS: Mr Dollisson, can you state your full name to the Commission?‑‑‑John Anthony Dollisson.

PN885

Your business address?‑‑‑The business address is 166 Abbotsford Street, North Melbourne, Victoria.

PN886

Your current occupation?‑‑‑Current occupation is the CEO of Vertigo Specialist High Access Services.

*** JOHN ANTHONY DOLLISSON XN MR ANGELOPOULOS

PN887

Mr Dollisson, did you prepare a witness statement in this matter?‑‑‑I did back in December last year.

PN888

Have you got a copy of the witness statement there?‑‑‑I do.

PN889

Is it the one dated 23 December 2016, the last page?‑‑‑That is correct.

PN890

With the witness statement, you also attached a submission paper from Growcom called the Agriculture Competitiveness Issues Paper, April 2014?‑‑‑Correct.

PN891

Are there any amendments you wish to make to your witness statement, Mr Dollisson?‑‑‑Yes, there are three. In the opening paragraph, the address should change to 166 Abbotsford Street, North Melbourne. And secondly, after the first comma, "Deputy Chair of the Voice of Horticulture until May 2017," and I am currently employed as the CEO of Vertigo Specialist High Access Services. There is a second - - -

PN892

Are they the only amendments, Mr Dollisson?‑‑‑Two other typographical errors. In clause 7, I've spelt "grown" incorrectly, about the fifth or sixth word down. It should be g-r-o-w-n.

PN893

Yes, thank you?‑‑‑And in paragraph 15, "Costco" should be C-o-s-t-c-o.

PN894

Thank you. That's all, Mr Dollisson? They're the only amendments?‑‑‑That's all.

PN895

Yes. I would like to tender the witness statement of Mr Dollisson together with the Growcom issues paper of April 2014.

PN896

VICE PRESIDENT CATANZARITI: VH1.

EXHIBIT #VH1 STATEMENT OF JOHN ANTHONY DOLLISSON TOGETHER WITH GROWCOM ISSUES PAPER OF APRIL 2014

PN897

MR ANGELOPOULOS: Thank you.

PN898

VICE PRESIDENT CATANZARITI: Thank you.

PN899

MR ANGELOPOULOS: I have no further examination of Mr Dollisson.

PN900

VICE PRESIDENT CATANZARITI: Thank you, Mr Angelopoulos.

*** JOHN ANTHONY DOLLISSON XN MR ANGELOPOULOS

PN901

MR BAKRI: There is no cross-examination from me.

PN902

VICE PRESIDENT CATANZARITI: Thank you. Mr Crawford.

PN903

MR CRAWFORD: Thank you, your Honour.

CROSS-EXAMINATION BY MR CRAWFORD [10.57 AM]

PN904

MR CRAWFORD: Good morning, Mr Dollisson, can you hear me?‑‑‑Yes, I can. Morning.

PN905

Good morning. I think we've met before?‑‑‑We have.

PN906

Have you been provided, Mr Dollisson, with a copy of a document titled: "Australian vegetable-growing farms: an economic survey, 2014-15 and 2015-16"?‑‑‑Yes, I have. I was advised that you might want to question me last night, so I read it and I have just been given a copy of the document to have with me.

PN907

Thank you, Mr Dollisson. Your Honour, I would like to tender that document. I've got copies here.

PN908

VICE PRESIDENT CATANZARITI: Yes, go ahead. AWU4.

EXHIBIT #AWU4 AUSTRALIAN VEGETABLE-GROWING FARMS: AN ECONOMIC SURVEY, 2014-15 and 2015-16

PN909

MR CRAWFORD: Mr Dollisson, would you accept that there has been increasingly in recent years in the horticultural industry a growth in the number of large businesses as opposed to, you know, smaller family farms?‑‑‑There has certainly been an increase in the number of or a consolidation within the industry.

PN910

Including quite large publicly listed companies like Costa Group and Select Harvests; is that correct?‑‑‑Yes, there are a number of - not a large number, but a number of publicly listed companies.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN911

Can I refer you to paragraph 21 of your statement? You refer to Australian horticulture having an opportunity to be the fastest growing agricultural export industry you say if labour flexibility is maintained. So do you accept that there are significant growth opportunities for the horticulture industry in Australia for the future?‑‑‑There are within specific crops. Remember that horticulture covers some 100 different crops and we have seen significant growth in table grapes, in citrus and in almonds. Of course, there are a lot of horticulture industries where there is no export potential. They are basically domestic crops such as bananas, nursery and flowers.

PN912

But leaving exports aside for a moment, just in terms of the horticulture industry as a whole, firstly, do you accept that there has been considerable growth in recent years?‑‑‑There has been considerable growth in exports in recent years, but the industry is growing at a reasonable pace.

PN913

There are certainly growth opportunities for the future for the industry viewed as a whole?‑‑‑Within the export areas, yes, but basically the domestic consumption is pretty well satisfied with the existing production and it just rises with population. It's only those industries where there are significant export opportunities where you can see long-term growth.

PN914

Can I refer you to paragraph 5 of your statement where you refer to, I think the attached Growcom report and indicated that labour costs in the industry can represent as much as 50 per cent of overall operating costs; is that right?‑‑‑That's correct.

PN915

Can I now take you to the document marked AWU4 which is the survey? Do you have that?‑‑‑I do.

PN916

Can you please turn to page 9?‑‑‑Page?

PN917

Nine?‑‑‑Nine, okay.

PN918

Do you have that?‑‑‑I'm there.

PN919

Do you see there is tables for 2013/14, 14/15 and 15/16. Are you on page 9 of that document?‑‑‑Yes, page 9, yes, I do have it now. I see, yes, the actual figures for 13/14, the preliminary figures for 14/15 and the estimated figures for 15/16.

PN920

Yes, quite correct. Can you see about halfway down there are total cash cost figures for those respective periods?‑‑‑I can.

PN921

Can you see further up under the bolded heading "Cash costs" there is a hired labour costs component identified?‑‑‑Correct.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN922

In addition, back further down on the page there is a contract paid component, do you see that?‑‑‑I do.

PN923

As I understand it, the contracts paid component will include labour hire. If a grower contracts with the labour hire provider, the amount they pay will be captured in the contracts paid section?‑‑‑That's correct.

PN924

When you have a look at the total cash cost figures and then even if you add the contracts paid and the hired labour figure, we're not really getting all that close to 50 per cent, are we?‑‑‑No, but that's not the only labour that is employed on the farm. If I can refer you to page 2 of this report - sorry, of the addendum to this report, page 35, you will notice that total cash costs under the last paragraph on page 35, you will notice that total cash costs exclude owner/manager costs, partner costs and other family labour costs and it's only when you look at this table you just referred me to when you look at farm business profit are those figures included. If you put an appropriate figure on that owner, operator, father, mother and probably a son or daughter, you will find that the labour costs will probably well exceed 50 per cent.

PN925

Thank you, Mr Dollisson. So, I mean, I guess regardless of whether it's a figure around 30 per cent or 50 per cent, it is reasonably clear that labour costs in the horticulture industry do make up a substantial proportion of operation costs. That is clear, isn't it?‑‑‑That's very clear. In fact, there is a table on page 12 in that report which shows the significance of hired labour.

PN926

At paragraph 19 of your statement, you talk about the fact that it's not possible to mechanically harvest a lot of fruit and vegetables in Australia at the moment; is that correct?‑‑‑Not only in Australia, but around the world, that's correct.

PN927

That means rather than using machinery, you have to employ people to actually pick the fruit and vegetable; is that right?‑‑‑Correct. Some industries like nuts where they can use tree shakers, it's happening and it will happen over time, but at the moment, yes, we have to employ people to do the harvesting.

PN928

I guess the lack of an ability to use machinery necessitates a higher labour cost figure in terms of that picking work, doesn't it?‑‑‑Correct.

PN929

At paragraph 12 of your statement, you talk about how sometimes different legal entities can be created and you say often this is required by funding entities to ensure security of their loans; is that correct?‑‑‑That's correct.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN930

Is it correct that banks or other lenders can be reluctant to lend money to a farm operator because of the inherent risk involved in running a farm?‑‑‑Correct, and weather issues and the vulnerability of agriculture, correct.

PN931

Yes, because a farmer could plant all their crops and then there could be a fire or a flood or a drought and they would lose all that money they have invested in the land, wouldn't they?‑‑‑They'd lose the money invested in the crop. Obviously, they still have the money invested in the land. The land is always saleable.

PN932

Yes, true. That's a good point. In terms of the weather, on a farm most of the work is performed or a lot of the work is performed outdoors, isn't it?‑‑‑Most of the work in horticulture is performed outdoors except when you get into the nursery industry and some of the more modern glasshouses, particularly tomato processing, et cetera.

PN933

So if it's raining, it's a difficulty on a farm. It's hard to perform work if it's raining; is that right?‑‑‑That's correct, and it's potentially dangerous if you're using mechanical equipment as well.

PN934

That's, I guess, an additional difficulty that farmers face in terms of running a farm?‑‑‑Correct.

PN935

In contrast to all of that farm work, Mr Dollisson, if there is a facility that is not on a farm that is used just for processing and packing functions, do you accept that those facilities will generally be highly mechanical, quite sophisticated?‑‑‑Certainly in the bigger or the larger members in the industry, that's the case. For the vast majority of horticultural farms, they are small family farms, often run by the family labour with some supporting labour which may work to harvest the fruit and then post the harvest work to help package or process the fruit.

PN936

But for these larger facilities that are having produce from a number of sites brought in, they will generally be quite sophisticated mechanical operations, won't they?‑‑‑The bigger ones are certainly that.

PN937

In contrast to someone operating a farm, there is a much greater ability in these facilities to use machinery as opposed to pure person-labour, isn't there?‑‑‑There is in the bigger facilities, correct.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN938

Is it correct that in these larger facilities, in particular, but probably any facilities, they will be indoors, they will be covered?‑‑‑They are generally covered particularly with the mechanical equipment.

PN939

So if it's raining, work could still occur in that facility, couldn't it?‑‑‑Correct, and often if it's raining, the employees that were going to work in the harvesting will come in and work on the processing line.

PN940

Would you accept that it's easier for those businesses operating that type of mechanised processing facility or packing facility that's getting produce from a number of different sites, it's easier for those businesses to secure loans because there's less risk involved for the operation of that business, would you accept that?‑‑‑No, the risk is almost the same. If there's a hail storm and there's no fruit to process, then it doesn't matter whether you've got a factory that processes or you're harvesting, there's no fruit. So the throughput is still affected by the weather or the agricultural circumstances. There are very few facilities that process fruit from different climatic areas. They're generally within the one climatic area. So if there's bad weather and the crop is affected, then the processing facility will have the same problem.

PN941

In your statement when you talked about - and I've already taken you to this - that often businesses create separate legal entities and part of the reason is to do with security for loans. Why are they actually creating these different entities?‑‑‑It could be family structure. It could be loans. For example, cool rooms are a very important part of horticulture and fruit can be stored in there for quite some time and they can be used for other forms of storage. If there isn't fruit, there's no reason why you can't store wine or a range of other products in there. They're less susceptible to the vagaries of the climate.

PN942

Can I take you back to the economic survey document? Can you please turn to page 30?‑‑‑Yes.

PN943

Do you see that it reads: "The vegetable-growing industry definition is based on the Australian and New Zealand Standard Industrial Classification, ANZSIC"? Do you see that?‑‑‑I do.

PN944

Then in the second paragraph it reads: For this survey, ABARES selected vegetable farms in the sample from units classified in ANZSIC 0122 Vegetable growing (under cover) and 0123 Vegetable growing (outdoors)." Do you see that?‑‑‑I do, yes.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN945

The data in this document would be confined or is confined to businesses that grow vegetables, isn't it?‑‑‑It's confined to farms that grow vegetables, but if I can refer you to page 2 of the introduction, unfortunately they can't split the vegetable production from other production on the farms. So included in these figures in both the income and expenses are other agricultural or other activities on the farm. And if you actually go to page 5 of the report, it gives you a breakdown of the area planted to vegetables and the area planted to other crops and you will see that in every state of Australia the area planted to other crops is bigger than the area planted to vegetables. So it's not just vegetable production. You will see there is cattle, there's sheep and a number of other activities going on the farm. Unfortunately, they can't differentiate from the accounts of small farms, just the vegetable production.

PN946

But a business who does not grow any vegetables would not be classified as either vegetable growing undercover or vegetable growing outdoors, would it, logically?‑‑‑No, it would not. It's only those that are obviously primarily vegetable production. All I'm saying is that all these figures do include production from other crops or grazing or sheep and cattle, et cetera.

PN947

Yes, I accept that. If there is a farm that is growing vegetables and they do their own packing and processing, this report would capture all their income, et cetera, wouldn't it?‑‑‑It would capture all their income from all their activities, vegetables included, correct.

PN948

But in contrast, if there is a business that does not grow any vegetables themselves, they only receive, pack processed vegetables, they wouldn't be - that data wouldn't be within this report, would it?‑‑‑I couldn't answer that to be honest with you. I have read the appendix, but I couldn't answer that.

PN949

Just finally, Mr Dollisson, you have talked about risk for small business in some parts of your statement. Do you accept there is a risk for small farmers who grow their own fruit and vegetables and have their own less sophisticated packing and processing facilities? Do you see that there is a risk in terms of them not being able to compete with huge massive business operations who can, you know, have a centralised facility in the future?‑‑‑Yes and no. It's a question of how you segment the market. Often the small vegetable or fruit grower will sell at a local market or will sell at a wholesale market and doesn't really compete with the bigger operators that tend to sell to the Coles and Woolworths and the ALDIs and the Costcos. So it depends in the market niche, but it is hard when price is driven by the bigger operators if you want to get into the Coles and Woollies and ALDI which represent about 70 per cent of the market. But there is a sizeable niche in the fresh market, local market, wholesale market and local greengrocers that they can compete in quite effectively.

*** JOHN ANTHONY DOLLISSON XXN MR CRAWFORD

PN950

For example, if I run a potato farm and I have got a packing and processing facility on site, am I seriously going to be able to compete with a business like Mitolo who is receiving potatoes from a number of different sites that has a highly sophisticated facility? I mean, there is no way a small business like that could compete with Mitolo, could it?‑‑‑Different markets. For example, there are apple and pear producers in New South Wales that grow and pack their own vegetables and they sell them at the Paddy's Market and the other market out the back of Windsor and they sell them at a better price and make a better margin than the larger operators because they do it all themselves. So they're playing in a different niche of the market and, yes, they can be competitive, but they'll never be competitive up against a Woolworths contract or a Coles contract.

PN951

Additionally, are you somewhat familiar with the Horticulture Award?‑‑‑Reasonably familiar.

PN952

Would you accept that in comparison with other awards, the Horticulture Award provides quite favourable conditions for employers?‑‑‑Look, I think they're reasonable conditions for employers, yes.

PN953

Would you accept that the reason there is quite a lot of flexibility and a number of quite generous provisions for employers in the Horticulture Award is that it is taking into account the difficulties and risks that farmers face?‑‑‑And the weather, of course, yes, agreed.

PN954

Nothing further, thank you.

PN955

SENIOR DEPUTY PRESIDENT SAMS: Yes. Mr Dollisson, apart from family labour, do you know the proportion of labour that might be local vis-à-vis backpackers or 457 visa holders?‑‑‑Look, I couldn't give that figure across horticulture. In terms of harvesting, it's very, very significant in terms of backpackers. 457 visas tend to be used for longer term more technical or specialist skills and, again, you'd have to stratify the industry looking at the larger players, the mid-size players and the smaller players.

PN956

MR ANGELOPOULOS: I just have one re-examination question.

RE-EXAMINATION BY MR ANGELOPOULOS [11.19 AM]

PN957

MR ANGELOPOULOS: Mr Dollisson, can I take you to page 30 of the Australian Vegetable-Growing Farms Report which is marked as AWU4 and the last paragraph?‑‑‑Yes.

PN958

It's been made clear that this is a report primarily about vegetable growers and not across the whole horticulture industry; that's correct?‑‑‑Correct.

*** JOHN ANTHONY DOLLISSON RXN MR ANGELOPOULOS

PN959

The opening sentence of the bottom paragraphs says: "A sample of 304 vegetable-farming businesses was selected from a total population of 2467 commercial vegetable-farming businesses. New South Wales, Victoria and Queensland have the largest number of commercial vegetable farms surveyed." And then it goes on - - -?‑‑‑I'll just turn the lights back on. I've just gone in the dark, sorry. Here we go.

PN960

You may have to have you waving your arms in the air every so often, Mr Dollisson, so you don't get switched off again?‑‑‑I thought I was processing mushrooms. It's all right.

PN961

Then it continues to say that Northern Territory and the Australian Capital Territory have been excluded. Have you attempted to do any calculation of what 304 represents out of a total of 2467 farms?‑‑‑Look, it's a small sample. It's more than 10 per cent. The concerning exclusion is Northern Territory which is actually a significant vegetable producer, but, look, ABARES have obviously done their analysis and confirmed in their view that this is a representative sample.

PN962

Thank you. That's all.

PN963

VICE PRESIDENT CATANZARITI: Thank you, Mr Dollisson, you're excused.

<THE WITNESS WITHDREW [11.21 AM]

PN964

VICE PRESIDENT CATANZARITI: Are we ready for the next witness, Mr Smith?

PN965

MR ANGELOPOULOS: If the Bench gives me permission, may I be excused?

PN966

VICE PRESIDENT CATANZARITI: Yes, you can be excused, Mr Angelopoulos?

PN967

MR ANGELOPOULOS: Thank you.

PN968

MR SMITH: If I could call Mr Bryan Robertson? He is just outside the door.

PN969

THE ASSOCIATE: Can you state your full and address.

*** JOHN ANTHONY DOLLISSON RXN MR ANGELOPOULOS

PN970

MR ROBERTSON: Bryan Andrew Robertson, (address supplied).

<BRYAN ANDREW ROBERTSON, SWORN [11.22 AM]

EXAMINATION-IN-CHIEF BY MR SMITH [11.22 AM]

PN971

MR SMITH: Good morning, Mr Robertson. Could you please state your full name?‑‑‑Bryan Andrew Robertson.

PN972

What is your current position?‑‑‑My current position is the technical manager at A-Gas Rural. So my statement will need to be amended to show that.

PN973

Do you have a copy of your statement in front of you?‑‑‑I certainly do.

PN974

You have indicated that you wish to make some amendments?‑‑‑Mm.

PN975

If you could point out what they are, please?‑‑‑Okay. In point 2, I would like to indicate that I am now the technical manager for A-Gas Rural which is a horticultural fumigation company. I finished and at statement 4 or point 4, I was employed as the executive officer for Hortex from May 2014 to April 2017.

PN976

Any other amendments?‑‑‑Point 8, just changing the text as in my role I was responsible. Point 9, the same thing, that in my role I interacted with vegetable growers. Point 13, whilst at Hortex, I was a member of the Primary Producers SA and the Horticultural Coalition in South Australia. Point 14, I was a director and board member of the Adelaide Plains Financial Services. I have currently ceased that role. And then point 47, just amending that since I am no longer member of the Horticultural Coalition, that needs to be changed to reflect that. But I am also on the panel of Biosecurity South Australia which is the quarantine body for South Australia and a part of PIRSA, Primary Industries Regional Development SA.

PN977

What does that body do?‑‑‑The Biosecurity South Australia, effectively, I represent the industry as an independent panellist for the horticultural sector based on my experience on the Northern Adelaide Plains with the vegetable growers and we basically review the quarantine requirements for the horticultural sector in South Australia.

PN978

Are there any other amendments to be made to the statement?‑‑‑No, that's it.

PN979

Apart from those amendments, is the statement true and correct?‑‑‑Yes, it is.

*** BRYAN ANDREW ROBERTSON XN MR SMITH

PN980

Thank you. No questions.

PN981

VICE PRESIDENT CATANZARITI: Exhibit AIG4.

EXHIBIT #AIG4 STATEMENT OF BRYAN ANDREW ROBERTSON

CROSS-EXAMINATION BY MR BAKRI [11.25 AM]

PN982

MR BAKRI: Mr Robertson, I have a few questions for you. You have given evidence that it's not economical or practical for vegetable producers to have washing packing facilities at every growing site. So you would agree with me, flowing on from that, you would agree with me that in your experience vegetable growers with centralised washing and packing facilities derives some benefits from the centralised facilities?‑‑‑Absolutely.

PN983

The benefits include economic benefits?‑‑‑Reducing their input costs, having access to skilled labour, also access to utility and utility costs are quite prohibitive at the moment and increasing in their impact. I think most people are aware that power and gas are one of the key topics at present amongst all of industry and the horticultural sector is not immune to that.

PN984

Thank you, Mr Robertson. In your experience, the amount of notice that vegetable growers are given from a client about an order for particular produce, it varies, doesn't it?‑‑‑You can often get anything from a couple of days to a couple of weeks' notice. Generally what happens is, say, with a supermarket or the big buyers, they will send through an order and that order can be amended within a couple of days from the original order. So, you don't have too much time to change.

PN985

It varies depending on the type of client; is that right?‑‑‑Yes, it does, yes.

PN986

Also, the type of produce?‑‑‑Yes.

PN987

And also varies from order to order how much notice you are going to get?‑‑‑Yes, that's right.

*** BRYAN ANDREW ROBERTSON XXN MR BAKRI

PN988

You would agree that the farms, based on your experience whilst you were with Hortex, you would agree that the farms operated by Hortex members differ according to the produce that's produced on the farm?‑‑‑Every crop is different. It has different management requirements, different packing and grading requirements and those requirements are based on a fit for purpose specification which is pushed down through from the first point of sale. So that can either be the supermarkets or a merchant. So they really specify what appearance presentation the actual product needs to be in and that's in my submission I'm saying is the fit for purpose.

PN989

The manner in which the work is performed in the packing sheds differs depending on the type of produce that we're referring to?‑‑‑Absolutely. I mean, if you're looking at the difference between, say, potatoes and, say, capsicums, capsicums are picked usually from a greenhouse. They're then put into a bin. They're chilled in the cool room for 24 hours. Then they are graded, then they're packed and put back into a cool room until they're actually despatched for sale. Potatoes will be harvested from the field, put into bulk lots, then taken back to a central cleaning and grading facility and those cleaning and grading processes vary to make it fit for purpose and also from a health point of view, you have to wash, remove any damaged product and you're sorting for size, weight, and then you're bagging or putting into containers of a specific size as stipulated by the end user, i.e. the supermarkets. So there is a lot more complexity in some crops compared to others.

PN990

Am I right and correct in assuming that some crops require more washing than others, for example?‑‑‑Certainly. Anything that comes in contact with soil, there are requirements from the various state and Federal health departments that soil is removed and any residues of animal or chemicals that might cause health issues or degradation of the product that makes it unsafe.

PN991

Going back to the example of potatoes, you would agree that that type of produce would involve quite a different packing and processing process than, say, capsicums?‑‑‑Yes.

PN992

Capsicums, taking that example, would involve far less washing and essentially merely packing?‑‑‑In a lot of cases, say, with capsicums, there is no washing. If you end up with, say, an insect residue, you will actually clean the outside of the fruit. So if you call the individual vegetable a piece of fruit, you then wipe that clean and then it is graded and packed. In the case of a potato, it comes in usually in bulk in trucks. It goes through a washing plant to remove soil as the first stage. It then goes through a chilling process to actually brush and polish the actual tuber or the individual potato itself and then from there it goes through a grading process on its usual and optical sorter to remove anything that has a damage or a blemish or a rotten piece like an ulcer that's on the outside of the actual tuber and then you go through the actual sizing and weight and that's all done with - in the big packing sheds that's done by optical machines.

*** BRYAN ANDREW ROBERTSON XXN MR BAKRI

PN993

Would you agree with me that given the specific situation for potatoes, given that they're dug out of the ground, that looking at a packing shed wouldn't necessarily be representative of what packing sheds would be like for other vegetables?‑‑‑Usually anything to do with potatoes or carrots and both those come out of the ground and even to a point with onions, you end up with a much larger facility because you end up with a greater volume coming from the ground compared to, say, something like a capsicum.

PN994

Mr Robertson, aside from the size of the facility, there is much more handling and processing of the product prior to it being ready to be packed. You would agree with that?‑‑‑It's being made fit for purpose and safe. So, by removing the soil, you're removing any pathogens, so fungus, bacteria and any sort of harmful material, so organic material, and it also makes the product last longer and that's a specification that's passed down from the first buyer, so the supermarkets, they've got their own requirements. So there is a lot more handling and there's a lot more rigour and as soon as you introduce water into the system, water is a fantastic medium for things to move around in that can be harmful to people and to the product itself in terms of its longevity of presentation at the actual end point, so on the supermarket shelf.

PN995

Thank you, Mr Robertson. You would agree with me that some vegetables perish quicker than others?‑‑‑Absolutely.

PN996

If you take one extreme, onions have a longer life than, say, cucumbers. You'd agree with that?‑‑‑Yes, onions are dried to a specific moisture level and anyone who has purchased onions and kept them in a cupboard at home in their pantry, you'll find that they'll last for quite a number of weeks. If you put a cucumber, tomato, or anything that has a higher water content, you generally find that the actual fruit itself dehydrates and then once you get damage to the flesh, you then get an entry point for fungus and it's not unusual to find that, say, with tomatoes, you'll end up with furry mould growing on a damage point.

PN997

You would agree with me that the produce that has a longer lifespan is often stored, for example, in a cool room at a packing facility for some time?‑‑‑Generally you find now is that, okay, if we take potatoes, there's such volumes coming through, it is expensive to store things for long periods. So, the farm gate concept is that you'll grow it, produce it fit for purpose, package it, and then you will store it in enough quantity so that you can have logistics move it, so trucking, you've got enough to fill a truck to make it economical and you'll move it on. It's really, when you're looking at long-term storage, that it's since left the farm gate and it's gone to - someone's purchased it and it's gone to another user and that's really where you see the separation from farm gate. But generally in the vegetable sector, you cannot afford to keep it, any sort of vegetable, for a long period.

*** BRYAN ANDREW ROBERTSON XXN MR BAKRI

PN998

Putting to the side this idea of keeping something for a long period, in your experience whilst you were with Hortex, would some of the Hortex members store their produce for a number of weeks?‑‑‑Generally, no. We had perishable products. They had a very finite lifespan.

PN999

But in some instances, in your experience, produce was kept for, say, up to a week?‑‑‑Absolutely, yes.

PN1000

That was fairly common?‑‑‑Yes, yes.

PN1001

And stored at the packing facility?‑‑‑Absolutely. You have cool room space with which you keep the product already packed, packed and graded in its boxes on pallets ready for despatch and you're waiting for the end purchaser, merchant, supermarket, to call you to say, "I'm sending a truck around," and then you would load that up and then it would disappear out.

PN1002

You would agree with me that in your experience the task of a grader differs depending on the type of produce that's being graded?‑‑‑Absolutely. The attention to detail in certain crops needs to be higher because you're looking for specific things. So as an example, if we're looking at, say, capsicums, the grader is looking to make sure that there is no sticky residue or any blemishes on the outside of the actual singular fruit. If you found something, you then discard that piece of fruit. In the case of potatoes, you've gone through the optical graders and sorters and the optical cleaners have pulled out what is damaged, but you still need a grader, as in the person, to be skilled enough to look at that potato as its passing along in front of you for that final process. You can't replace a human's mental capacity with a machine. Our technology is not that good at this point in time.

PN1003

You would agree with me that essentially the task of a grader can be described as assessing the quality of the products?‑‑‑They're the quality assurance. That's the one thing. Once you train a grader, that's the final quality assurance to make sure it is fit for purpose so that it can meet that first customer's requirements.

PN1004

You would also agree that there are some key differences between the work undertaken on a farm in relation to land preparation and cultivation compared to the work that's performed by employees that are performing duties in packing sheds?‑‑‑There is. They're vastly different roles.

*** BRYAN ANDREW ROBERTSON XXN MR BAKRI

PN1005

You would agree that generally the work that's performed in packing sheds is more skilled work than work on the farm?‑‑‑Yes and no. It depends on the technology. As technology is improving in the field, so you've got technology advances in machinery, so your tractors, your planters, your harvesters, plus you've also got your irrigation and fertigation, fertiliser application, that is improving, so you've got a lot of electronics coming in. So the field component can be just as rigorous in its own way compared to somebody who was in a packing shed who has to operate an optical sorter or vegetable processing machine.

PN1006

Thank you for clarifying that. But you would agree that there are, looking at comparing the farm-based work to the packing shed based work, those roles involving vastly different skills?‑‑‑Absolutely, absolutely.

PN1007

Thank you, Mr Robertson. No further questions.

PN1008

VICE PRESIDENT CATANZARITI: Mr Crawford?

PN1009

MR CRAWFORD: No questions, your Honour.

PN1010

VICE PRESIDENT CATANZARITI: Thank you, Mr Smith.

RE-EXAMINATION BY MR SMITH [11.39 AM]

PN1011

MR SMITH: Mr Robertson, you said that sometimes products are bagged up on the producer's site in the packing shed and they're left there until there is sufficient quantity to fill a truck. How long would those products typically be there for. Is it a short period? A long period?‑‑‑It's a very short period. I mean, as soon as you harvest a vegetable, the clock is ticking. It's effectively degrading and through refrigeration, you're actually slowing that degradation and the specification that is required by the customers to make it fit for purpose is quite high and there's a point at which the product actually becomes worthless, it doesn't meet market specs and therefore you can't sell it. Or if you do sell it, you're selling it below economic returned. So you can't afford to hang onto vegetable products that have high concentrations of water in them for long periods of time. You are trapped by time and the quality relates to time.

*** BRYAN ANDREW ROBERTSON RXN MR SMITH

PN1012

Just one other question. You mentioned the concept of the farm gate. How do you view that concept or how is it viewed in the industry in your experience?‑‑‑The farm gates in industry is a concept. If you're looking years ago, yes, there was a potential physical boundary that you could say was a gate, but because of the economies of scale and the competition for land, you may have an original home block where a family started producing vegetables. They've since expanded. They've grown to full capacity on that site. They've purchased other blocks of land that are further afield that meet their requirements for their particular vegetable enterprise and those fields or paddocks and their product come back to the central location. That is all within what we classify as the "farm gate", even though geographically they are separated. But everything comes within the business. Anything outside the farm gate is when you first sell. So you've grown the product. You've graded, cleaned, made it fit for purpose and it's ready to leave for the first customer. So in the case of, say, capsicums, we've put the seedlings in the ground. We've grown the plants up. We've harvested over a number of weeks the capsicums themselves. We then grade those, pack those. They're chilled to a set temperature. They meet market specs and then they are despatched. As soon as they're despatched for sale, whether it's to a merchant, to a supermarket or to a value-add manufacturer who turn them into something other than the original, that's when they have left the farm gate and that's the industry recognised position of what the farm gate means.

PN1013

Thank you. NO further questions.

PN1014

VICE PRESIDENT CATANZARITI: Thank you. You're excused.

<THE WITNESS WITHDREW [11.42 AM]

PN1015

VICE PRESIDENT CATANZARITI: We note that the next witness is scheduled for 2 o'clock. Does that remain the case, Mr Smith?

PN1016

MR SMITH: The next witness is ready.

PN1017

VICE PRESIDENT CATANZARITI: He's ready.

PN1018

MR SMITH: Yes.

PN1019

VICE PRESIDENT CATANZARITI: We'll take a five-minute adjournment.

PN1020

MR SMITH: Yes, thank you.

SHORT ADJOURNMENT [11.43 AM]

RESUMED [11.55 AM]

PN1021

VICE PRESIDENT CATANZARITI: Thank you, Mr Smith.

PN1022

MR SMITH: If I could call Mr Mark Cody.

*** BRYAN ANDREW ROBERTSON RXN MR SMITH

PN1023

THE ASSOCIATE: Please state your full name and address.

PN1024

MR CODY: Godfrey Mark William Cody, (address supplied).

<GODFREY MARK WILLIAM CODY, SWORN [11.55 AM]

EXAMINATION-IN-CHIEF BY MR SMITH [11.55 AM]

PN1025

MR SMITH: Morning, Mr Cody, could you please state your full name?‑‑‑Yes, Godfrey Mark William Cody.

PN1026

What is your current position?‑‑‑I am still the Chief Executive Officer of Primary Industries Skills Council, the Seafood Processors and Exporters Council and I run a number of companies in Asia.

PN1027

Have you prepared a statement in this matter?‑‑‑I have.

PN1028

Do you have a copy of your statement with you?‑‑‑I have it with me, yes.

PN1029

Do you wish to make any amendments?‑‑‑No, no, I think it stands.

PN1030

Is it a true and correct record to the best of your knowledge?‑‑‑It certainly is. It certainly is, yes.

PN1031

Thank you. No further questions.

PN1032

VICE PRESIDENT CATANZARITI: Exhibit AIG5.

EXHIBIT #AIG5 STATEMENT OF GODFREY CODY

PN1033

VICE PRESIDENT CATANZARITI: Thank you.

CROSS-EXAMINATION BY MR BAKRI [11.56 AM]

PN1034

*** GODFREY MARK WILLIAM CODY XN MR SMITH

*** GODFREY MARK WILLIAM CODY XXN MR BAKRI

MR BAKRI: Mr Cody, you've given evidence of the function of centralised shed operations is a follows:

PN1035

Their function is to clean the harvested product, sort and grade the highly variable produce that has been harvested and prepare sorted product for despatch to customers.

PN1036

You agree with me that the extent of cleaning required varies greatly depending on the type of product in question?‑‑‑It can, but in relation to the function of cleaning product it is generally applicable to all categories.

PN1037

But you agree with me that at one extreme you would have potatoes that require a high level of cleaning given that they come out of the dirt?‑‑‑Yes, yes.

PN1038

On the other end of the extreme, you'd have apples which require minimal cleaning?‑‑‑Correct.

PN1039

Do apples, in your experience, require any cleaning?‑‑‑They do, yes. All fruit and vegetables have the potential to have some pathogens which can be harmful to human health, so the processes really have to be thorough enough to not only meet the biosecurity requirements, but also the requirements under various legislation to ensure that the product is safe for human consumption.

PN1040

Thank you. Do you accept that with some produce, depending on what it is, that the main task involved in a centralised shed operation would be packing the produce?‑‑‑Yes, it's one part of the operation within a packing shed, yes.

PN1041

In some packing operations, there would be a lot more handling of the produce than in other operations?‑‑‑It can be depending on the type of product, yes.

PN1042

You agree that some produce does not perish as promptly as other produce?‑‑‑Correct.

PN1043

Accordingly, some produce can be stored for much longer periods than other produce?‑‑‑It certainly can, that's true.

PN1044

If we take the example of apples, they can be stored for up to 12 months?‑‑‑Correct.

*** GODFREY MARK WILLIAM CODY XXN MR BAKRI

PN1045

In your experience, sometimes apples are stored at centralised shed operations for extended periods of time?‑‑‑Generally, not the case. In most of the facilities that I have seen, and I have seen many, many hundreds, the whole process requires a rapid despatch to customers and, in fact, much of the product that is harvested is harvested in line with customer requirements. So, what tends to happen is that for certain categories of horticultural product, it may only be held here for one or two days and the nature of the ordering processes varies considerably where supermarkets may give some prior notice of what they're looking for in a month, but may actually change the order on the day to say they want more or less and so the company has to adjust what it's doing and if it's harvesting more in anticipation of that and the market takes less, there will be some temporary storage of the product until the next order comes through the following week. So, it does vary considerably. Having said that, some crops that can be stored for a period of time within the facility are in most cases not held for long periods of time simply because of the perishable nature. Other products, like apples, can be stored, as you correctly pointed out, for longer periods of time.

PN1046

You have seen that occur at the centralised shed facility?‑‑‑I have seen it, yes, but only in small operations, not for the larger ones in apples. Certainly, for a lot of other products like cherries, for instance, it's critically important to get that product out quickly, so if it is stored, it's only often stored for one or two days.

PN1047

One or two days?‑‑‑Mm.

PN1048

With potatoes, in your experience, having seen a lot of facilities, what is the norm?‑‑‑I don't think there is a norm a such. I think it just, as I said before, it varies depending on when the orders come through. But in most cases, it's fairly rapid despatch. Once the product is bagged, it's usually ready for transport either that day or within a day or two. And, similarly, where there's a lot of orders coming through in a particular period of time and there is a high level of harvesting for the product, that product then may - some of it may be stored for a few days and possibly a week. But in most cases, it's a day or two. Typically, it's processed for orders that day or the next day.

PN1049

In relation to products that don't perish as quickly, they can be stored for a week or two; would you agree with that?‑‑‑Yes, it can happen, yes.

PN1050

You have seen that occur?‑‑‑It can happen.

PN1051

You mentioned how orders are placed by supermarkets?‑‑‑Yes.

*** GODFREY MARK WILLIAM CODY XXN MR BAKRI

PN1052

I understood you to say that an order will be confirmed the day before as to the volume of produce that is required. In relation to customers or clients that are not supermarkets, it's typical that they give much more notice of the produce they require, from your experience?‑‑‑Only in some cases, others are more regular. For instance, retailers that sell, I don't know, a hundred kilos of potatoes a day, for instance, will put a regular order or buy through a fruit and vegetable market. So some of the producers will then have a stall area where that product is then sold, the first point of sale then is to customers who come to purchase from those market areas.

PN1053

Taking that example, the producer has some certainty as to how much produce they need to harvest and process?‑‑‑Only in some instances. The variability is quite marked, in fact, and it's different between the different supermarkets. I've spoken to many of the fruit and vegetable managers of the major supermarket groups in South Australia and they give me to believe that, in fact, it's not a straightforward thing that they order a similar quantity every week. It's quite variable and there are changes in customer purchasing patterns which also go through to the producer. So, that can influence the volume and the timing of those orders and it's difficult to say that you're going to get an order for, say, one tonne a week from a supermarket. It is simply not that way. It's quite variable and it changes between the supermarket groups. Some are much more better at forecasting the demand and give clear orders and others can change them within a day or two.

PN1054

Putting the example of supermarkets to one side, there are many, many producers that don't sell to supermarkets?‑‑‑Mm.

PN1055

The vast majority don't sell to supermarkets; would you agree with that?‑‑‑It's difficult to quantify exactly what percentage do and don't simply because the larger groups account for the largest proportion of production from horticulture and that's part of a process that's been going on for scaling up the industry over the last two to three decades. So, the number of producers has actually fallen, but those that are left within the industry are much larger and most of the larger groups have key customers in the supermarket area. So, I'm not quite sure what the actual percentages would be, but certainly that seems to be the pattern that's occurred.

PN1056

Thank you for clarifying that, but you would agree with me that a significant proportion of the industry of producers don't sell to supermarkets?‑‑‑I don't know that it's a significant proportion. It's a proportion. I don't know whether it's significant or not.

*** GODFREY MARK WILLIAM CODY XXN MR BAKRI

PN1057

If we just look at those producers that don't sell to supermarkets, they have much more certainty generally as to the amount of produce they need to harvest?‑‑‑Only in some instances. There are some smaller family farm producers who will actually sell through farmers' markets, for instance, and the variability in those markets is also difficult to forecast for anybody that's producing food and it's just you never know whether they're going to buy your potatoes or your leeks or your carrots that day or not, yes.

PN1058

But I guess in that instance, it would involve the farmer deciding to harvest and process, say, two boxes of potatoes and take them to the store?‑‑‑Correct.

PN1059

And just see how much is sold?‑‑‑Correct, and in some cases they sell out quickly and at other times they have product to take home.

PN1060

You would agree that there are some key differences between the work undertaken on the farm in land preparation and cultivation compared to the work that is performed in packing sheds?‑‑‑there are different parts of a value chain within horticulture. If you look at what occurs in terms of some of the activities within, say, sheds, particularly in relation to the production of seed potatoes, for instance, that's done before there is a planting in the farm. So there is almost a circle of activity between the various operations that produce product for market and although the land base, the growing areas, are to do with preparation of the ground, the actual planting, the raising of the product, the irrigation and all those components, and the physical harvesting of the product from that land which may be hydroponic land, it may be open filled growing systems. It might be a variety of systems, but in all cases that product then is put into a shed where the processes within the shed are different in that chain. That is they are washed and sorted and graded, et cetera.

PN1061

Thank you, Mr Cody. In your experience, generally, you have seen employees who are employed to work on the farm in land preparation and cultivation and then other distinct employees who are employed in the centralised shed operations. Would you agree with that?‑‑‑That's true, but there are also a variety of different situations where employees work in both facilities. The small to medium growers tend to have people who pick the product and then work in the packing shed and that's very, very common.

PN1062

But what I have described is where it's neatly divided between the farm and the sheds, is that the most common arrangement that you have seen in your experience?‑‑‑It's difficult to be precise about that too simply because the variances are so great. Individual companies will employ their labour to suit the requirements of the farming operations and so there may well be a mixture of activities between the farm and the packing shed which is quite common. And there may be instances where perhaps when the larger companies have a segment of their workforce which is almost entirely working within the packing shed area.

*** GODFREY MARK WILLIAM CODY XXN MR BAKRI

PN1063

My final question is, would you agree that the arrangement that I have described is the typical arrangement or the most common arrangement for bigger operations?‑‑‑Once again, some of the larger companies employ staff in both the growing and harvesting areas including those final parts of the harvesting chain. I'm not too sure whether it's the most common situation. It's certainly evident and it's certainly evident at a number of the larger companies simply because the scale of the operation is much bigger than we have been used to perhaps in previous decades and I can point to the differences being between a grower that might produce one or 2000 tonnes of product and another grower that produces 100,000 tonnes of product. So the nature of the work, each individual enterprise will undertake, whilst it has the same functions, it may well in fact have different arrangements for individual employees to work harder in one or other or both of those areas.

PN1064

Where you have seen employees work across both of these areas, it's typically been the case that the work has been primarily involved in one area and has done secondary work in the other area; is that right?‑‑‑Once again, I hate to say this, but sometimes that is the case, but then you have to realise that some of the people who are involved in the packing, sorting, grading areas within the packing sheds are often casual staff, whereas most of the growing staff are permanent staff. Some of the people who work in the packing shed are permanent staff in terms of supervision, management and machinery operation, et cetera, and some of the staff are involved in the processing as well. So, it's a mixture depending on individual enterprises. It's very difficult to be precise and say this is a common model across the industry because of the variances that occur within each particular product area and also sometimes the region simply because of the nature of the availability of labour for those particular facilities. It changes so dramatically. It's very difficult to be that precise about it. I'd love to be able to say, yes, it's as neat as that, but it isn't.

PN1065

Thank you for clarifying. Thank you, Mr Cody?‑‑‑Thank you.

PN1066

No further questions.

PN1067

VICE PRESIDENT CATANZARITI: Mr Crawford.

PN1068

MR CRAWFORD: Thank you.

CROSS-EXAMINATION BY MR CRAWFORD [12.11 PM]

PN1069

MR CRAWFORD: Mr Cody, I'm representing the AWU. At paragraph 22 and 24 of your witness statement, firstly, at paragraph 22, you talk about the development of the Horticulture Modern Award and at paragraph 24, you raise some concern about the integrity of modern awards, presumably, in particular, the Horticulture Award; is that correct?‑‑‑Correct.

*** GODFREY MARK WILLIAM CODY XXN MR CRAWFORD

PN1070

Are you reasonably familiar with the Horticulture Award?‑‑‑Yes, I am.

PN1071

Are you aware that in the Horticulture Award there are currently differing overtime conditions during harvest periods?‑‑‑I'm broadly aware of that. I haven't gone into the detail of each of the financial arrangements for remuneration, no, that's true.

PN1072

Are you aware of the clause in the award or the clauses that specify different overtime conditions during harvest periods?‑‑‑Yes, I have seen them, yes.

PN1073

For a business that doesn't grow anything, how do those provisions work? Is there a harvest period for that business or there isn't?‑‑‑For a business that doesn't grow any product?

PN1074

Yes?‑‑‑Well, what business would be talking about? Someone who is - - -

PN1075

Well, Mitolo, where the potatoes, for example, are trucked in, they're not grown on site?‑‑‑The location isn't an issue within the award. It's to do with the function. The function of the horticulture chain, irrespective of whether it's actually within a growing site or excised from a growing site, in my view, doesn't bear any relation to the actual functions under the award in this case. In particular, the functions that are spelt out in the classifications which point to all of these activities as being central to workers within the horticulture industry.

PN1076

Yes, well, that's sort of part of the argument in the case. But from your experience, if there is a legal entity that doesn't actually grow any food or vegetables, does that legal entity have a harvest period?‑‑‑I'm trying to grasp what a legal entity that doesn't have any connection with the horticulture industry would be. It wouldn't be - - -

PN1077

No, I didn't say a legal entity that doesn't have any connection. I said a legal entity that does not grow any fruit or vegetables?‑‑‑If it's one of a suite of businesses, say, in a family business, it could be the case, yes.

PN1078

Leaving aside family businesses, just a legal entity, a company that does not grow any fruit or vegetables, does that legal entity have harvest period or not?‑‑‑Well, I'm unsure because I really have no idea whether that legal entity is engaged in the production of horticultural product.

*** GODFREY MARK WILLIAM CODY XXN MR CRAWFORD

PN1079

Thank you. Nothing further.

RE-EXAMINATION BY MR SMITH [12.14 PM]

PN1080

MR SMITH: Just one question, Mr Cody. Some products you said can be stored for longer periods than others and apples was one of the examples where I think you said that it can happen that apples would be stored for a week or two. Is that the norm or not?‑‑‑I'd say generally the norm for what I've seen in the sense that some fruit harvests tend to be very, very high volume which the market can't absorb at a particular time, so that's why apples are a particular case where they're often stored for longer periods of time simply because of the volume of product. Other products that also have high volume don't have that capability. You can't store, for instance, some citrus for those times - that length of time and it deteriorates even under cool storage.

PN1081

Thank you. No further questions.

PN1082

VICE PRESIDENT CATANZARITI: Mr Cody, you're excused.

<THE WITNESS WITHDREW [12.15 PM]

PN1083

VICE PRESIDENT CATANZARITI: Is there anything further from any party before we adjourn? We'll adjourn then. The Commission is adjourned.

ADJOURNED INDEFINITELY [12.15 PM]

*** GODFREY MARK WILLIAM CODY RXN MR SMITH

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AIG3 DRAFT DETERMINATION............................................... PN794

PAUL WILLIAM WHITE, SWORN.................................................................. PN799

EXAMINATION-IN-CHIEF BY MR BOURKE.............................................. PN799

EXHIBIT #Z1 STATEMENT OF PAUL WILLIAM WHITE DATED 20/12/2016 PN823

CROSS-EXAMINATION BY MR BAKRI....................................................... PN831

CROSS-EXAMINATION BY MR CRAWFORD............................................ PN867

THE WITNESS WITHDREW............................................................................ PN878

JOHN ANTHONY DOLLISSON, AFFIRMED................................................ PN883

EXAMINATION-IN-CHIEF BY MR ANGELOPOULOS.............................. PN883

EXHIBIT #VH1 STATEMENT OF JOHN ANTHONY DOLLISSON TOGETHER WITH GROWCOM ISSUES PAPER OF APRIL 2014............................................... PN896

CROSS-EXAMINATION BY MR CRAWFORD............................................ PN903

EXHIBIT #AWU4 AUSTRALIAN VEGETABLE-GROWING FARMS: AN ECONOMIC SURVEY, 2014-15 AND 2015-16......................................................................... PN908

RE-EXAMINATION BY MR ANGELOPOULOS.......................................... PN956

THE WITNESS WITHDREW............................................................................ PN963

BRYAN ANDREW ROBERTSON, SWORN................................................... PN970

EXAMINATION-IN-CHIEF BY MR SMITH................................................... PN970

EXHIBIT #AIG4 STATEMENT OF BRYAN ANDREW ROBERTSON.... PN981

CROSS-EXAMINATION BY MR BAKRI....................................................... PN981

RE-EXAMINATION BY MR SMITH............................................................. PN1010

THE WITNESS WITHDREW.......................................................................... PN1014

GODFREY MARK WILLIAM CODY, SWORN.......................................... PN1024

EXAMINATION-IN-CHIEF BY MR SMITH................................................. PN1024

EXHIBIT #AIG5 STATEMENT OF GODFREY CODY.............................. PN1032

CROSS-EXAMINATION BY MR BAKRI..................................................... PN1033

CROSS-EXAMINATION BY MR CRAWFORD.......................................... PN1068

RE-EXAMINATION BY MR SMITH............................................................. PN1079

THE WITNESS WITHDREW.......................................................................... PN1082