Herb, Native Foods and Essential Oils Convention,Workshops and Farm Visits

Proceedings of the 3rd National Herb, Native Foods and Essential Oils convention,workshops and farm visits

14th -16th August, 2003

Lismore, NSW

RIRDC Publication No 04/059 Project No TA 023-36

Compiled and edited by Phillip Wilk and Wendy Dingle

ISBN 0642 58769 8 ISSN 1440-6845

RIRDC Publication No 04/059 RIRDC Project No TA 023-36

Proceedings of the National Herbs, Bushfoods and Essential Oils Convention 2003

The views expressed and the conclusions reached in this publication are of the authors and not necessarily those of persons consulted. RIRDC shall not be responsible in any way whatsoever to any person who relies in whole or in part on the contents of this report.

This publication is copyright. However, RIRDC encourages wide dissemination of its research, providing the Corporation is clearly acknowledged. For any enquiries concerning reproduction, contact the publications manager on phone 02 6272 3186

Contact Details Phillip Wilk NSW Agriculture NSW Centre for Tropical Horticulture Alstonville NSW 2477 Phone: 02 66 262450 Email: [email protected] Website: www.agric.nsw.gov.au

In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form.

RIRDC Contact Details Rural Industries Research and Development Corporation Level 1 AMA House 42 Macquarie St. Barton ACT 2600 PO Box 4776 Kingston ACT 2604 Phone: 02 6272 4539 Email: [email protected] Website: www.rirdc.gov.au

Published in April 2004 Printed on environmentally friendly paper by Union Offset Printers

i Foreword

The 3rd National Herb, Native Foods and Essential Oils Convention was held in Lismore NSW as part of the annual Herb Festival. It is usually run as a biennial event. It was funded by Rural Industries Research and Development Corporation, NSW Agriculture and NSW State and Regional Development.

Its aim was a forum for communication and networking opportunities amongst growers, researchers, processors and marketers involved in these industries and enterprises.

More particularly the Convention had three aims: 1. To help industry development by providing up to date information on what’s happening in R&D; 2. To raise awareness of the opportunities for those wishing to enter or invest in the herb, essential oils and native foods industries and what is needed to do this; and 3. To discuss how direction and communication in the industry can be improved.

The two and one half day convention welcomed 100 delegates from the whole marketing chain. Most attendees see it as a great opportunity to regularly meet their customers or suppliers and discuss issues relevant to their particular businesses.

The papers presented in these proceedings provide information on industry overviews and current industry research. Most participants agreed that the level of information provided was relevant and useful to their businesses.

The Industry Development session gave attendees a chance to listen to how the Macadamia industry developed a communication model and an industry body and to make some suggestions of what may be necessary for the herb industry to move forward in a similar pursuit.

The Open Forum gave growers, processors and marketers in the supply chain a chance to outline specific product requirements for their particular industry. These sessions were recorded and transcribed to give a true representation of the responses of the industry participants

The workshops identified areas for future research and support and the importance of education and communication. They also highlighted the need for practical examples to production issues, marketing, and government compliance.

ii Acknowledgments

We would like to thank the following organisations and individuals for their support:

The Organising Committee

• Phillip Wilk, NSW Agriculture, Alstonville • Louise Barry, Lismore Unlimited • Sibylla Hess-Buschman, Australian Rainforest Products • Greg O’Connor, All Farm Business Services • Jan Ford • Tim Coleman, NSW State and Regional Development

Sponsored by

• NSW Agriculture • Rural Industries Research and Development Corporation • Lismore Unlimited • NSW State and Regional Development • Australian Rainforest Products • FarmBiz • All Farm Business Services

Workshop support provided by

Greg Keegan Allan Coates Ross Boyle Paul Moosburger Jenny McInnes Genevieve Carruthers Elaine Ingham Arthur Akehurst Abigail Jenkins Jan Ford Ian Hemphill Wendy Dingle David Forrest Ward Gunn

iii Contents Page Program …………………………………………………….………... 1

Plenary session 1, Day 1

• Opening Address and Chairperson -Tony Byrne (RIRDC)……………...3

• Industry overviews-

o Robert Riedl - Overview of the Global Herb Marketplace …….…..6 o Andrew Fielke - Guest Chef using Native Food Ingredients………13 o Ashley Dowell -The role of Standards in herbal medicines and essential oils………..……………………………………...………...14 o Ian Southwell - Essential Oils Producers Association of Australia………………………….………………………….………17

Plenary session 2, Day 2 • Chairperson Dr Phil Wright NSW Agriculture o David McKinna - ‘Curing New Industry Syndrome’ ………………22 o Dr Heather Cavanagh - ‘Lavender, the Essential Oil’ …………….36 o Peter Scholefield – ‘Agricultural chemical issues facing small industries’…………………….………………………………………42 o Dr John Faragher - ‘Food safety issues for the Australian native plant, food and herb industries’…………………..………………….48 o Tim Groom - ‘Preliminary Evaluation of Some Medicinal Herbs’…57

Workshop sessions, Day 1 and Day 2 • Soil Health…………………………………………………………………..60 • Marketing…………………………………………………….……………..62 • Production……………………………………………………………….….63 • Regulatory compliance…………………………………………………….63

iv Farm visits • Tryton Waste…………………………………………………………..…...65 • Keith Alcock - Lemon Myrtle Production……………………………..…67 • Nick Powers -Thyme Production……………………………………….…66 • Main Camp Tea Tree - Dennis Williams Manager……………………….67

United industry development session - What should the industry look like? • Ken McLeod - Chairperson • Andrew Heap - ‘Functioning of the Macadamia Industry Organisation’…69

Questions from the floor……………………………………………. 77 Open Forum

• Meeting the Market Players – Developing an industry organisation model for herb growers……………………………………………………………79 Jane Parker - Gourmet Garden Ian Hemphill -Herbies Spices Chris Oliver - Blackmores Nick Rojo - T.P. Health Peter Purbrick - Mediherb John Bax - Main Camp Tea Tree Robert Hayes - Freshzest David McKinna - McKinna and Associates

Appendices 1. Report on Options for industry development…………………………..85 – Response form…………………………………………………...94 2. Conference evaluation, 2003 Survey Results………..…………………96 3. Contacts – Sources of information…………………………………….100 4. Registrants for 2003 Herb Convention……………………………….. 104

v Program Thursday 14 August 2003 Lismore Workers Club DAY ONE PLENARY SESSIONS Presenter/s

7.30AM Delegate Arrival. Coffee & Tea available REGISTRATION

8.30AM – 11AM Welcome & Introduction to Delegates. With morning tea Tony Byrne, RIRDC Industry Overviews “What’s happening in the Global Herb Marketplace” Robert Riedl, TP Health - Herbs Andrew Fielke, Red Ochre - Native Foods Ashley Dowell, Southern Cross University - Essential Oils Ian Southwell, Essential Oil Producers of Australia 11AM – 2PM WORKSHOPS 11AM – 12.15PM WI: Natural Resources “Soil Health: Do you know what is sustainable” Dr Elaine Ingham Landscapes & soil types, Assessing and maintaining soil health, Soil Foodweb Institute Sustainability Abigail Jenkins NSW Agriculture 12.15PM – 12.45PM LUNCH 12.45PM-2PM “How well do you know your markets?” Ian Hemphill Where can we sell it? How much can we sell? What will be our profit? Herbies Spices

2PM – 5PM FARM VISITS. With afternoon tea SI: Worm Farm You will visit the site that converts vegetable waste to worm castings in order to create good, sustainable soil health to increase crop production and productivity. S2: Herb Farm You will visit a local herb farm and look at irrigation methods, harvesting and planting equipment along with drying and germination facilities. This farm supplies to the medicinal, fresh and dried culinary markets. S3: Native Food Farm Visit a lemon myrtle farm involved in the production of essential oils. Observe harvesting and distillation techniques and discuss production issues. 5.30PM Arrive back at Lismore Worker’s Club 6PM – 7PM Cocktail function with nibblies Attend this function for a chance to unwind after a very informative day, mix with industry people and network.

DAY TWO Friday 15 August 2003 8AM Delegate Arrival. Coffee & Tea available Dr Phillip Wright, 8.30AM – 11AM Welcome delegates. With morning tea NSW Agriculture “What does the industry need?” David McKinna, McKinna & Associates Dr Heather Cavanaugh Industry Research Studies “How science is helping our industry” Charles Sturt Uni - Natural Remedies – Myth or fact? Peter Scholefield - Chemical Residue Scholefield & Robinson - Food Safety Issues Dr John Faragher DNRE, Victoria

1 - Preliminary Evaluation of Medicinal & Culinary Herbs Tim Groom, Botannical Resources Australia 11AM – 2PM WORKSHOPS 11AM – 12.15PM W3: Production Management “What crops top grow: Where, why and how” Dave Forrest & Allan What can we grow? Organic v Non-organic methods Coates, What records need to be kept North Coast Institute of TAFE

12.15PM – 12.45PM LUNCH 12-45PM – 2PM W4: Regulatory Compliance “Are you playing by the rules?” Paul Mooseburger OH&S standards, Food and health standards, employment and contractual North Coast Institute of TAFE requirements. Arthur Akehurst NSW Agriculture Genevieve Carruthers NSW Agriculture

2PM – 5PM FARM VISITS. With afternoon tea S4: MAIN CAMP, Tea Tree Plantation Visit Australia’s largest Essential Oil producer, produicing over 60% of the total world market for Tea Tree oil under: - ISO 9001/2000 Quality Assurance; GMP TGA Good Manaufacturing Practice: ISO 14001 Environmental Management System: and HACAP. They have worldwide sales and marketing networks and are committed to quality market development with a customer focus.

5.30PM Arrive Back at Lismore Workers Club

DAY THREE Saturday 16 August 2003 Facilitated by, Department of State and Regional Development 8.30AM – 10.30AM UNITED INDUSTRY DEVELOPMENT SESSION

11AM – 12.30PM Open Forum “Meet the Players” Herbie’s Spices - How does the market determine what they buy? Blackmores - What are some of the largest quantities being purchased and who is TP Health supplying them? MediHerb Australia - Where do they see the industry in 5 years? Main Camp Freshzest Pty Ltd The open forum panel is subject to change McKinna & Associates Gourmet Gardens

2 Plenary Session 1

Opening Address Tony Byrne, Program Manager, Rural Industries Research and Development Corporation (RIRDC)

Ladies and gentlemen, I’m pleased to welcome you to this Third National Convention on Herbs, Native Foods and Essential Oils.

Its purpose is to provide a forum for communication and networking opportunities amongst growers, researchers, processors and marketers involved in these industries and enterprises.

More particularly the Convention has three aims: To help industry development by providing up to date information on what’s happening in R&D; To raise awareness of the opportunities for those wishing to enter or invest in the herb, essential oils and native foods industries and what is needed to do this; and To discuss how direction and communication in the industry can be improved.

There are some exciting opportunities for these industries but it is not all plain sailing. Meeting market requirements in terms of product quality and safety will be crucial if these industries are to be successful in the future. Hence the theme of this Convention - "Meeting your Markets."

The Pan Pharmaceuticals recall of products in 2003, although related to the manufacturing process, demonstrated the importance of maintaining quality. Inconsistent product quality both from growers and processors is closely watched. Only those that "Meet the Market" will be able to sustain their businesses.

These comments underline the fact that the days of growing a product and hoping to find a market are gone. Only growers who are able to meet the product specifications demanded by the market place both for consistent quality and food safety will be able to be profitable. Growing a few acres of herbs for a hobby or a lifestyle may be an attractive option, but it is questionable whether it provides the basis for a competitive, growing industry.

I hope that the presentations and discussion at this Convention will help provide useful information on the markets for these industries.

This first session is sponsored by the Rural Industries Research and Development Corporation (RIRDC). RIRDC has supported previous conferences and is pleased to be supporting this one. I would like to take this opportunity to say a bit more about R&D and RIRDC’s involvement in it.

RIRDC is one of a number of rural research and development corporations in the Federal Agriculture portfolio. It invests in R&D for new and emerging rural industries, some smaller established industries and in generic research across the whole of the rural sector.

The reference to investment is important. RIRDC is not just a granting body – we want to make sure that the R&D we support has a beneficial impact on rural enterprises.

Through our role in supporting research in new and emerging industries we have an involvement in all the industries covered by this conference. RIRDC’s New Plant Products Program invests in R&D for native foods, innovative tropical and subtropical crops and culinary herbs and we also have separate programs on Essential Oils and Plant Extracts and Tea Tree Oil.

Last year RIRDC invested nearly $1.0 million in ongoing projects in these industries. But, along with the accompanying contributions from the research organisations and industry, the total research support is probably more than double this amount.

Recent and current projects in these programs include work on broad scale trials on various native food crops, coriander, the functional properties of Australian native foods, quandongs, camomile, lavender, ginseng, valerian, skullcap and extensive work on tea tree breeding and the efficacy of tea tree oil – just to give a flavour of what we do. As well, related projects in this region are benefiting the growing coffee industry and tree crop industries such as longan, lychee, rambutan, durians.

Collaboration with industry is an important part of how we operate both in determining research priorities and in selecting projects. We also seek an industry financial contribution to projects wherever possible.

RIRDC puts a lot of emphasis on the uptake of the research it funds. Most of our final project reports are published in hard copy and are also made available for download from our website (www.rirdc.gov.au).

But we also see the links with industry as essential to ensuring that we have effective pathways to adoption. This includes encouraging the commercialisation of a concept, or product when the research leads to this opportunity.

RIRDC selects its projects through a competitive process and we expect to launch our next round (for projects that would start in 2004-2005) around mid-August this year.

You will hear, later in this program, presentations from Dr Peter Scholefield, Dr John Faragher, Dr Heather Cavanagh and Tim Groom on a number of projects that RIRDC has been supporting and that should be of real interest to farmers and downstream producers. Getting industries to be viable and encourage regional employment and development is an underlying concern as well as meeting the current community demand for clean safe food.

RIRDC and the NSW Department of Agriculture have similar aims for this industry. We want to ensure a profitable and sustainable herb, native food and essential oil

4 industry that has a reliable supply chain and is market focussed with good communication to all industry participants. The Convention agenda should contribute to these aims through an interesting mix of presentations on research and marketing and field visits.

In closing I would like to thank the sponsors of the Convention for their support and the Organising Committee for their excellent work. I wish you a successful conference.

5 Overview of the Global Herb Marketplace

Robert Riedl TP Health Limited

Herbs have been used by mankind in all probability since the beginning of time as humans searched for ways of preserving food, alternating the taste of foods and treating ailments through the observation of the effect of particular herbs on the condition of the body. We have historical records that the peoples of ancient Egypt, India, China, Greece and other countries used herbs extensively for virtually every ailment. In 78 A.D., Europe’s first herbal monographs collection was published in Rome providing detailed information about some 600 plants, 90 of which remain in use today. Over the centuries the interest in herbs and spices has varied in Europe from the highs of the 16th, 17th, and 18th centuries where the commodity was traded as virtual currency and new lands and continents discovered based on the acquisition of herbs and spices. Herbal-based medicine began to fade, however, in the mid 1800s with the increasing appeal of patented drugs manufactured by the emerging pharmaceutical industry.

In today’s world with all its scientific and technological advancements, mankind is beginning to rediscover the benefits of herbs and spices that were so well known to previous generations. These benefits are directly connected to increased awareness of the impact of foods on the well-being and health of a person, and in pharmacology many drugs owe their origin to herbs and herbal active principles. As many synthetic pharmaceuticals have already become ineffective or are in the process of becoming ineffective for the treatment of disease and human ailments, there is now a new incentive and commercial interest in reinvestigating some of the old herbal treatments and in developing new plant based medicines.

The worldwide herbal industry is now estimated at more than US$20 billion. The largest markets for herbal medicines, both in terms of manufacturing and consumption, are still in Europe, followed by Asia.

Utilisation and demand for herbs and spices is primarily in herbal medicine applications. Other areas include food flavourings, cosmetics such as fragrances, skin care, oral care and hair care preparations, and industrial chemicals. The markets for herbs and spices can be divided into three segments:

The Culinary Herb and Spice Market The two basic forms of culinary herbs are: fresh and dried/powdered. Some of the best known culinary herbs and spices are: parsley, pepper, chilli, oregano, basil, chives, thyme, sage, dill, rosemary, marjoram, caraway seed, the various mints, fennel, ginger, paprika, garlic and tarragon.

The Fresh Herb Market The fresh herb market which is the industry base continues to increase in response to consumer demand of utilising more herbs in food preparation. Traditionally many culinary herbs were produced in Europe, but many European countries are now unable to meet the demand for local supply and are increasingly forced to import fresh herbs. This presents market opportunities for a country like Australia

6 with a limited domestic market, but large production potential, a reversed growing season to the northern hemisphere, and a clean, green image. As the result of fast transportation and improvements in handling and storage of produce with a limited shelf life, fresh herbs can now be supplied to almost any location.

The Dried/Powdered Herb Market The preparation of dried/powdered herbs involves drying, milling, cleaning and packaging of whole leaves, stems, flowers, roots, bark, fruits or seeds depending on which plant part yields the culinary herb or spice substance. Dried herbs/spices lose their quality slowly and therefore make storage and transport easier in comparison to fresh herbs.

The main markets for dried herbs and spices are the food processing industry and herb and spice companies such as Master Foods and McCormick in Australia.

The Essential Oil Market Common uses for essential oils are in food flavouring, in fragrances, in cosmetics and personal hygiene products, in the medicinal/pharmaceutical market, and in aromatherapy. This market segment will be covered in more detail by John McGann of Main Camp.

The Medicinal/Pharmaceutical Herb and Spice Market Phytopharmaceuticals and herbal health supplements are the fastest growing sector of the herb and spice industry. This industry is well established in Europe and Asia where it has a long history of rigorous scientific, regulatory, and good manufacturing practices. In most European and Asian countries, herbal medicines are an integral part of the health care system. Herb species and individual preparations containing specific herbs or herb derivatives as active principles have undergone years of scientific validation, safety and efficacy studies, companies follow good manufacturing practices, and marketing claims are carefully regulated. Herbal medicines are prescribed alongside pharmaceuticals, in some cases outselling the preferred pharmaceutical; for example in Germany St. John’s Wort outsells Prozac as a treatment for depression1. Well studied, well designed and well manufactured herbal medicines are generally recognised by consumers as safer and with fewer side effects than synthetic drugs used to treat similar conditions. The grim statistics provided in 1997 by the US National Poison Centre, Department of Emergency Medicine of the George Washington University reveal the following:

Synthetic Drugs Aspirin 7000 annual deaths Antihistamines 412 annual deaths Antimicrobials 953 annual deaths Cough and Cold Drugs 1526 annual deaths Asthma Therapies 257 annual deaths Cardiovascular Drugs 370 annual deaths Antianxiety and Antipsychotic Drugs 888 annual deaths Analgesics 2669 annual deaths Antidepressants 517 annual deaths

7 Herbal Medicines Red Raspberry Leaf, St. John’s Wort, Ginkgo Biloba, Hawthorn Berry, Cayenne Pepper, Garlic, Ma Huang, Stinging Nettle, White Willow Bark, etc. etc. - number of annual deaths = 02.

Complementary medicines, particularly herbal treatments, have become increasingly popular in Australia. They are primarily used for self-medication to enhance health and well being, to prevent illness, and to treat specific conditions such as flu and cold relief, laxatives, diuretics, stress reducers, mental and memory improvement, benign prostatic hyperplasia, menstrual cycle relief, and sleep aid.

The medical profession in Australia and also in North-America, in contrast to their European and Asian colleagues, is still largely reluctant or sceptical to accept complementary and herbal medicines and therapies as viable options for the treatment of patients. But this position seems to be slowly changing and some members of the AMA have moved to embrace complementary and herbal medicine as important components of integrated, quality health care. As Dr Kerryn Phelps, former AMA Federal President, said in her speech to the International Holistic Integrative Conference on 23 May 2003: “I can see a place for complementary medicine to work alongside and within orthodox medicine to provide better health outcomes for Australians3.” While awareness and interest in complementary medicine in general and phytomedicine in particular has grown, there has been an increasing concern that outcomes for patients in varying clinical circumstances should be critically evaluated.

Herbs used in phytomedicine contain pharmacologically active constituents that may have positive or negative health effects. A progressively growing use of herbal remedies and supplements will pose new challenges in patient care. Many patients use herbal supplements as complement to conventional therapies. Distribution channels for herbal complementary medicines have expanded from traditional health food shops to mass market, pharmacy, e-commerce, and multilevel distribution outlets. Manufacturers and distributors of herbal complementary medicines, pharmacists and health care providers must be in a position to provide accurate information to consumers/patients about a given herbal complementary medicine/supplement, what the product is purported to do, its potential adverse effects, botanical-drug interaction, and botanical-botanical interaction.

Furthermore, some herbs should be avoided or used with caution in certain disease states. Reliable, high quality reference information should be accessible and used to provide relevant advice about any given herbal medicine to consumer/patients. The number of publications concerning the safety and efficacy of herbal medicines has grown over the last 10 years or so. Some are very good, some are not very good.

The paper entitled “Assessment of the Quality of Reference Books on Botanical Dietary Supplements” by Walter G. Chambliss, Charles D. Hufford, Melissa L. Flagg, and James K. Glisson and published in the Journal of the American Pharmaceutical Association 42(5):723-734, 2002 provides an excellent evaluation of the available reference literature for use by anyone dealing in medicinal herbs such as manufacturers, promoters, pharmacists, and health care providers.

About 20 or so herbs feature consistently as top sellers in the herbal medicines market: Ginkgo, Garlic, Echinacea, Saw Palmetto, Ginseng, St. John’s Wort, Black Cohosh,

8 Cranberry, Valerian, Milk Thistle, Evening Primrose, Bilberry, Green Tea, Ginger, etc. just to name a few. All of these are the subject of some pharmacological or clinical research, especially in Western Europe. A number of these are also subjects to positive monographs produced by the German Commission E as approved non-prescription medications4.

The sales status of the top selling herbs can fluctuate considerably as result of positive or negative media reports. Recent statistics from the USA show, for example, that Ginkgo dropped 28.9% in dollar sales. This is most likely the result of considerable adverse publicity generated in August 2002 when the Journal of the American Medical Association (JAMA) published a clinical trial on normal, healthy adults 60 years and older in which a leading ginkgo extract did not produce any significant improvement in memory concentration. The negative outcome of this trial was highly publicised by JAMA through the visual media and network news stations. The message the consumer received out of this was that ginkgo does not work despite strong clinical evidence that it is effective for cognitively impaired adults5.

St. John’s Wort is extensively used in Germany for the treatment of mild depression and a meta-analysis of 23 clinical studies published in the British Medical Journal in 1996 concluded that St. John’s Wort was more effective than placebo in treating cases of mild to moderate depression6. St. John’s Wort sales in the USA last year nevertheless dropped 38.4% probably due to well publicised negative results of a three-year trial with patients suffering from severe depression. What was less well publicised was the fact that the popular prescription antidepression drug Zoloft, used as the positive control in the trial, also failed to produce a positive result. This was an inappropriate use of St. John’s Wort which is used and clinically proven for the treatment of mild to moderate depression5.

On the good news side: Sales in the US of black cohosh (used to treat menopausal problems) surged 27.4%. This may have been the beneficial result following reports in July 2002 that a government-funded study found that long-term use of conventional hormone replacement therapy increased the risk of cardiovascular disease and cancer in women5.

I have given here some examples of market fluctuations in the herbal medicine market. The negative fluctuations are essentially based on media misrepresentation or reporting out of context. Here in Australia we have recently experienced something similar with the Pan Pharmaceuticals fiasco where complementary and herbal medicines were singled out by the media and Government spokespeople for all sorts of uninformed criticism although OTC medications and at least one prescription drug were also involved in the recall. The herbal medicines industry at all levels has been hit hard by these events, but the industry will recover in due course. This just confirms and emphasises the necessity that quality, safety, and evidence-based efficacy are as essential with herbal medicines as they are with so called mainstream medicines to minimise market fluctuations and to eliminate unfavourable perceptions. Continued growth and expansion of the herb and spice industry in general, and the herbal medicines industry in particular, depends largely on assurance of the botanical integrity of the active ingredients.

9 The Herbal Market Reports suggest that the global demand for herbal products has steadily increased by about 8% annually since 1994. The World Health Organisation (WHO) has forecasted that the global market for herbal products would be of the order of US$5 trillion by 20507.

On the other hand, the herbal medicine market in the US showed decreases during more recent years partly due to negative media reporting mentioned earlier. One also has to expect a decrease in the herbal medicines market in Australia following the Pan Pharmaceuticals disaster. But I believe these are only temporary setbacks which present new opportunities and challenges for a very bright future for phytomedicine. There is no better time than after a setback to move to provide the evidence of quality and safety, the safeguards and the trust that will restore the faith and belief of consumers into evidence-based herbal medicine.

Phillip Cheras and co-researchers of the ‘Australian Centre for Complementary Medicine – Education & Research’ (ACCMER) have quoted in a herbal industry summary prepared in July of this year that it was reported that in 2001 the value of sales in the Traditional Chinese Medicine market sector in China had reached over US$4.8 billion. The summary further stated that in 2000 the large German herbal medicines market recorded annual sales of about US$3.3 billion, that the French market was worth US$1.8 billion, the Japanese market US$2.4 billion, the Indian market US$1 billion and growing at a rate of 12%, the UK market was US$159 million and increasing by about 5% annually, and the herbal market in the US was US$5.4 billion7.

The estimated total herbal retail market in 2001 in Australia covering mass market, pharmacies, health food stores, practitioners, and mail-order outlets was worth approximately US$130 million. Less than 10% of herbal material used in the Australian market is locally produced with the exception of tea tree oil which is almost 100% of Australian origin. Europe and China are the largest supply sources of herbal material used by the Australian herb industry7.

Opportunities obviously exist for increasing market share domestically and internationally with Australian grown product.

Potential problems which would have to be addressed are: Price competition from traditional suppliers in Europe and Asia; Reluctance of the market to accept product before supply and quality can be guaranteed; Grower reluctance to develop crops before the market commits to a price and quantity; Competition from an increasing number of growers; Paucity of sufficient accurate data on existing and potential domestic and international markets; A possible lack of readily available agronomic information on potential herbal crops.

10 Production success will largely depend on long-term commitment, flexibility and investment in: Agronomic/horticultural knowhow; Broadacre mechanised production to reduce costs; Plant breeding programs to develop standardised crop; Minimal chemical intervention farming; Quality assurance programs; Development of information resources; and Prediction of market trends.

Potential or already existing areas of opportunity include:

Domestic fresh and dried/powdered culinary herbs; Fresh herb export to overseas culinary markets taking advantage of reversed growing seasons in the northern hemisphere; Production of specialty crops, e.g medicinal plant cultivation, essential oils, indigenous culinary herbs like Mountain Pepper (Tasmannia lanceolata), Lemon Myrtle (Backhousia citriodora), Aniseed Myrtle (Backhousia anisata), and others; Value adding, e.g. phytopharmaceuticals, gourmet products, herbal teas, etc; and Joint ventures with overseas investment for specific overseas markets.

Australia is a vibrant centre of growing interest in traditional Western herbal medicine, in Ayurvedic medicine, in Chinese herbal medicine, and in traditional Aboriginal herbal healing practices. The potential of many native herbs is being explored – notable examples being the Moreton Bay chestnut tree (Castanospermum australe), one of many plant medicines with potential in treating AIDS, and the culinary herbs Mountain Pepper and Lemon Myrtle.

Commercial cultivation of medicinal plants is expanding, with herbs such as tea tree (Melaleuca alternifolia) and opium poppy (Papaver somniferum) having become major crops. In Tasmania, trials are under way to try to commercially grow ginseng (Panax ginseng) and goldenseal (Hydrastis canadensis), two plants which are very difficult to cultivate.

Australia has a fortunate geographic position in relation to many important markets receptive to fresh high quality herbs and novel Australian bush spices. Australia with its ancient indigenous culture, ties to Western herbalism and location on the Pacific Rim is host to many herbal traditions. The future of Australian herb growing, herb processing, herb marketing and herbal medicine should be very exciting.

11 References

Laird S A, Conservation Challenges in the Botanical Medicine Industry, Rainforest Medical Bulletin, 7 (1), June 2000.

National Capital Poison Center, Dept. of Emergency Medicine, The George Washington University, 1997.

“Doctors, healing, and the roll of complementary medicine”, Speech by (former) AMA Federal President, Dr Kerryn Phelps to the International Holistic Health Conference – Australian Integrative Medicine Association (AIMA), Noosa; 23 May 2003.

“The Complete German Commission E Monographs”, American Botanical Council, 1998.

Blumenthal, M., Herbs continue slide in mainstream market: sales down 14 percent, HerbalGram 2003, 58:71.

Linde, K., et al., St. John’s wort for depression – an overview and meta-analysis of randomised clinical trials, BMJ 1996, 313 (7052):253-8.

Cheras, P. et al., “The Australian Herbal Industry”, ACCMER July 2003.

12 Guest Chef using Native Food Ingredients

Andrew Fielke

How I became interested in the “lack of a true Australian Cuisine” Work and travel in Europe Learning of Australia’s Wild foods The first Red Ochre – why it was so successful Australian Native Produce Industries (ANPI) – vertical integration at a cost A developing “Australian style” – from the top down. Sun dried Tomatoes and Coriander – why did they become so popular?

Where are we now with this industry Wide spread limited use – food service, retail and manufacturing – slow growth Major lack of general public awareness and confidence in the products Severe lack of capital investment in the promotion, market awareness and production No “Super Star” Chefs with a passion for Australian native foods No serious media support Production driven - an over supply situation has developed in some cases The first fresh herb and fruit retail initiatives – “Outback Pride” and “Red Ochre”

Where to now? Let’s get professional, QA systems & industry standards Public Education and awareness - on going TV Series, magazine & newspaper articles, radio talk back, cookbooks CD’s and Video tapes Create the demand and investment will follow The balancing act – combining efforts Will Australia be too slow on the take up, who will win the race, the USA or UK or us??

A taste of the future Fresh Native fruit & herb tasting

13 The Role of Standards in Herbal Medicines and Essential Oils

Mr. Ashley Dowell, BSc. Centre for Phytochemistry & Pharmacology Southern Cross University

This presentation regards the role of standards in the regulation of herbal medicines and essential oils. This is an important topic given the growth and increasing popularity of herbal medicines and essential oils for aromatherapy. My aim today is to define and outline the role of standards and hopefully raise further discussion and action about this topic.

Standards are approved and accepted parameters of quality indicators which aim to define a minimum level of quality and detect adulteration or misrepresentation. In setting standards, quality indicators need to be identified. Quality indicators focus on the components of the product which provide the characteristics desired and/or expected by the consumer.

For herbs and essential oils quality indicators encompass: • the natural range of chemical constituents present in the end-use product; • the typical concentration ranges of these chemical constituents; • the physical characteristics such as colour, odour, refractive index and optical rotation.

The quality of a product is measured by its ability to meet expected criteria. So if a product is sought for its biological or pharmacological activity, say as an antimicrobial, the active anti-microbial chemicals in the product will have defined concentration parameters. If a therapeutic claim is sought, the chemical constituents responsible for the therapeutic effects should be specified and measured in the finished product.

Chemical constituents of essential oils and herbal medicines are measured using a variety of chromatographic techniques. Put simply, chromatography is the process of separating the chemical constituents in a complex mixture into discreet, measurable units. Gas chromatography is used for measuring compound abundance in essential oils. Compounds are identified using either purchased reference standards or by mass selective detection combined with reference to electronic mass spectral compound libraries. For most herbal medicines liquid chromatography provides the best separation and sensitivity.

All this analysis costs time and money. So why should we have and adhere to standards? A standard helps to clarify terms of trade by setting out what is and what is not a stated product. A classic example of this is Tea Tree Oil. The species Melaleuca alternifolia exists in three chemotypes distributed in distinct geographic locations. What this means is that there are three different essential oils, with related but different 14 chemical profiles produced from the species, Melaleuca alternifolia. Only one, the Terpinen-4-ol type, exhibits a high level of anti-microbial efficacy. As Tea Tree Oil is sought by consumers for its anti-microbial effects, it is the Terpinen-4-ol chemotype which is used as the basis for the Tea Tree Oil standard.

A further advantage of standards is the creation of consistent product across a particular industry which ultimately enhances consumer confidence and credibility. This is currently a major problem for the natural medicines industry. Consumers have been horrified this year to discover the paucity of regulation and standards with regard to herbal medicine. Currently, labelling requirements consider only the relative amounts of whole herb or herb equivalent extracts included in a product. This tells the consumer nothing about the quantities of pharmacologically active chemicals contained in herbal medicines. So if it doesn’t work is it because the herbal medicine is no good or is it because the brand you bought contains inadequate quantities of active material?

Standards are usually set in response to consumer motivated industry demand or government regulation. Government regulation is usually only required in the case of health and safety issues. In Australia, standards for essential oils are set by the Standards Australia CH/21 committee for essential oils who meet on a regular basis. The committee comprises independent members of scientific institutes, government agencies, and industry professionals and associations invited to provide informed opinion and expertise. The Standards Association of Australia is directly associated with the ISO (International Standards Organisation) an International Authority based in Geneva, Switzerland. Currently there are moves to “harmonise” international standards. This is to avoid contradictory standards which often exist between pharmacopeoial standards which have an emphasis on health issues and official industry related standards.

There are standards available for some of the most common herbal medicines. The main sources for herb standards are the British Pharmacopoeia (now harmonised with the European Pharmacopoeia) and the United States Pharmacopoeia. Currently herb standards contained in the British pharmacopoeia are mandated by the TGA but to my knowledge their implementation in Quality Assurance is not yet policed.

Where official standards do not exist it is common for trade standards to be set by purchasers of raw material. This is currently the common practice in the herb industry where purchasers set and modify their own in-house standards for quality control. Even where official standards exist, industry can set tighter standards in order to achieve a competitive advantage when selling on to distributors.

A standard is desirable when: • significant ambiguity or dispute exists with regard to the quality of the end-use product; • health and safety requirements related to the potential activity of a product necessitate its chemical constituents to be defined; • support for efficacy claims are required for registration purposes.

For essential oils, Standards Australia will develop a standard when the volume of produce reaches a sustained and significant commercial level, usually greater than a tonne per annum as this is an indication of significant market demand. In addition there needs to be an adequate history of production (5-10 yrs) and adequate scientific data regarding ranges of chemotypic variation across the plant species and across seasons.

The process for developing a standard is initiated when a formal application is made to the CH/21 committee. Typically, data describing the range of concentrations of chemical constituents and physical parameters over several growing seasons is necessary before a draft standard is prepared. After publication of the draft the standard is open to appraisal by the industry and the scientific community, subject to which it undergoes a review process before being finalised. This usually takes several years.

The Lemon Myrtle standard is an example of a recently finalised new Australian essential oil standard. Lemon Myrtle is a popular new herbal product and its essential oil has only recently had a standard developed despite the industry existing for at least 12 years. Only in the last 7 years have market demand and production volumes reached a level adequate to support the generation of a standard. To juxtapose this example I refer to the case of Aniseed Myrtle Oil.

At present the Aniseed Myrtle industry is not producing adequate volumes to allow for the creation of an official standard. This is a problem for Aniseed Myrtle growers if Aniseed Myrtle oil attracts a higher premium than Aniseed oil as there is no formal means to differentiate the two on a commercial level. There is a further issue with safety as there exist two isomers of anethole, the chemical responsible for the characteristic aniseed fragrance. Trans-anethole is relatively non-toxic however cis- anethole is highly toxic. Without a standard there is no formal means for people involved in this industry, from growers to retailers, to understand what an acceptable quality Aniseed Myrtle oil is. The potential ramifications of a cis-anethole chemotype being traded are frightening both for this emerging industry and for the public. Having said this, trade standards are being implemented by those actively involved in the Aniseed Myrtle industry by assessing the biochemical range of Aniseed Myrtle oils and defining indicative chemical and physical parameters. Hopefully this level of understanding can be effectively disseminated to new players in this industry.

Standards are ultimately set by consumer demand although their implementation can greatly benefit producers and traders by clarifying terms of trade and enhancing product consistency and credibility which in turn improves consumer confidence. As consumer education regarding a product increases their demand for quality is passed on to retailers and distributors. In the case of herbal products where few comprehensive official standards exist, much of the standardisation is in-house. Even where an official standard exists the unofficial industry standard can be much more exclusive. This is a potential trap for producers. Before proceeding with plant stock selection it is important to know who the buyers are, and the quality of product they wish to purchase. For buyers it is important to understand quality issues relating to herbs and essential oils. Adherence to standards can be costly but can also attract higher premiums for end products and increase overall sales to consumers by improving knowledge and credibility. In this respect it may be possible to budget the costs of Quality Assurance and Research and Development as “Marketing and Promotion” rather than inconvenient and expensive “Scientific Regulation”.

16 Essential Oil Producer’s Association of Australia

Ian Southwell Research Scientist, NSW Agriculture, Wollongbar

The Essential Oil Producer’s Association of AUSTRALIA or EOPAA has the following objectives (extracted directly from the Constitution):

a) To promote the production of Australian essential oils and natural plant products b) To provide an organisation though which the members of the association may be drawn into close relationship c) To arrange regular meetings of the Association d) To appoint committees for special purposes as required e) To provide a unified approach for the industry in such things as industrial matters, Government regulations and Standards f) To establish funds for carrying out the objectives of the Association g) To assist with the co-ordination of research into essential oils and allied natural plant extracts and to disseminate research findings to members

Membership includes four grades:

1 Full membership is for producers of oils and plant extracts and producers of the plant material from which the above is extracted. Such members fill committee positions and have full voting rights. They also attend all meetings and receive all mail-outs including the Association’s informative newsletter.

2 Associate membership (Commercial) is for end-users, consultants and others with a commercial interest in the industry. Such members can attend all meetings and receive all information but do not have voting rights.

3 Associate membership (Institute or Individual) is for non-commercial Institutes, researchers and other parties. They also have the right to attend meetings and receive information and have no voting rights.

4 Honorary membership is a special category of membership reserved for significant contributors to Australian essential oil industry and is issued by invitation only. The also receive information, attend meetings and have no voting rights.

The annual fee structure reflects the depth of commercial commitment to the industry:

Full member - $1500

Associate (commercial) - $500

Associate (Institute/individual) - $150

CHO

The benefits of membership include:

(i) networking with other producers

(ii) up-to-date information via newsletter and website

(iii) representation as a unified industry group body to regulatory and standardisation bodies

(iv) representation as a unified industry group body to research funding corporations

EOPAA enables net-working through one or two meetings each year, personal contact and attendance at other essential oil activities (eg. IFEAT and other conferences and lectures, SAA and ISO meetings).

19 The newsletter is the most informative written source of information on essential oils for members. Last 16 page issue included the following items: European Pharmacopoeia – recent developments; Standards Australia matters; list of EOPAA office bearers; Editorial - comments on representation to NICNAS (National Industrial Chemicals Notification and Assessment Scheme); EEC - Cosmetics directive on labelling; Determination of flashpoints on essential oils; New Book details - Eucalyptus; Forthcoming Scientific & Technical Meetings; Reports on recent essential oil conferences; Recently published articles on essential oils; News from RIRDC (Rural Industries Research and Development Corporation); Useful addresses - Australia - Overseas: Essential oil publications.

An EOPAA website is under construction as a further means of disseminating information.

Representation to regulatory and standards organisations is also a most important EOPAA function. The association has represented the Australian essential oil producers to the TGA (Therapeutic Goods Administration), NICNAS (National Industrial Chemicals Notification and Assessment Scheme), NDPSC (National Drugs and Poisons Scheduling Committee), SAA (Standards Association of Australia), ISO (International Standards Association), and Environment Australia – export control of native species.

Representation to Research Funding Corporations is also of great benefit to members. EOPAA has a close liaison with RIRDC (Rural Industries Research and Development Corporation). Consequently RIRDC has become aware of industry needs, the RIRDC Research Manager (Essential Oils & Plant Extracts) attends EOPAA Meetings and RIRDC contributes to the production of Newsletter. In return EOPAA members assist RIRDC in prioritising funding submissions.

In conclusion, we all need to be aware of the existence of EOPAA and its activities. Furthermore anyone serious about growing essential oil plants or producing essential oils needs to seriously consider membership.

21 Curing New Industry Syndrome

Dr David McKinna Principal David McKinna et al Strategic Solutions [email protected]

Introduction I have been asked today to share with you some of my hard-earned experience gained over the last thirty years or so, on the trials and tribulations of new industry development.

Despite the ancient history of the herb and native food categories in the Australian context, these are new industries that face the challenges and the high risk of failure that is part and parcel of new industries.

Whilst I have no specific expertise in the herb industry, I have worked extensively in related areas, including native and bush foods and functional foods.

We have recently undertaken several projects in native and bush foods, and also some specific projects in medicinal extracts/function foods.

I have also had a lot of experience in new industry development. Despite the disparity of the industries that we worked in and their varying level of maturity, there are some very common themes that emerge.

In my paper today, I will spend a small amount of time specifically on the topic of the conference; herbs and related categories, although most of my time will be dedicated to talking about the challenges, problems, and solutions to new industry development.

But before I move on to that, I would first like to talk about some of the trends and critical success factors in the food industry.

The key drivers of the herbs, essences, and native foods industries On the surface the opportunities for these products are immense, with excellent potential for long-term development. There are a number of key drivers of consumer interest and potential demand for this category.

These include: Wide experimentation in food and the pursuit for new flavours and sensations Consumers today are becoming more experimental and keen to try new and interesting flavours, food styles, etc. The emphasis these days by food companies is on delivering health foods with good flavours. Consumers want to eat healthy, but are no longer prepared to compromise on taste.

The ethnic influence in our diet Australian cuisine today is described as fusion, which is the coming together of a diverse range of ethnic influences, including Asian, South American, Middle Eastern, and various derivatives of these, delivered with an Australian feel. The differentiating feature of each of these cuisines is their unique flavour profiles, which mostly comes from the herbs, spices and essences. Australian food today is a reflection of our population; a rich mix of cultures and traditions. These cuisines strongly feature herbs, essences and distinct flavours.

The growing interest and knowledge of functional foods Increasingly people are adopting foods because of their real or perceived functional properties, such as anti-oxidants, relaxation, energy, etc. A good manifestation of this is the growth of the specialty juice markets, which purport to offer these properties. Increasingly consumers are becoming aware of the functional properties of various foods, particularly vegetables, herbs and teas.

The growing interest in alternative medicines Increasingly medicines that were once considered to be fringe medicines such as naturopathy, acupuncture, iridology, etc., are now being legitimised to the point where the mainstream health fraternity is accepting them.

The growing fascination in Australia and the Australian way of life by tourists, particularly from Europe and North America Tourists want to come to Australia and have a unique Australian experience, including our unique foods and flavours.

Meal assembly Because of a combination of reduced time and reduced cooking and culinary skills, the contemporary household now assembles meals that are made from a number of pre-prepared components, put together in a very individual way. Commonly, herbs and flavour essences are used in this situation to provide a point of individuality and the personal touch. Herbs and flavour essences provide a means for the cook to put their signature on the dish.

The combination of the above factors is driving interest and demand for herbs, oils, extracts and native foods.

Despite the huge potential for the herb and related industries, at this point it its development it is still largely a boutique and fringe industry, which has nowhere near achieved its true potential. The native food market alone in Australia has the potential to be a $500 million+ industry, yet it is still a fraction of this, despite its twenty-year history. Whether and when it realises its true potential is in your hands.

Key trends influencing the agri-food sector One of the key messages I want to get across today is that regardless of what industry you are in, how small you are, and how secure you feel, you are part of the global food industry, and you need to be continually tuned in to global trends and responses to them. There are a number of key trends that are dramatically influencing the food industry. These are:

1. Globalisation The combination of rapidly improving transportation and communication, the dominance of trans-national firms, the removal of trade barriers and the migration of people around the world, is producing a truly global situation, we now live in a seamless world. With this comes competition, regardless of what industry you are in now, you will be benchmarked against the best in the world, not just in your area or state, but in the world.

2. Concentration in markets The traditional agriculture model is based on having a large number of suppliers selling to a large number of buyers, usually producing a fair price for both sides, which was called perfect competition by economists. This simple model has now been thrown out the door. Increasingly, there is massive concentration on the buying side, accompanied by continued fragmentation on the selling side. In almost any developed country, there are three or four supermarket chains that dominate the retail scene and increasingly there are large food service operators who have a large share of their particular market.

In contrast, on the supply side there are a large number of sellers. The combination of the concentration on the buying side and the continued fragmentation on the selling side, is providing massive market power to the retailers and food service operators, which they use to great effect. Coles and Woolworths, for example, control around 70 percent of the fresh food sold in Australia and the same situation is true in almost every developed country in the world. Under this scenario producers are being picked off like wood ducks. The cost and complexity of achieving supermarket distribution has increased to the degree that it is beyond many small or even not-so-small players, meaning that they are delegated to multi-national exporters with rather dismal growth prospects.

It is interesting to note that the above comments apply to agricultural commodities and fresh foods. In contrast, virtually every category in the processed food sector is dominated by one or two large players; Nestle, Kraft, Heinz, Simplot, Unilever, etc.

3. Trend towards closed supply chain links A flow on from the concentration of marketing power, is a strong move towards closed supply chain links, whereby there is total vertical integration in the supply chain through a series of strategic alliances between growers, value adders, distributors, retailers, food service users and marketers. Major retailers and industrial users want to deal with a handful of suppliers who produce products to their specifications on a just-in-time basis for a pre- agreed price, often based on the PVR material that they control. Under this scenario, producers know who their customer is, and what their specific requirements and prices are, before they even sow the seeds. This is having the impact of destroying central markets. Only a small and declining share of food now goes through central markets. It is also making it extremely

24 difficult for producers who are not tapped into a closed supply chain to be serious players.

4. Focus on food safety and product integrity A combination of food poisoning scares, food adulteration and other scandals, has made people very diligent about the integrity of the products they buy. Traceability and HACCP systems are now becoming an essential part of virtually any food business.

5. Intense competition from third world countries Another major trend is the emergence of third world countries as power players in the production of agricultural products, and this is particularly the case with herbs and horticultural products. Countries such as China, Indonesia, the Philippines and Thailand are emerging as major powerhouses in agriculture production. This is particularly true in industries that are labour intensive because their weekly labour rate equates to the equivalent of our hourly labour rate. Australia can’t compete head-to-head with these countries on commodity lines, purely on cost. It must find a significant point of difference that can sustain and justify premium prices.

6. Dominance of global brands and transnational marketing strategies One of the things I notice when I travel is the growing influence of global brands and the pursuit of transnational marketing strategies by food companies. The global processed food sector is dominated by the likes of Kraft, Nestlé, Unilever, Heinz, Simplot and Mars. Examples in agri-food include Sunkist, Chiquita, Dole and the South African ‘Cape’ brand. These global brand marketers have established their businesses off the growth of supermarkets and packaged goods. Typically, they source their product from around the world and it can be on the shelf 12 months of the year, even for products with very short shelf-life. These global marketers have an inordinate amount of market power, which makes it hard for smaller, local companies to compete.

7. De-seasonalisation of products Relating to the point made above, increasingly there is de-seasonalisation of agricultural products, even short shelf-life products such as cherries and table grapes are available on the Australian market for close to 12 months of the year. Last week I was at the Prahran market in Melbourne and could buy cherries, table grapes, and stone fruit, all from California. The demolition of trade barriers and the relatively inexpensive freight means that northern hemisphere shippers can put product into Australia on a counter-cyclical basis and be competitive. This trend is confusing consumers and changing consumption patterns.

The combination of the above factors has polarised the market between the big global players and the small niche market players. Industries and companies sitting in between these two extremes struggle to survive.

25 8. Consumer Trends It is worthwhile to spend a few minutes talking about some of the emerging consumer trends, as these are having a big impact on markets, market opportunities, etc. Some of the key consumer trends that are manifesting themselves across categories are:

The changing household structure The archetypical Australian household with mum and dad, 2.5 kids, a dog and a Hills hoist are now in the minority. More than half the households in Australia have 2 people or less, 28% have one person. The combination of the high divorce rate, people postponing having children or not having children at all, same sex families and extended life expectancy, has meant that the typical household is no longer what it used to be. This dramatically effects what they buy and eat, and how and where they eat.

Away-from-home food consumption Another defining character of consumer trends is the tendency to eat away from home. It is estimated that approximately 40 percent of the food dollar is now consumed away from home in restaurants, fast food outlets, and home meal replacement situations. This is putting downward pressure on household food products and upward pressure on food service products.

The changed nature of eating out Following on from the above point, whilst increasingly consumers are spending their food dollar away from home, there are some dramatic changes in their consumption and purchase habits. Fine dining restaurants of the past have now given way to more casual outlets that are cheaper, provide good quality food and a good dining experience. People go out for a dining experience, not just for the food; atmosphere and service is often more important than the food itself. The ethnic influence is also very strong, such as Asian, Middle Eastern, South American, and so on. Australia is particularly rich in authentic ethnic cuisines as well as fusions, which the merging of Australian cuisine with other ethnic cuisines.

Food assembly I have already talked about the growing trend towards food assembly rather than cooking from scratch.

Growing health consciousness There has been a gradual but significant shift in the types of foods that we eat, with a tendency for people to prefer healthier choices. In particular, they are cutting down on fat, salt and sugar, and increasing on fibre, anti-oxidants and fresh foods. A by-product of this is the trend towards products that have functional properties over and above pure nutrition, such as antioxidants, beta- carotenes, etc. In virtually every category now, the major growth is in the derivatives of products that promise a healthier choice. However, at the same time, there is also strong growth in indulgence products. There is now a trend towards people trying to eat healthy most of the time, but having an occasional binge or indulgence to reward themselves.

Growth of alternative medicines Following on from the above point, over the last decade there has been a dramatic legitimisation of alternative medicines, including naturopathy, iridology and acupuncture. Increasingly people are taking a holistic approach to wellness, which embraces their diet, the adoption of naturopathic medicine, alternative medical treatment, exercise, relaxation and spirituality. This

26 has reached the point where they are now reluctantly being recognised by the mainstream medical profession.

One of the characteristics of the Asian culture is that it is very rich in alternative medicines and functionality. For example, in the Chinese culture, food is eaten for its nutritional qualities, but also its spiritual or health benefits. Virtually every food in most of the other Asian cultures has some significance other than just nutrition. The Chinese character for food is the same as for medicine; everything you put in your mouth has a purpose over and above nutrition. This point is highly pertinent to the herb industry.

The above factors augur very well for herbs and dried culinary, essential oils, medical and functional foods, and native and bush foods. The Asian culture is increasingly influencing our eating habits.

Understanding which business you are in and how to best leverage your position In any business, it is important to understand what business you are really in, as this will allow you to develop the best type of business model to operate the business.

The business you are in is not defined by the product or service you provide, but the customer needs that you satisfy.

Herbs/spices/essences/native foods are ingredients in foods, not foods per se. These products are specialist ingredients that provide a unique flavour. Typically it is a hidden but essential ingredient that is used in very small quantities. These flavour sources typically account for less than 1% of the volume of the product but have a dominant influence on the final taste.

The important message here is that for your industry to grow and develop, it must be in partnership with mainstream food processors. You need to work closely with them and form close strategic alliances.

Attempting to develop the industry in isolation from mainstream food industries will almost certainly lead to failure.

I strongly believe that the best and fastest way to develop the native foods industry is to focus on producing concentrated ingredients rather than trying to develop markets for finished products for the retail or food service market. This approach instantly broadens the scope of the market and allows the industry to leverage up its scarce resources to more quickly get a result. A 1 or 2% share of the multi-billion dollar mainstream food industry is far less than having 100% of a small, limited niche market. The key message here is that the industry needs to start to build bridges with the major food processors.

There will always be an opportunity for niche market operators to produce and market their own boutique products in local and tourist markets, but this is not the answer for the mainstream industry.

27 Another important consideration for smaller operators is whether the key motivators for being in the industry are lifestyle or business reasons. You can’t have a bit each way, either you run it as a business, following best practice business principles and make decisions on business grounds, or you decide that you are in it for the lifestyle. There is absolutely nothing wrong with the latter, but don’t expect to become a millionaire.

Critical success factors in agri-foods The trends that have been described above have dramatically changed the scene with respect to food marketing, both in Australia and overseas. The hurdle for success in marketing foods in Australia now has been dramatically raised in the past few years because of the combination of the above factors. In the food business today, there are really only two options, to be a mainstream player selling to the major supermarkets and food service outlets and being a part of a closed supply chain link, or being a small niche market player. There doesn’t appear to be anything in between. The following are critical success factors to be a player mainstream:

• Critical mass It is essential to be a big enough player to have the continuity of supply, volumes, market presence, resources, expertise and funding to be a participant in the mainstream. In the food industry there is a threshold ceiling, which businesses and industries must break through in order to survive and grow to their full potential. The costs of entry into the mainstream supply chain are very high and the costs of staying in are even higher. It requires a massive amount of resources and expertise, which is beyond most small players or even small industries for that matter.

• Product integrity Suppliers now need to assure their customers that their product is high quality, reliable, safe, and that it is produced from environmentally and socially acceptable production systems. Rigorous systems based on objective measurement are essential. However, in today’s work of self regulation, it is up to the industries themselves to develop systems that their customers have faith in. For agricultural products, having a HACCP based quality assurance and safety and integrity system is an essential element of being in business. Increasingly, seamless traceability is becoming a condition of supplying. It is a lot easier to develop and implement these systems early in the piece, rather than trying to introduce them at a later stage.

• An acceptable product description labelling and integrity system A continuation of the above point, but one important enough to justify its own heading, is the need for uniform and reliable product description labelling systems. These are systems that give a clear indication to the consumer of the fitness of use for the product. A good example of this in Australia, has been the MSA program for meat, which has dramatically changed the Australian meat industry. Consumers and those in the supply chain before them want to confidently buy products that they know will serve the intended purpose, and are prepared to pay a premium for products that they have confidence in.

28 • Branding and market presence Typically, today’s supermarkets have a minimum threshold for a product to maintain its position on the shelf. For a dry grocery product, the normal thing is to have a minimum of four stock turns per SKU, per week, per store, across the whole network. To achieve this, almost invariably requires a strong marketing program linked to branding. Supermarkets and major food service operators want to deal with large, national suppliers with trusted brands that are household names. One of the biggest problems for new industries and for small companies is that even if they can manage to get distribution for their products on supermarket shelves, they struggle to maintain it, because they don’t have the marketing support to generate the throughput. Packaging and labelling is also an integral part of having effective shelf presence.

• A point of difference and a unique selling point A shopper in the modern supermarket has somewhere around 40,000 products to choose from all vying for their dollar. To succeed in this highly competitive environment, it is necessary to have a product that satisfies their needs and provides something that is unique and different. This is particularly the case for the product portfolio we are discussing here. The thing that differentiates a product from a commodity is that it has a point of difference or unique selling point. There is an old saying “commodity sellers are price takers, product marketers are price makers”. The only way you can survive in commodities is to be the lowest cost producer in the world. In a recent project, we found that China can produce dehydrated garlic at one-tenth the price that Australia can. In these circumstances, there is no way we can compete.

• An efficient and competence distribution system One of the major barriers to success for new industries and smaller operators is their lack of a distribution network to get their product to market. It stands to reason that if your product isn’t on the retail shelf, consumers can’t buy it. The most common reason for the failure of food companies is getting distribution for their product. Over the past few years, the supermarkets and the food service industries have focussed on establishing highly efficient inventory and distribution systems that give them the product they want, when they want it, and only just before they need it. Central markets are in a downward trend and it is likely that they will become insignificant within the next decade.

• An effective market development program The markets for new and emerging products don’t exist, they need to be built from the ground up. This requires a comprehensive market development program, based on a well thought through and well funded marketing strategy. A major factor constraining in the development of the native food industry is the lack of identity and consumer understanding of what it is and how you use it. Typically for agricultural products, it is necessary to develop two or three streams to this strategy, a retail stream, a food service stream, an export stream and a value-adding stream.

• A value-adding and processing outlet Increasingly, it is important to have a value-adding and processing outlet for agricultural products. There are two reasons for this. The first is that increasingly consumers want to buy convenience products, which is a key driver

29 for processed foods, pan-ready vegetables, value added meats, herbs in a tube, etc. Similarly, food processors want to just add these product to their recipe with a minimum of preparation. The second reason why there is a need for a value adding outlet is that invariably only a minority of the particular product is suitable to be sold in first grade fresh form. This means that the remainder either has to be dumped or processed; typically around 40%. If there is a strong viable processing outlet for product, it allows the industry to raise its standards for the fresh product, which benefits both parts of the industry.

As I mentioned earlier, the best way to develop these industries is to market processed ingredient products, both for the retail and processed food ingredient market. This requires significant processing/value adding. Almost certainly, a new or relatively small industry will not be able to raise the capital to install the state-of- the-art processing and value-adding plant needed. To achieve this will therefore require some form of partnership linkage of strategic alliances with other partners further along the supply chain.

Applying these principles to the herb and native food industries I will now translate and summarise the best practice principles into some key points for the herb and native food industries:

Position the industry as a specialist ingredient supplier and work closely with the mainstream food industry. Develop industry clusters based on the natural groups within the industry: culinary herbs, medicinal herbs, native foods, spices, essences, etc. It is likely that these clusters will be consolidated in certain regional areas. Focus on building centre of excellence, sharing ideas, building joint marketing programs, supply chains, and collective expertise. Establish an appellation control type product description and labelling system focussing on product quality, integrity, safety and fitness for purpose, and as an umbrella for individual sector HACCP programs. Use the appellation control program as a basis for an industry brand, which marketers can use under licensed agreements.

Collective marketing in the 21st century A central issue, which has plagued agricultural development around the world since the agrarian revolution, has been how to achieve critical mass through collective marketing. A traditional solution to this in Australia has been either statutory marketing authorities with central-desk selling, or cooperatives. Both of these models have tended to be judged to be failures in the contemporary commercial and political environments. Statutory marketing authorities are no longer politically acceptable to any side of politics, even though the single-desk selling model is by far the most powerful way to balance off the market power of buying cartels.

With cooperatives, whilst there has been some limited success, the cooperative model is also generally in disrepute. Even the very largest successful diary cooperatives

30 have now moved to a corporate structure. This then raises the question of how new industries get to the critical mass through a collective marketing regime.

The buzz words in the 21st century are clustering, strategic alliances, and closed supply chain links. Clustering really means a whole lot of individual businesses working together under an umbrella whilst maintaining their own independent ownership or management. One device that can be used to achieve this clustering, and which has proven to be highly successful, is the use of industry regional brands. A good analogy for these brands is the franchising system whereby highly successful businesses such as McDonalds, Harvey Norman, etc., can successfully operate despite having a large number of independent owners and operators. The success of these companies is to use branding as a disciplinary tool to bring uniformity and achieve collective marketing. The idea is to use the brand to create the market presence and the market pull. Because there are a large number of operators who collectively exceed a critical mass threshold, they have the resources and market presence to attract consumers. The brand marketers then use this market power to discipline their licensees through trade mark legal protection. A condition of using these brands is that they conform with certain systems including product integrity, quality, labelling and branding, distribution and so forth. These branding models have successfully been used for product categories, as well as for regional areas. An example of this, in the latter case, is the Food Barossa brand, which has successfully united 40 independent businesses under one umbrella in the Barossa Valley.

A second platform in the quest for collective marketing in the 21st century is the use of strategic alliances to generate closed supply chain links. The defining feature of the closed supply chain is that each step in the supply chain is linked to the next through various forms of strategic alliances.

The process starts by working with an end customer to develop products and services that meet their needs. Each part of the supply chain puts in place programs to deliver to the customers’ requirements. The typical closed supply chain includes growers/producers, value adders/processors, distributors/logistics, and retailers/food service outlets. Producers know where their product is going before they even plant the seeds.

Under this scenario, the producers collectively provide a product that meets the market requirements and that is consistently reliable, with safety and integrity. Processors then confidently process this and supply and sell on to distributors who then, in turn, sell on to end customers. Typically, retailers and food service operators are prepared to pay a premium for a consistent supply of reliable product that meets the customers’ needs. Processors and value adders, in turn, can pay a premium to their suppliers for the same reason. Often in these models, there is cross ownership along the supply chain. A good example of this is Banksia Beef, which involves a group of producers in a particular area, producing product to a processor’s specification who, in turn, markets to supermarkets in Asia and in Australia.

The combination of industry/regional brands and strategic alliances is a very potent way to achieve the critical mass and cover off the critical success factors that were mentioned above.

31 The New Industry Syndrome The Australian native food industry and, I suspect the herb and essence industries, are suffering from new industry syndrome. In agri-food, this is the equivalent to the common cold.

Some new industries get over this syndrome and move on to become very healthy, prosperous businesses; for example wine. Other industries struggle to fight it off, and never reach their potential. In some cases it can be a near-death experience, such as, for example, the ostrich and emu industries. The jury is still out on the olive industry. The symptoms of new industry syndrome are the same, regardless of the industry. They are also extremely predictable. The cure for this syndrome is also well understood and is available to anyone who wants to seek help.

The symptoms The common symptoms of new industry syndrome are the same for every industry: They struggle to find profitable outlets for their product. The key players in the industry are the “big boys” (processors, marketers, supermarkets, etc.) who aren’t interested in talking to small operators. They lack capital at the on-farm level, as well as on the industry level. Government doesn’t take them seriously. They don’t have the momentum to take off. They know that they need marketing but can’t afford it and don’t know how to go about it. They lack the on-ground resources, aims and legs to make it happen.

The causes The causes are as follows:

1. Inability to achieve critical mass New industries fail from the fact that they do not have the volume, the marketing resources, the capital and the expertise to take their industry and develop it to its full potential. For any industry there is a take off point, beyond which they have the momentum to continue to propel themselves. The big issue is breaking through the barrier. Typically new industries involve a large number of small operators, who are usually either hobby farmers or running the enterprises as a sideline to a mainstream enterprise. They are on a steep learning curve in terms of production systems, grains produced, genetics, etc., and don’t really have the capital or the time to invest. As a result, both individuals and the industry collectively don’t have the critical mass, and therefore the resources, to do what they need to do.

For the native food industry in particular, the problem is that is has been heavily reliant on wild-picked products where the volume is low and the quantity and quality is unreliable. The native food industry is a classic case of an industry with great potential, but an inability to surpass the critical mass thresholds necessary to sustain an effective and efficient processing sector, distribution, marketing and so forth. It is

32 essentially a cottage industry with fairly unsophisticated growing practices, access to genetic material and know-how. It took the mainstream agricultural industries 100 or so years to get to the point where they are now, so it is not surprising that the native food industry has a long way to go.

2. Industry disunity A major contribution to the lack of critical mass is the lack of industry unity. One of the common characteristics of new industries is that they tend to be driven by pioneers who have a strong sense of individuality and passion for what they are doing. The upside of this is that they have great energy, the downside is that they find it hard to work with others. The reality is that for these industries to succeed in their own right, they need to work with others, but find it difficult.

This point is particularly relevant to the herb and native food industries, given the diversity in terms of product ranges and marketing direction, which is only serving to confuse the market.

3. Failure to develop the upstream part of the business Almost without exception, new agricultural industries are production-driven. The whole emphasis is on producing the product, with the expectation of making some money out of it. The big mistake that people make is that they don’t understand that you make the money out of selling product, not growing it, and also that consumers buy products, not raw agricultural commodities. No thought is given as to how the product is going to get to market. They fail to take the steps required to develop the supply chain. When investors were paying $20,000+ for a pair of breeding ostriches, they never gave thought as to how and where they were going to process their product, or how they could get it to market.

Almost without exception, there needs to be a stage of value adding, including grading, packing, processing and packaging. The next essential element is distribution, either to retail or food service customers, either in Australia or overseas. Increasingly with globalisation, the food business is becoming a closed shop.

Either you are a mainstream player, supplying supermarkets and food service users, or a niche market, selling product off the back of a truck in the local farmers’ market. There doesn’t seem to be much in between. Industries won’t survive the new industry syndrome, as small niche market players; they either have to do what it takes to get into the mainstream business, or be resigned to become a recreational producer.

4. The failure and inability to invest in market development Markets rarely just drop out of the sky; they need to be developed. Market research is needed to identify the prime prospective market and market segment. Market development activities need to be developed; product development, test marketing, in-store tasting, promotional material, advertising, etc. It is not that industries don’t think about market development or recognise the need for it. The problem is that they don’t have the expenditure or resources to undertake it.

The herb and native food industries are in particular need of market development given that the industry suffers from a lack of clarity in terms of marketing positioning. The Australian consumer is not quite sure what they are buying. If you talk to consumers about Indian food, Thai food, Chinese food or Vietnamese food,

33 they will understand exactly what you mean. When you talk to them about Australian native foods they are confused. Is it bush tucker, is it Aborigines around a campfire, is it Les Hiddens with a pocket knife eating a witchetty grub, what is it? Because of the fragmentation of the industry and the fact that it is all going in different directions, they haven’t been able to reach a united view about how the products should be positioned in the market place. As a result, consumers are confused about where native foods sit.

The cure There is a simple, eight-step cure to new industry syndrome:

Step 1 Get your act together as an industry; form a strong industry body. Build up one strong national body that represents and speaks on behalf of the entire industry.

The big problem typically is that there are a number of fragmented, under-resourced bodies that use all of their energy on squabbling amongst themselves. If you want government to take you seriously, speak with one, united voice. Increasingly the government view is to help industries that have their act together.

Step 2 Develop a strong industry strategy plan based on a shared-industry vision. Initially, the focus should be on doing the market research and developing the supply chain.

Step 3 Develop an umbrella industry management structure, under which, individual producers can market and value add their product. There needs to be some mechanism for collective marketing and industry development. I will touch on this a bit later on in the paper.

Step 4 Establish a commercial entity to implement the strategic plan. An essential element of this is to form a strong board, comprising talented, skilled people who are there for their expertise, rather than what they represent. A balance of independent directors is strongly recommended. Another essential element is the appointment of a well-credentialed CEO who you will need to pay at market rates.

Step 5 Put in place structures and mechanisms to fund industry development. Industry development needs a solid stream of money. There are various ways to achieve this, including compulsory or voluntary levies, fees, operating margins, etc.

Step 6 Establish a rigorous, HACCP-based product quality, integrity and description system that can form the basis of an industry brand. This needs to be based on a process of continuous improvement. As I highlighted earlier, few individuals will succeed on their own; they must find a way to work together. 34

Step 7 Develop up-stream alliances with partners who can provide the resources, expertise and critical mass to get the product to market.

Step 8 Make it happen!

Conclusion The business models described above are proven and are increasingly being adopted by industries around the world. In our view, and based on our extensive experience, industries and individual operators face the choice of adopting these models, or some derivative of them, or being confined to being a minute niche market player with little control over their long term destiny.

At present, the herb industry is largely a boutique, fringe industry that is dominated by part-time or hobby farmers, mostly with small holdings.

Without doubt the herb/essence/native food industry has the potential to be a multi- million, global industry, generating great prosperity for all players.

The industry appears to me to be at the crossroads. Whether it fulfils its potential is largely up to the decisions that are made within the next few years.

The roadmap to success is clear and there is plenty of guidance available. Is the road you are taking to the supermarket of success, the new industry cemetery, or the intensive care ward? Don’t leave the decision too long. Often the simple common cold can be fatal if not treated early.

35 Lavender: The Essential Oil

Dr Heather MA Cavanagh*, Ms Therese Moon and Dr Jenny M Wilkinson School of Biomedical Sciences, Charles Sturt University, *e-mail: [email protected]

Introduction Lavender research at Charles Sturt University (CSU) encompasses many disciplines, ranging from analysis of biological activity, novel plant breeding, micro-propagation, DNA fingerprinting and oil analysis to oil fingerprinting.

The current bioactivity research focuses on the effect of a range of essential oils, hydrosols, plant extracts and mono-floral honeys, including lavender and a wide range of Australian natives, on bacteria, fungi, viruses and parasites. Anti-cancer, anti-oxidant and wound-healing properties are also being investigated in addition to evaluation of the mutagenicity and toxicity of these products to determine safe usage levels. Current research in our laboratory has found no carcinogenic (cancer-causing) properties associated with any of the lavender oils tested to date in vitro.

The Problem Lavender has been grown commercially in Australia for many years, however, the number and size of lavender farms has significantly increased in recent years. Approximately 600 lavender farms are now known to be present in Australia with the majority still in the development stage. The largest concentration of farms occurs in NSW and Victoria but they are also present in Tasmania, Queensland, Western Australia and the Northern Territories. Although the majority of the lavender farms established more than 5 years ago remain small cottage industries, usually reliant on tourism and farm gate sales for income, there is an increasing trend towards the establishment of larger farms (100-200 acres) and cooperative production/sales of oil. Many of these farms will begin to produce significant increase in the volume of oil and plant material within the next five years with the number of new farms increasing annually.

A recent survey of the delegates at the 6th International TALGA Lavender Conference in indicated that although the majority of respondents currently produce oil in varying quantities, 25% of respondents indicated that they would not be producing oil on a significant scale for 2-5 years, due to recent/planned planting. From the same survey, it was shown that the majority of Tasmanian and mainland farms have planted varieties of L. angustifolia. Again, however, there is a growing trend towards commercial cultivation of other species such as L. stoechas, L x intermedia and L. x alllardii and over 95% of farms grow 2 or more species of Lavandula.

While the Tasmanian produced L. angustifolia is of perfume quality, very little L. angustifolia grown on the mainland is suitable for this market, probably due to the

36 growing conditions, and many new lavender farms are now planting those varieties more suited to local conditions. Unfortunately, however, other than farm gate sales and the local aromatherapy industry, no internal or export market currently exists for large quantities of oil derived from these plants. 100% of respondents indicated that they would significantly increase production should novel and/or export markets be identified.

The Answer? The primary markets for plant extracts are the pharmaceutical, agricultural/- horticultural and the perfume industries. Recent data has shown that Japan, Europe and the USA are the main consumers of these products.

Various figures are stated as to the amount of L. angustifolia oil that is imported into Australia but it is approximately 25 tonnes per annum while imports of other Lavandula oils are estimated at approximately 250 tonnes. Consequently, considerable interest by existing and potential growers in production for import replacement is occurring in Australia at present. Australia has a reputation for producing clean, high quality products, an image that could be utilised in both import replacement and export opportunities.

There is no doubt there is increasing consumer and scientific interest in complementary or natural therapies or that the therapeutic potential of a number of plant based compounds, including essential oils, is enormous. To enter this market, however, we must be able to sort the truth from the fiction, the myth from the reality.

Background Documented evidence for the use of lavender as a therapeutic agent can be traced back to the ancient Roman and Greek empires. Lavenders (Lavandula spp.) belong to the family Labiatae and have been used either dried or as an essential oil for a variety of therapeutic and cosmetic purposes. The most commonly used species are L. angustifolia, L. latifolia, L. stoechas and L x intermedia and the chemical composition of oils distilled from these plants has been extensively studied. The essential oil is produced, usually by steam distillation, from both the flower heads and foliage, but the chemical composition differs greatly, with the sweeter and most aromatic oil being derived from the flowers.

The oil is traditionally believed to be antibacterial, antifungal, carminative (muscle relaxing), sedative, anti-depressive and effective for burns and insect bites. Today, the pure oil is most often used in aromatherapy or incorporated into soaps and other products as a pleasant fragrance or as an antimicrobial agent but it is increasingly being incorporated into foodstuffs such as tea, ice-cream, mustards and baked products. Yet despite its popularity and long tradition of use it is only recently that science-based investigations into the biological activity of the various Lavandula species, other than L. angustifolia, have been undertaken to any great extent.

We are particularly interested in the comparison of the biological activity across the range of Lavandula oils. The various lavenders have similar ethno-botanical properties and major chemical constituents, however there are some differences in the reported therapeutic uses for different species. The main constituents of Lavandula

37 oil are linalool, linalyl acetate, 1,8-cineole, b-ocimene (usually both cis- and trans-), terpin-4-ol and camphor. Each of these constituents can vary significantly in oils derived from different cultivars with the camphor content currently being the main determinant in market value, application and aroma for the perfume industry. With respect to therapeutic or agricultural value, however, levels of other constituents also play a crucial role in bioactivity.

The varieties of lavender currently under investigation include a range of essential oils, both Australian and European grown. Although some aspect of the biological activity of lavender oils is well documents, it should be noted that the majority of research on Lavandula essential oils to date has been carried out on L. angustifolia and very little work has been done on other varieties/species. It is also worth noting that while the different lavenders have similar medical uses and major chemical constituents there are some differences in reported therapeutic uses between the various types. Preliminary data published by our laboratory and other groups suggested that there may be some differences between species, however, again, most species that have been examined are European grown and we know that growing conditions affect the oil constituents. Since these activities may be related to compounds specific to each species, part of the aim of the research at CSU is to target particular lavender types to particular therapeutic uses or to produce information regarding recommended blends of oils with a broad ranging use.

Methodology No one method is consistently suitable for detection of antimicrobial activity in essential oils for many reasons. For instance, the viscosity of the oil and the solubility of the oil in water, which can hamper the diffusion of the oil through agar. This is part of the reason you see papers from different laboratories, working on different oils, using a range of methods to look at antimicrobial activity, all of which can make it very confusing and very difficult to compare different oils directly.

Variations on three main methods are used in this type of research: disc/well diffusion, agar dilution and broth dilution. Both the diffusion and dilution methods have been developed to be accurate measures of antibacterial activity and are routinely used in antibacterial susceptibility testing. It is important to note, however, that the substances regularly tested by these methods are generally hydrophilic in nature and so the tests have been optimised to this condition, whereas essential oils are volatile, insoluble in water, viscous and complex substances.

There is a need for a standard and reproducible method for assessing essential oils as currently many methods are employed with no standardisation occurring. To this end, as part of our research we have both evaluated existing methods and developed novel testing protocols, based on existing broth dilution, agar and disc diffusion assays, which are both robust and reproducible for testing the antimicrobial activity of essential oils. These protocols are easily adapted for the testing of the aqueous hydrosols and extracts, thus allowing direct comparison between the different test substances.

In disc diffusion assays, a small paper disc is impregnated with the oil of choice and placed on the surface of an agar plate which has already been coated with the bacteria of choice. The bacteria should grow to cover the entire surface of the agar if no

38 antibacterial compounds are present in the oil, however, if antibacterial compounds are present the bacteria will not grow around the disc. The problem with this type of assay rests with the ability of the oil to diffuse through the agar. If the oil cannot move through the agar perhaps because it is not soluble in water, then it will effectively get ‘stuck’ on the paper disc and the bacteria will grow up to the disc making it look as though no antibacterial compounds are present. In fact they could well be there but they simply can't get off the paper disc and into the agar. When this method works, it also allows you to dilute the oil and place various dilutions on the paper discs. This in turn allows you to see just how good the antimicrobial activity of the oil is. As you are probably aware, many of these oils can cause skin irritations when used undiluted, it is therefore essential to determine how much the oil can be diluted yet still retain it’s antimicrobial activity. This also allows us to determine to some extent how much of the antimicrobial constituent is likely to be present in the oil and to give some direct comparisons between different oils. Both agar dilution and broth dilution methods depend upon being able to successfully mix the oil with either agar or broth. As mentioned, many oils will not mix with these water-based substances and laboratories often have to resort to including additional agents, such as detergents, to enable the oils to be mixed. This introduces yet more complicating factors that have to be controlled for in any experiment. As groups continue to publish data based on both disc diffusion and broth dilution, however, it is necessary to analyse all oils by both methods in order to allow us to compare results to the published data where available.

Current Research The current project aims to identify and evaluate not only those oils with antimicrobial activity but also any activity associated with the hydrosol derived from the distillation procedure and the plant tissue itself, both of which are presently considered waste products. During steam distillation of essential oils large quantities of aqueous distillate is produced, commonly termed the hydrosol, floral water, hydrolate or distillate water. There has been significant interest in the use of hydrosols in the complementary medicine and natural health markets. Hydrosols are attracting significant market value and are in high demand, particularly in the USA and Europe.

It is claimed that hydrosols contain many of the beneficial components of the plant from which the essential oil is derived without tannins and irritant compounds at a fraction of the cost of pure essential oils. In addition hydrosols are often advocated for internal use, unlike essential oils, which are generally toxic if ingested. However there are few, if any, scientific studies investigating the composition or biological activity of hydrosols and there is generally a lack of standardisation in the industry in terms of hydrosol composition particularly with respect to essential oil content. Nevertheless, as hydrosols do contain variable quantities of essential oil in addition to other water-soluble components, it is possible that these products may have biological activity. In addition, it would seem likely that lavender leaves and stem will also contain biologically active compounds which may provide either novel human and veterinary therapeutic agents or anti-fungal agents suitable for the agriculture/horticulture markets.

Although lavender essential oil is not generally used internally, as with use of any essential oil, regular use and handling/preparation raises concerns about the potential

39 for either acute allergic or chronic adverse reactions. Tisserand and Balacs (1999), in their often cited text on essential oil safety, state that L. latifolia and L. angustifolia do not produce skin sensitisation and are only mild skin irritants and L. angustifolia does not produce phototoxicity. However no comprehensive analysis of the toxicity of lavenders, other than L. angustifolia, has been undertaken. As more and more people grow greater varieties of lavender and purchase an increasing number of products based on these varieties, further research must be undertaken to address these questions of safety and efficacy.

Results Antibacterial Detailed results will be presented during the seminar, however, in summary, no activity was found to be associated with any hydrosol against any bacteria/yeast tested to date by disc diffusion assay. Significant differences, however, are apparent in the antibacterial activity of different oils and also between the activity of each individual oil on the range of bacteria. Only ‘English grown’ L. angustifolia oil showed any activity against Ps. aeruginosa (minimal). Each result is based on a minimum of six independent assays. All results are compared to existing antimicrobials including Vancomycin, Methicillin, Ampicillin, Tetracycline and Nalidixic acid.

When these oils/bacteria are assayed by an optimised broth dilution assay, however, we see an entirely different profile and a significant increase in the apparent antibacterial activity, including the detection of several oils with good activity against Ps. aeruginosa at concentrations as low as 1%. Some of the oils, at certain concentrations appear to be bacteriostatic rather than bactericidal (ie prevent growth rather than killing the bacteria). For example one of the 10% L. angustifolia and one of the 1% L x allardii samples allow bacterial growth to resume at approximately 6 hours post-exposure to the oils. Some levels of synergism and antagonism were also detected.

It may be more realistic, due to this varying activity to produce blends of these oils for specific clinical applications.

Antifungal Initial results indicate that some of the oils tested to date are fungistatic not fungicidal. Plugs incubated in the presence of at least 10µl of oil show no growth over a 12 day period, however, when plug is subsequently removed to fresh plate (in the absence of oil) growth of fungi begins on about day 4 or 5 then reverts to normal growth pattern.

Interestingly, it appears that the volatiles are effective inhibitors of fungal growth and sporulation. Exposure of agar to volatiles for one hour prior to inoculation prevents fungal growth (12 days) even in the absence of oils following the initial one-hour incubation. This may have significant commercial implications.

Future work Collation of the data being generated will allow the generation of chemical profiles associated with specific biological activities. Comprehensive analysis of each extract utilised in this study is essential in order to compile specific GC/MS profiles of lavender extracts with specific medical, veterinary or agricultural uses. It will also identify target markets (eg. therapeutic or agricultural applications) for these products which will, in turn, provide advice for the Australian lavender industry on the commercial viability of particular varieties. It will also provide information for lavender breeders on required characteristics for development of novel varieties.

Through a thorough evaluation of Lavandula essential oils and extracts we aim to provide information on which species/varieties of Lavandula can be grown as commercially viable alternative crops in Australia for markets other than the perfume industry. It is hoped that the findings of this study will lead to new market opportunities, value adding and have import replacement and export potential.

A full reference list for the material cited above is available from the presenter on request.

Information regarding the plant breeding program and DNA fingerprinting can be obtained from Dr Nigel Urwin at Charles Sturt University, School of Agriculture ([email protected]).

41 Agricultural chemical issues facing small, developing industries: The Culinary Herb Industry as an example

Peter Scholefield Principal Consultant Scholefield Robinson Horticultural Services Pty Ltd PO Box 650, Fullarton SA 5063

The agricultural industries that are represented at this Convention are small compared with the major industries in Australia and they are all in the phase of industry expansion and development, and at various stages of industry maturity.

The issues faced by developing industries are many and the following are some that I have observed;

• Production technology is not fully established.

• Fertilisers and chemicals types and rates are not understood.

• Varieties are still being introduced/selected and assessed.

• Post-harvest handling is not developed.

• Quality standards are difficult to maintain because of the number of small growers.

• Marketing; - Small numbers of growers in the market can achieve good prices but as industry production increases, it is sometimes difficult to sustain these prices. - Often small growers compete with each other too much to the un-necessary detriment of price.

• There is a need for processing methods (drying, freezing, etc) to even out supply to market and utilise product that does not meet the top quality standards for fresh markets.

• Organisation of broad industry issues is usually left to a small volunteer band.

• No formal structure exists for the collection of funds for R&D and marketing across the industry.

In a recent review our company carried out on the culinary herb industry the issues of the highest priority that emerged were the structure and organisation of the industry body, and the availability of permits for chemicals to control pests and diseases.

This paper will focus on the requirements for obtaining permits for the use of agricultural chemicals on minor crops like herbs, native foods, etc.

42 The Agricultural Chemical Regulatory System

Registration Before agricultural chemical products can be sold or used in Australia, they must be registered by the Federal body Australian Pesticides and Veterinary Medicines Authority (APVMA).

Registration offers farmers, food producers, the chemical industry and consumers assurance that chemicals on the market are efficacious (ie. they work), suitably formulated and labelled, and safe for humans when used as directed.

It also aims to ensure that chemicals do not have unintended adverse effects on the environment and do not leave unacceptable residues in produce marketed in Australia and overseas. The following data are required to be presented to APVMA in order to register a new chemical:

• Chemistry and manufacture. • Toxicology. • Metabolism and Toxicokinetics. • Residues. • Overseas trade aspects of residues. • OH&S. • Environmental studies. • Efficacy and safety.

The fees and costs associated with gathering the above data are high and companies look very closely at the commercial market for chemicals on new crops before embarking on the registration process. For minor crops where the market for chemicals is small, the number of registered chemicals is low.

Minor-use Permits Where a chemical is not registered for use on a minor crop, say herbs, it is illegal to use the chemical on the crop. In this case, APVMA may grant a minor use permit to use the chemical on crops that are not listed on the registered label. These minor use permits are issued for crops where the size of the industry is small and registration is not likely to occur because use of the chemical will not generate sufficient economic return to meet the costs of registration.

Minor use permits are generally restricted to chemicals that are currently registered on other crops and for which some scientific data on residues is available. Residues in crops need to be assessed to establish appropriate Maximum Residue Limits (MRLs) and withholding periods as part of the minor use permit.

Time limits are placed on minor use permits and APVMA may require that additional residue data is presented before an extension of time for the permit is approved.

43 Examples from the Culinary Herb Industry Applications have been made since 1998 by the Australian Culinary Herb Growers’ Association (ACHGA) for a range of insecticides, fungicides, weedicides and other chemicals to be approved with minor use permits for use on herbs. Depending on the chemical and the data available on residue levels, the permits may be short-term, about one year, or up to five years. APVMA may require new residue testing to be carried out before a permit can be re-issued.

Herbs are a group comprising of different types of plants of many species. The main herbs grown in Australia are parsley, coriander, dill and basil (80% of production) but the list of herbs grown is much longer than this. Herb products can be different types of leaves, roots, seeds, etc. Therefore, the application of chemicals for pest and disease control are likely to produce different MRLs in different types of herb crops and it is not possible to treat them all as one group.

The chemicals that have been issued permits for culinary herbs are listed in Table 1. A total of 20 chemicals have permits but most expire in January and March 2004. Carbaryl expires in September 2004 and Phosphorous acid in September 2006. Clearly there is an urgent need to resubmit applications to APVMA for the permits that will expire in the first half of 2004.

Table 1 : Chemicals with current minor use permits for culinary herbs

APVMA Permit Active Ingredient Permit Current Until Insecticides PER 3872 Dimethoate 31/3/04 PER 3873 Petroleum oil 31/3/04 PER 3875 Bacillus thuringiensis 31/3/04 PER 3879 Bifenthrin 31/3/04 PER 4031 Fipronil 31/1/04 PER 4034 Emamectin 31/1/04 PER 4036 Imidacloprid 31/1/04 PER 4512 Pirimicarb 31/1/04 PER 5673 Carbaryl 30/9/04

Fungicides PER 3876 Cupric hydroxide 31/3/04 PER 3877 Iprodione 31/3/04 PER 3881 Chlorothalonil 31/3/04 PER 4028 Sulphur 31/1/04 PER 4041 Procymidone 31/1/04 PER 5026 Phosphorus acid 30/9/06

Weedicides PER 3878 Linuron 31/3/04 PER 3880 Fluazifop 31/3/04 PER 4029 Clethodim 31/1/04 PER 4040 Metolachlor 31/1/04 PER 4042 Trifluralin 31/1/04

Other PER 3874 Metaldahyde 31/3/04

44 A list of chemicals that had permits that have expired is presented in Table 2. Most of these chemicals have had applications for renewal of the minor use permits re- submitted and approval has been achieved. The Permethrin re-application is still being reviewed by APVMA. Benomyl has not been re-submitted on technical advice.

A number of chemicals are in the process of testing by Crop Protection Approvals and prior to submission to APVMA for a minor use permit. They are: • Clethodim - re-application. • Metalaxyl/Mancozeb - rejected by APVMA, re-submitted. • Pirimicarb - re-application. • Permethrin - re-application. APVMA closely reviewing.

Table 2 : Chemicals with minor use permits for culinary herbs that have expired

APVMA Permit Active Ingredient Date Expired Permit Renewed Insecticides PER 1741 Permethrin 31/8/00 No. Application submitted PER 1775 Bifenthrin 31/8/00 Yes PER 1813 Bacillus thuringiensis 31/8/00 Yes PER 1819 Petroleum oil 31/8/00 Yes PER 2206 Carbaryl 31/12/01 Yes PER 2207 Dimethoate 31/12/01 Yes PER 3994 Permethrin 30/9/01 No. Application submitted

Fungicides PER 1741 Benomyl 31/8/00 Yes PER 3882 Benomyl 31/8/01 No PER 1742 Chlorothalonil 31/8/00 Yes PER 1774 Iprodione 31/8/00 Yes PER 1812 Cupric hydroxide 31/8/00 Yes PER 2208 Phosphorous acid 30/12/01 Yes

Weedicides PER 1719 Linuron 31/8/00 Yes PER 1772 Fluazifop 31/8/00 Yes

Other PER 1814 Metaldahyde 31/8/00 Yes

Quality Assurance Systems The major retail outlets for horticultural produce, the supermarket chains, require suppliers to adopt quality assurance systems for the production and post-harvest handling of produce. Growers supplying supermarkets with herbs also must be part of these QA systems.

An important component of the QA system is the requirement for the agricultural chemicals used for pest and disease control to be approved by APVMA and the State authorities. The minimum approval needed is a minor use permit if full chemical registration is not available.

One confusing aspect of the QA system is that there are two mrl codes that apply. APVMA approves an mrl for the legal use of a chemical on a crop in Australia. The Food Standard Code uses a mrl that applies to the legal sale of foodstuffs. If changes occur to an APVMA mrl, there is sometimes a lag before the new mrl is incorporated into the Food Standard Code. Most of the supermarket QA systems use the Food Standard Code and herb growers need to be aware of their position if any changes occur to APVMA minor use permits.

Chemical Requirements for Export Markets A report just released (Parker, 2003) has investigated the chemical mrl requirements for potential export markets for Australian herb and spice products. Identification of the similarities/discrepancies between the mrls in these countries and Australia will lead to the definition of a suite of chemicals for pest and disease control that is acceptable in Australia and in a range of export markets.

The Australian industry must gain minor use permits for these chemicals from APVMA at the same mrl standards that are acceptable in the markets of overseas countries. These approvals will then facilitate the application for “Import Tolerance Documents” necessary for herb products to gain entry to overseas markets.

This ambitious project proposes to align the chemical standards for Australia with those for overseas markets. Strong industry support is essential for this project to achieve its aims.

Funding The process of obtaining minor use permits for the use of agricultural chemicals requires field testing and residue analysis, both of which are expensive.

Rural Industries Research and Development Corporation (RIRDC) has been supporting work on determining mrls in herbs to use in minor use permit applications for the legal use of chemicals for pest and disease control. Individual herb growers are also investing considerable funds in residue testing to satisfy their particular market requirements.

Crop Protection Approvals (CPA) is a company funded by HAL and the vegetable industry for assisting with minor use permit applications.

There is a need for a levy or voluntary contribution mechanism to provide funds that can be matched by RIRDC or Horticulture Australia Limited (HAL) for specific project work of benefit to the industry. ACHGA has given high priority for funds to be used for obtaining permits for a full suite of chemicals for pest and disease control.

Summary and Conclusions The culinary herb industry has been used as an example to demonstrate the issues small, developing horticultural industries face with chemical control of pests and diseases. Growers need to satisfy APVMA, the regulator of agricultural chemical use, and the food safety requirements of the supermarkets.

46 Some of the issues that herb growers face are:

• No agricultural chemicals are registered for use on herbs.

• Minor use permits have been approved for herbs but these permits are for short periods of time and renewal requires the generation of new data on mrls.

• The herb industry currently has 20 chemicals with minor use permits but many will expire in 2004. There is an urgent need for additional data to be gathered to support new applications for permit approval.

• The resources required for the development of mrls for herbs are great. RIRDC and individuals from the herb industry have been contributing funds for this work, but there is a need for the broader industry to provide more funding.

• An ambitious project has recently been proposed to align the allowable chemical residue levels in Australia with those of overseas countries where Australian herbs are likely to be exported. This project will be of great benefit to the Australian herb industry.

References Del Santo, P. (2002). Generation of residue data to set MRLs for pesticides on culinary herbs. RIRDC Final Report, Project AUC1A.

Parker, J.C. (2003). Chemicals for export herbs/spices. RIRDC Publication No. 03/…. (in press).

Scholefield, P.B. (2003). Issues affecting development and capacity of the Australian Culinary Herb Growers Association to service the industry. RIRDC Publication No. 03/... (in press).

Treverrow, N.C., and Hine, D. (2000). Determining whether pesticide application rates for culinary herbs meet MRL requirements. RIRDC Publication No. 00/161.

NRA Facts No. 2 (2000). Registering agricultural and veterinary chemical products. NRA (now APVMA), Canberra. p 8.

NRA Facts No. 9 (1999). Minor use program for agricultural and veterinary chemicals. NRA (now APVMA), Canberra. p 4.

NRA Information Sheet (1999). Off-label permits for minor and emergency uses. NRA (now APVMA), Canberra. p 2.

NRA Information Sheet (1999). Understanding off-label permits. NRA (now APVMA), Canberra. p 2.

NRA Information Sheet (undated). Permits scheme. NRA (now APVMA), Canberra. p 2.

Useful Websites www.apvma.gov.au/minor_use/general www.apvma.gov.au/permits 47 Food safety issues for the Australian native plant, food and herb industries

John Faragher Department of Primary Industries, Knoxfield, Victoria P.B. 15, Ferntree Gully DC, Vic., 3156. Phone: (03) 9210 9279 Fax: (03) 9800 3521 E-mail: [email protected]

“SALAD KILLED MY BABIES” the headlines screamed! In this English case, salad may have killed two unborn babies. In addition, this story cost the salad industry over a billion dollars in lost sales. Closer to home the Garibaldi metwurst food poisoning episode left people dead and injured, the people responsible in jail, sales of salami decimated and businesses destroyed.

Every year in Australia over 10,000 people go to the doctor with food poisoning and many more get food poisoning but do not report it (NT FoodSafe® Program Internet site).

Food safety is important because: • people can be injured and killed • the food supplier can be legally liable • your industry reputation and sales can be badly damaged • governments are increasingly introducing and enforcing food safety legislation • your markets care – consumers assume food safety and if the get sick they are outraged • large buyers are demanding excellent food safety management • your competitors are getting it right, promoting themselves and getting sales.

The reason food becomes unsafe is usually because it’s contaminated with chemical, physical or biological matter. In some plant products there is also the question of whether they naturally contain poisonous substances.

The major causes of food borne illness are: • inadequate cooking • improper holding temperature (not hot or cold enough) • contaminated equipment • unsafe food sources • poor personal hygiene.

48 For horticultural products the major causes of illness have been: • disease organisms (eg bacteria) transferred to food by handlers who did not use good hygiene (eg berries in USA) • disease organisms transferred to food from organic materials (eg Listeria in sheep manure transferred to cabbages and coleslaw) and from animals and birds (eg Salmonella from rats to peanuts and peanut butter). • disease organisms that grow in prepared food, for example salad mixes that are kept for too long and not kept cold (eg Listeria in fresh fruit salad killed 6 people in NSW in 1999). • Seed sprouts (in USA) • pesticide residues? – we don’t know • toxic compounds in the plants? – eg magic mushrooms, alkaloids in green potatoes

For native plant foods, and possibly herbs, there are several other factors that may make it necessary to pay extra attention to food safety: • some products are harvested from wild, or semi-wild, situations where the grower or harvester does not have control of the environment • for some foods we don’t know the detailed chemical composition and the risk of toxic chemicals being present • differences between plant species, ecotypes and cultivars may not be known • product identity may be difficult to establish • the microbiology of human pathogens on these foods is largely unknown (eg what bacteria are present on these foods, what grows on them?) • consumer use patterns may not be well understood (eg cooking or not) • tracing the origin of foods and the way they are processed and used may not be easy • product changes during processing, storage and marketing may not be understood.

Many people are making efforts to reduce the risks of illness. Governments have introduced new food safety standards. Buyers are demanding evidence of risk management. Some industries are taking the initiative and developing food safety guidelines and model food safety plans for their members.

In the following notes I will outline: 1. Australian food safety standards 2. Commercial demands 3. What assistance is available? 4. What’s in it for you? 5. Our RIRDC food safety information project

49 1. Food Safety Standards The Australian Food Standards are developed and published by Food Standards Australia and New Zealand (FSANZ), a statutory authority.

The Food Standards are implemented under State and Territory government legislation.

Compliance with the standards is managed by local councils!

The Food Standards Code contains, amongst other things: • General food standards • Food safety standards • Primary production standards

1.1. General food standards These standards apply to all food producers, suppliers, handlers and sellers, including primary producers and include: • Food additives – these list what can be added to certain products – if a product and additive combination are not specified, then they cannot legally be used. • Processing aids – eg washing agents - approved aids are listed and maximum residue levels stated. • Residues – mainly pesticides - maximum residue levels (mrls) are listed. • Contaminants and natural toxicants- eg metals, fungi, lupin alkaloids. • Novel foods – “The purpose of this Standard is to ensure that non-traditional foods which have features or characteristics which raise safety concerns will undergo a risk-based safety assessment before they are offered for retail for direct consumption in Australia and/or New Zealand”. Industry and the Rural Industries R&D Corporation (RIRDC) have carried out assessments of the risks from natural compounds in several commercial native plant foods (Hegarty et al 2001). They concluded that, with due care, the normal use of the commercial bush foods studied did not raise any serious concerns. They elaborated on the caution needed with the current and new foods. Native plant foods may require registration as novel foods. However industry representatives are proposing to FSANZ that a list of commercial native plant foods be considered regular food, not novel food. • Prohibited plants (must not be added to food or sold as food)– eg several Solanum species, borage, cannabis, comfrey. • Microbiological standards – eg for bacteria, including for seed sprouts and dried spices. • Packaging. • Labelling.

50 1.2 Food Safety Standards The three mandatory standards are: Standard 3.1.1. – Interpretation and application Standard 3.2.2.– Food safety practices and general requirements Standard 3.2.3. – Food premises and equipment

These new standards have now been adopted by legislation in most states (SA, Vic, Tas, NSW, Qld, and ACT). WA and NT are still discussing them and moving towards adoption. While these standards are new, they have a lot in common with the existing food safety and hygiene regulations that most food businesses already operate under.

Primary producers do not have to abide by these standards unless they sell directly to the public, or substantially transform food from its original condition. Selling directly to the public includes roadside stalls, markets, bartering and raffling. In addition, some retailers and wholesalers who buy from primary producers are requiring them to be registered as a food business and abide by the standards. For example, my local greengrocer won’t buy fruit from a hobby farm unless it is registered as a food business and meets the food safety standards! Substantially transforming does not include dividing, peeling, cutting, cleaning, trimming, freezing, grinding, milling or packing, but includes manufacturing, canning and making jam, pickles preserves and juice.

1.2.1 Food safety practices and general requirements Some of the practices and requirements that are spelled out are: • Food handlers – must have skills and knowledge in food safety and hygiene (see below). • Food businesses must notify the enforcement agency (local council) of the existence of the food business. • Food must be kept cold (less than 5°C) if it is likely to contain disease- causing organisms. • Food must be handled and sold quickly. • Food must be displayed, processed, packaged and transported to avoid microbial (eg bacterial) contamination. • Processing may include a step to reduce the level of microbes in the food (eg cooking, washing). • Foods must be cooled after cooking. • Food handlers – health and hygiene requirements.

Businesses can meet the requirements of this standard if they have a food safety program, or a process, set out in written guidelines, that are based on sound scientific advice and recognised by the relevant food industry. This could be a formal food safety program (see 1.2.3 below), a proprietary/commercial food safety program, or recognised food safety guidelines (eg AFFA 2001a).

51 1.2.2 Food premises and equipment Some of the practices and requirements that are spelled out are: • Design of floors, walls and food contact surfaces. • Water supply – must be potable (drinkable) unless it can demonstrated that use of non-potable water will not adversely affect safety of food. • Cleaning and sanitising surfaces and utensils. • Methods for waste, waste water and sewage disposal. • Methods to exclude dirt, pests etc. • Provision of hand washing facilities and toilets. • Regulations for food transport vehicles.

1.2.3. Food Safety Programs This is a voluntary FSANZ standard. The aim is to assist food producers and handlers to have their own program to control the risks and hazards that can arise during production, manufacturing and handling. It’s based on the Hazard Analysis Critical Control Point approach (HACCP). A food safety program: • systematically identifies hazards • identifies where and how hazards can be controlled • monitors the control processes • takes corrective action if the processes are not under control • has a written food safety program document • reviews the program • keeps records • has regular auditing (or a compliance check by local government if it is not classified as a high risk business).

Most states have not introduced this standard, but are considering it. Victoria has introduced it. Food Safety Victoria provides templates for people to develop their own programs. Horticultural organisations, such as the Melbourne Market Authority, also provide templates and training so that food handlers have the required skills and knowledge and can become registered food businesses. The authorities will accept at least some proprietary/commercial food safety and HACCP programs as meeting the requirements for a food safety program.

Fund raising events do not require a food safety program.

There are several attractions of this food safety program approach, including: • The food business takes the initiative for meeting legislative and commercial requirements. • Having an approved plan means that you meet the “Food safety practices and general requirements” standard.

52 • Having a plan makes it easier to convince buyers that you have a good risk management system in place and easier to adopt Australian and international, accredited food safety systems that some buyers require.

1.3 Primary Production and Processing Standards FSANZ are starting to develop these standards, which will include horticulture and be enforceable across Australia. These standards will use the food safety program approach outlined above. They will be developed over the next few years.

2. Commercial demands The commercial world is demanding change in food safety management quicker than government, in many cases. Many large buyers are demanding that their suppliers are registered food businesses and have a food safety program. Leading international companies are demanding comprehensive, audited food safety management systems. Even some local greengrocers will not buy fruit from a hobby farm unless it is registered as a food business.

There are many food safety management systems available, for example: • basic food safety programs eg Food Safety Victoria templates, FoodSafe®, Melbourne Market Authority template • relatively simple commercial programs tailored for horticultural products eg Freshcare, SQF • customer and retailer schemes eg Woolworths Vendor Quality Management Standard • comprehensive, internationally recognised programs designed for food processing eg SQF, ISO. Leading European systems incorporate not only management of food safety and quality, but systems to ensure environmentally friendly and ethical food production.

3. What assistance is available? There is an almost overwhelming amount of information available on food safety standards, food safety programs, food safety guidelines, state legislation and local council requirements. Some of these sources of information are listed below.

The people who manage the compliance with food safety legislation, at the coalface, are the Environmental Health Officers of local councils, so they are very important people to work with.

Your buyers will tell you what they demand, so they are also very important people to work with!

There are many commercial food safety systems available to help you comply with legislation and buyers requirements, at a cost. Some are listed above (section 2) and by AFFA (2001b).

53 Industry bodies are doing things to assist their members, by developing food safety guidelines, food safety program templates and training courses (eg Agriculture, Fisheries and Forestry – Australia, or AFFA, Horticulture Australia, AusVeg, the freshcut vegetable producers and Melbourne Market Authority). These guidelines, training courses and templates are an excellent, inexpensive way to introduce better food safety management and to meet the requirements of legislation and buyers.

Under the “Food safety practices and general requirements” standard, people who handle food must have appropriate skills and knowledge in food safety and hygiene that equate with their responsibilities. Formal training is not necessarily required (but may be a simple way for some people to meet this requirement). Skills and knowledge can also be acquired by in-house training, reading, following specified operating procedures or attending courses run by industry associations or a local council. Food industry training boards set out the competencies (skills) needed for specific work and develop training packages and courses (eg a Food Safety Supervisor’s certificate including modules on workplace hygiene and cleaning and maintaining premises). Basic courses are run by TAFEs, community houses, local councils (eg FoodSafe®) and industry organisations such as Melbourne Markets. Farmbiz subsidises some of this training.

You can use the simple (inexpensive) training and food safety systems that are available to get started and meet legislative requirements and then, if necessary, upgrade to meet buyers’ requirements.

4. What’s in it for you? Good management of food safety will: • reduce the risk of you injuring someone and being liable • help maintain the reputation of your business and your industry as a supplier of healthy food • enable you to keep on the right side of the law • enable you to sell - as more buyers demand some form of accredited/ approved food safety management you won’t be able to sell without it • enable you to promote your product as safe and healthy eg if your food safety system has a logo, use it on your label and advertising • improve quality and business management.

5. Our RIRDC food safety information project The Rural Industries R&D Corporation has funded our institute to provide advice to the native plant food industry on how to meet the food safety requirements of government, buyers and the community. The information will also be relevant to other industries.

We will also investigate ways of using labelling to promote the authenticity, excitement and value of native plant foods, as well as meeting the legal labelling requirements.

54 This paper and talk are one of the first steps in this project. We will meet with industry members and groups, identify your needs and then provide more verbal and written advice. We may run workshops and we can provide written information for newsletters and web sites. If you would like advice or information, or would like to suggest activities in this project, please contact me.

Conclusion Your markets, governments and the community are requiring greater assurance of food safety. It’s in your interests to give them that assurance and to promote your product as meeting their needs.

References AFFA 2001a, Guidelines for On-Farm Food Safety for Fresh Produce, Agriculture, Fisheries and Forestry – Australia. (No hard copies available). http://www.affa.gov.au/corporate_docs/publications/pdf/food/guidelines_9-01.pdf

AFFA 2001b, Food Safety and Quality Systems: A Business Perspective, July 2001, Agriculture, Fisheries and Forestry – Australia. http://www.affa.gov.au/corporate_docs/publications/pdf/food/survey7-01.pdf

Hegarty, M.P., Hegarty, E.E., Wills, R.B.H. 2001, Food Safety of Australian Plant Bushfoods, Rural Industries R&D Corporation (RIRDC) Publication No 01/28. http://www.rirdc.gov.au/reports/NPP/01-28.pdf

NT Government FoodSafe® Program http://www.nt.gov.au/health/healthdev/environ_health/environmental/foodsafe.shtml

Further information Food Standards Australia and New Zealand (FSANZ) Food Standards Code, Safe Food Australia user guide and fact sheets and much more. Internet site: www.foodstandards.gov.au Advice e-mail: [email protected] Advice phone: 1300 652 166

State Health (Human Services etc) Departments Following are some Internet sites:

Tasmania: http://www.dhhs.tas.gov.au/publichealth/foodsafety/foodstandards.html

Victoria: http://www.foodsafety.vic.gov.au/

NSW Health: http://www.health.nsw.gov.au/

Queensland Health: http://www.health.qld.gov.au/healthtopics/restopicmaster.asp?frmhealthtopic=FoodS afety&I1.x=26&I1.y=15 Public Health South Australia: http://www.health.sa.gov.au/pehs/Default.htm

Northern Territory Department of Health and Community Services: http://www.nt.gov.au/health/

NT Government FoodSafe® Program http://www.nt.gov.au/health/healthdev/environ_health/environmental/foodsafe.shtml

Western Australia Department of Health: http://www.health.wa.gov.au/index.cfm

ACT: http://www.health.act.gov.au

Local councils Health departments and Environmental Health Officers

State Agriculture and Primary Industries Departments Commercial/proprietary food safety systems Some of these are listed above in section 2.

Training Local TAFE colleges, industry training boards, local councils National Training Information Service: http://www.ntis.gov.au/

Melbourne Market Authority Di Robinson, Marketing Coordinator, Ph 03 9258 6105

Food Safety Guidelines for the Australian Fresh-cut Produce Industry (2nd ed.), Barlass, M., Tomkins, B., Faragher, J., Chennell, A., Premier, R. and Hickey, M. (Eds.) (1998), Cooperative Research Centre for International Food Manufacture & Packaging Science. (Copies from John Faragher $25).

Safe Vegetable Production. A Microbial Food Safety Guide for the Australian Vegetable Industry, Behrsing, J. and Premier, R. (2002), Horticulture Australia Limited (Ph 02 8295 2307).

Food Safety of three Species of Native Mint, Fulton, A. (2000), Rural Industries R&D Corporation (RIRDC) Publication No 00/38, http://www.rirdc.gov.au/reports/NPP/00-38.pdf

Acknowledgments Funding was provided by the Rural Industries R&D Corporation and Department of Primary Industries Victoria. Bruce Tomkins and Robert Premier of DPI Knoxfield, FSANZ and Food Safety Victoria provided valuable advice.

Disclaimer: The advice provided in this publication is intended as a source of information only. Always read the label before using any of the products mentioned. The authors, The State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaim all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

56 Preliminary evaluation of some medicinal herbs

Rowland Laurence Tasmanian Institute of Agricultural Research

Project Investigators Dr. Rowland Laurence, Craig Palmer, Patricia Saunders, Tasmanian Institute of Agricultural Research Tim Groom, Botanical Resources Australia Pty Ltd

Background Following the Keane Report, entitled “Export market opportunities in the USA for natural plant extracts”, a number of crops were selected as worthy of consideration, and this project is an evaluation of some of those crops deemed to have the most potential.

Objectives The project will pursue the development and commercialisation of one or more species of medicinal herbs that are being investigated and deliver comparative data to the stakeholders on the growth and marketable yield of the species investigated.

Work undertaken to date The Tasmanian Institute of Agricultural Research in conjunction with Botanical Resources Australia Pty Ltd, initially identified a number of species that could be investigated. Following the World Conference on Medicinal and Aromatic Plants in July 2001 and subsequent discussions with industry representatives, four species were chosen for trialing in Tasmanian conditions. These being Astragalus membranaceus, Vaccinium myrtillus, Stevia rebaudiana and Tanacetum parthenium.

The project has acquired lines from several individuals and companies from within Australia, Europe, North America and Asia who have interests in medicinal herb production. As opportunities have arisen, further acquisition of genetic material has continued. During the 2001-2002 growing season three lines Astragalus membranaceus were established in replicated field trials at Forthside Vegetable Research Station, along with field plots of Stevia rebaudiana. Two lines of Vaccinium myrtillus were greenhouse reared at Stoney Rise Government Centre in preparation for the 2002-2003 growing season, as well as four more Stevia lines, three Tanacetum lines and a further Astragalus line. Botanical Resources Australia Pty Ltd have grown field plots of one variety of Tanacetum during the 2001-2002 season.

Most Astragalus plants, originally transferred to field plots from pots eighteen months ago, survived winter conditions and regrew strongly in 2002-03, although survival was associated with the level of exposure. These plants reached a height of

57 1.5 metres, flowered and set seed freely. Root samples have been taken for extract and assay and laboratory methods are being investigated. In addition, an area of about one-tenth of a hectare was directly sown into a commercial paddock in 2002 and, although plant stand was low, in part due to seed condition after inoculation, this area has also grown well and flowered in the current season. Samples have also been collected for analysis. A third, smaller area of Astragalus was also sown in a commercial paddock in December 2002. In summary, the species has grown well to date and analyses to be carried out will assist our assessment of the extract’s marketability.

Additional lines of feverfew have been acquired and seedlings planted out in replicated plots. These plots have grown strongly, flowered and samples of extract have been taken by the industry stakeholder for analysis. It is hoped that levels of extract in these will be higher that those found in the material sown originally, which were less than required by the market at that time.

Seedlings of bilberry continue to grow slowly and spasmodically. However, about 1,000 seedlings have now been produced and preparations are underway to transfer these to two sites – the first on a local research station and the second on the land of a commercial collaborator at Waratah on Tasmania’s West Coast, which, we believe, will provide beneficial, cold and wet conditions for the species. In addition, a Graduate Diploma student will soon begin a series of experiments aimed at improving our ability to propagate the plant material via both tissue culture and softwood cuttings.

Rowland Laurence and Tim Groom met with Professor Midmore and associates on Stevia development in January 2003 and have exchanged seed and tissue samples with the latter. Stevia planted into the field in North-West Tasmania in February 2002 grew well until the onset of winter, whereupon most vegetative top growth died back to ground level. The presence of Sclerotinia and other diseases after this time contributed to only a minority of the plants regenerating in the spring of 2002. While more of these plants have succumbed to disease, the remainder have grown and flowered and some seed has been collected. A program of propagation by stem cuttings has now provided sufficient material to plant out about 0.2 hectares in the next few weeks and a similarly-sized, second site will be established in September 2003.

The above indicates that, while establishment of some of the species under investigation has been slow, prospects of gaining sufficient data to meet the objectives of this initial project are good. This will require a full season’s work in 2003-04 and agreement has been reached with RIRDC to extend the completion date to 30 June 2004. In addition, the industry partner in the project, Botanical Resources Australia Pty Ltd, has indicated that the company is keen to support further work on these and other medicinal plants and a proposal to RIRDC to this end will be prepared. We appreciate the Corporation’s support.

Funding Botanical Resources Australia Rural Industries Research and Development Corporation

58 Commencement and completion date September 2000 – June 2004

Project collaborators Tasmanian Institute of Agricultural Research Botanical Resources Australia Pty Ltd

Contact details Dr Rowland Laurence, Tasmanian Institute of Agricultural Research, PO Box 447, Burnie TAS 7320, Ph:(03) 6430 4901 Fax:(03) 6430 4959 Email: [email protected]

Tim Groom, Manager Agricultural Businesses, Botanical Resources Australia Pty Ltd, PO Box 3251, Ulverstone, Tasmania 7315 Ph:(03) 64250508 Fax:(03) 64254468 Email: [email protected]

59 Workshops and farm visits

This document comprises participant reports on each of the workshops and farm visits, the facilitator’s report, and a summary of the evaluations for each workshop and farm visit.

Overall, the workshop and farm visits were well received, with many positive comments received regarding the practicality and relevance of the issues covered in both workshops and visits. Many delegates stated that they felt the workshops and visit broke up the Convention into more manageable chunks of information, and gave them a rest from ‘information overload’.

However, a number of delegates, and workshop presenters, also stated that they felt that more time could have been allocated to allow a more detailed examination of the issues presented.

Reports by attendees and presenters All delegates attended all four workshops and farms. In each session, delegates were asked to rate the sessions on a scale from one (low) to 10 (high) for three areas; involvement, relevance to their needs, and the overall presentation. They were also asked to describe the best features of workshops and to suggest how they could be improved (if improvements were felt to be required). The mean responses for all sessions are summarised in the table for each workshop or visit.

Specific delegates were approached to provide written feedback on workshops and farm visits. These are presented below. Also given below is the feedback received from workshop presenters on their sessions.

Workshop 1 – Soil Health: “Do you know what is sustainable”

Evaluation Summary

Involvement Relevance Presentation 8.0 8.2 8.6

Best Feature of Workshop Workshop could be improved by Facilitator’s knowledge & enthusiasm, More time, fewer concepts, slower discussion presentation

Participant’s Report - by Andrew Pengelly – Pettitt Botanicals Soil health is an issue of obvious significance for farmers, however there is more to it than N-P-K balance. While conventional fertilisers are able to replace these macronutrients, Dr. Ingram has assessed that up to 80% of inorganic fertilisers are lost to the water table within a year. The key to retaining nutrients in the soil, and for ensuring crop health and good drainage, is knowledge of soil organisms.

60 In this workshop we learned that different crops require ratios of fungi to bacteria. Vegetables prefer bacterial-dominated soils whereas many herbs require fungal- dominated soils. Other crops such as grains prefer an equal fungal to bacteria ratio.

Techniques for increasing soil organism levels and adjusting the balance to suit specific crops were discussed, including a simple design for a compost tea machine. The workshop divided into smaller groups to assess the soil requirements for a selected crop. Parsley in the case of our group. We assessed that parsley requires bacterial dominated soils, and this could be achieved in part by green manuring between crops and application of green mulches. Soil compaction should be avoided to prevent anaerobic fermentation.

This was a most interesting session that left one feeling we had barely touched the surface of Dr Ingram’s extensive knowledge and experience in matters concerning the soil.

Facilitator’s Report - by Dr Elaine Ingham I think the convention was beneficial for the attending growers and industry representatives. I had some great feedback from people during and after my talks. Many people are still not aware of the benefits of a healthy soil foodweb, and this convention allowed growers to be exposed to this new movement towards growing herbs and other commercial crops in a sustainable and environmentally friendly way.

Many growers were not aware of the research and results that have been achieved using the soil foodweb principles, and I spoke individually to growers from Tasmania, Newcastle, Lismore and surrounding areas. This shows there was a good representative cross section of growers from many agricultural areas.

The major comment that I received from speakers and participants attending the convention was "1 hour was not enough time for speakers to relay their entire message". There was not enough time for questions to be answered and activities to be completed during the 1 hour allocated. I was only allowed by the time available, to lightly touch on selected points during my talk. My regular workshops are usually a minimum of 5 hours. This is the time needed to fully explain to people the benefits of the soil foodweb. One hour did not allow participants to really understand the complexity of the soil foodweb, and become involved in-group discussion during the allocated time.

I suggest that the talks be extended to at least 2 hours, but still keep the activities as part of the talk, as this allowed participants to network and discuss workshop concepts amongst themselves.

Further information: 1 Crawford Road East Lismore, telephone 02 6622 5150, website www.soilfoodweb.com.

61 Workshop 2- Marketing Management “How well do you know your markets” – Ian Hemphill

Evaluation Summary

Involvement Relevance Presentation 8.3 7.6 9.3

Best Feature of Workshop Workshop could be improved by Presenter’s knowledge & clear More time, better blackboard lighting, explanation, participant involvement less noise from next door

Participant’s Report - by Magda Verbeek – Trickledown Herbs The workshop was aimed at drawing attention to the various requirements that buyers of culinary herbs and spices expect their suppliers to be able to provide them. Produce can be supplied in 3 ways - fresh, frozen and dried.

Ian Hemphill gave a brief run down of what buyers expect their suppliers to be able to provide them.

Groups were then asked to choose one dried herb from a selection of four and make a presentation which covered the key elements discussed, including 3 reasons why a buyer would want to get further information from a potential supplier.

Expectations of buyers are: 1. Continuity of supply. Quality is subjective but consistent quality desired. Price is important but consistency of supply is more important; 2. A statement of GMO free status is expected; 3. Bulk index preferred. Where the Bulk index is the volume measured in a given container. Weight divided by volume = Bulk Index; 4. Batches need to have an analytical report attached, especially if not “Certified organic” product; 5. History of supplier may be important initially; 6. Quality control system documented. May be certified organic but otherwise QA needs to be evident. eg. lab analysis; 7. Samples and product specification needed; 8. Once quality, bulk index, QA and objectives are determined suppliers need to stick with them for the resources that are available.

The workshop was the first one our group went to. Therefore there was a bit of shyness and uncertainty in the presentation from the groups.

Facilitator’s Report - by Ian Hemphill – Herbie’s Spices The aspect that distinguished this conference from previous ones that I have been involved in, was the higher proportion of actual growers attending. There also

62 appeared to be a more determined willingness to recognise the need for a peak industry body, and accept the reality of apparently disparate groups working to identify common goals. I was a little surprised to discover in my workshops, that considering many of the existing growers are producing food, there was a knowledge gap when it came to food safety.

I think that the next conference needs to allow more time for the workshops, say 2 hours, however the field trips were excellent and a good way to avoid participants feeling "over conferenced".

Workshop 3: Production Management

Evaluation Summary

Involvement Relevance Presentation 6.9 7.0 7.0

Best Feature of Workshop Workshop could be improved by Product samples, practical knowledge, Narrower topic, more group activity & honesty, discussion discussion, more time

Facilitators Report - by David Forest – NSW Institute of TAFE I had some concerns about handling this workshop due to the broad range of industries and locations from which people were likely to come. A suggestion for future workshops is for topics to be decided upon from a survey question on the registration form. As there is a large amount of information presented in the conference folder most people hadn’t read or at least digested the contents, most participants were not too familiar with the points raised and therefore there was a limited ability to interact within the workshop. I think participants expected a lecture. I tried to link production into research, extension, compliance requirements and marketplace to gain interest where people had experience. The issues that came up were only occasionally directly site and crop specific but hopefully there was enough commonality to the varying interests of the participants that they felt that the workshop was worthwhile.

Workshop 4: Are you playing by the rules?

Evaluation Summary

Involvement Relevance Presentation 7.9 7.7 8.5

Best Feature of Workshop Workshop could be improved by Interaction, discussion, regulation More time, more group time, less group awareness, 2 (3) facilitators (second time day)

63 Participant review - by Dr John Faragher, DPI Victoria This workshop addressed the unappealing, but necessary, subject of how to deal with the increasing amount of government legislation to do with occupational health and safety, food safety and environmental management. The audience was a mixture of growers, processors, marketers, researchers and people thinking about entering the various industries. Paul Moosberger pointed out the really important, practical issues to do with safety of people working on farms and in businesses, of keeping our food safe and the need to manage our environment carefully. He also made it clear that the responsibility for these things falls on employers, employees, farmers and processors, that is individuals like those in the audience, and that Governments are serious about seeing that this legislation is complied with.

Some of the important issues raised by the audience included the costs of compliance, which are a severe burden on small businesses, the complexity of the requirements and the myriad of organisations that oversee the legislation. Nevertheless most people went away apparently glad they’d attended and certainly better informed. Paul and his assistants’ excellent educational approach certainly made it an interesting and worthwhile session.

Facilitators report – by Paul Moosberger, NSW Institute of TAFE (in collaboration with Genevieve Carruthers & Arthur Akehurst – both NSW Agriculture) The feedback, at the time of our workshop was very positive, and we feel that the industry as a whole is in a strong position to take the next steps towards having a consolidated body to represent it.

From the delivery aspect, time did unfortunately restrict the ability to cover many issues associated with such a wide topic area, and respond to many questions raised at the time.

It would have been ideal for all participants to be involved in each area that was covered in the workshops rather than just hear about what others had considered in feedback sessions. This issues however, is difficult to resolve, as we would need more time to adequately cover all issues with a resulting increase to the cost of the convention.

Due to time restraints we also did have to assume some degree of prior knowledge of those attending. This was unfortunately a huge variable. The workshop did allow for some of this prior knowledge to be expanded by group participants, however there was some degree of ‘hijacking’ with regard to personal agendas by some.

Major issues raised by workshop groups for the herb, native food and essential oils industries that would be useful in distributing to participants.

Environment Food Safety OH & S - Herbicide use - Registered use of - Toxicity and sensitivity of - Fertiliser use chemicals herbs to workers - Land clearing - Residues on food - Machinery use - Bush fire safety (MRL’s) - Staff training for - Spray drift - Contamination after licensed/ticketed equipment - Product residue produce leaves your - Weather exposure for - Soil erosion control workers - Ground water - Water quality - Slippery surfaces for contamination - Chemical training workers and public - Use and disposal of - Personal hygiene - Safe workplace environment packaging and plastics issues and procedures - Animal manures as - Visitors on farms fertilizers - Contractors on farms - Manual handling - Supply and maintenance of PPE (personal protection equipment)

Farm Visit, Site 1, Tryton Worm Farm – by Greg O’Connor, Alfarm Business Services

Evaluation Summary

Involvement Relevance Presentation 8.8 8.8 7.6

Best Feature of Workshop Workshop could be improved by Governments working together, Seeing more worms in action, more time guided tour, worm beds

The visit to Tryton’s worm farm I found to be enlightening and an insight into how local government is endeavoring to kill two birds with one stone, and hopefully show a profit at the same time! The ‘birds’ I refer to are problems of disposal of green and organic waste, and maintenance of grass and gardens on council sporting fields, parks and public reserves. The potential for profit arises with the sale of worm castings to local and remote farmers.

Mr David Hundt, the CEO of Tryton Group, eloquently explained and demonstrated the process from the arrival of the waste, the pasteurization process, the removal of some non-vegetative matter in the trammeling process, the worm farm whereby the castings are formed, the harvesting of the solid castings & removal of plastics and finally the production of compost tea and other liquid formulations.

The groups went away convinced that this has to be a step in the right direction.

65 Farm Visit, Site 2, Thyme Farm

Evaluation Summary

Involvement Relevance Presentation 8.7 8.2 6.5

Best Feature of Workshop Workshop could be improved by Improvisation to make life easier, a Inspection of established crop, could not glimpse of a different industry and a be improved simple dryer

Thyme Farm Participants Report 1 - by Pauline Pettitt, Pettitt Botanicals Visiting the thyme farm I was interested to find that his crop rotation was every three (3) years with no fertilization between crops, also of great interest was the fact that the crop was continually harvested all year round. The general layout of the growing area was very efficient and could be harvested and new plants planted with minimum effort.

The machinery that had been developed for the planting and harvesting was also most ingenious and it was very interesting to note that the owner and friends had conceived the idea and had made these machines so adaptable for their needs. There was not much mention of irrigation at the time but the site was in a low-lying area and one presumes that irrigation is necessary at times.

Drying the herbs in the container was also very efficient and seemed to be low cost, which in a small operation was rather impressive. Overall, it was an educational and informative visit.

Thyme Farm Participants Report 2- by Douglas & Christine Kesteven, Whian Whian Although not a large farm, Powers’ thyme farm impressed because of their ingenuity and attention to detail. Located on the Alstonville plateau with predominately red basaltic soils, the farm has a stream through it that is used for irrigation. This stream is needed for irrigation and gives a natural beauty to the farm. Plots of approximately 30 by 80 metres are planted with seedlings that have longevity up to 4 years. The crop is harvested two or three times a year.

The attention to detail for quality assurance was exhibited by water usage. Overhead irrigation is used only for crop establishment otherwise drip irrigation is used. Apparently thyme is a great crop not requiring any soil improvement or having major pests. Weeding is manual within the crop.

Harvesting is done with a modified brush cutter feeding the cuttings onto a special trailer towed by a tractor. The cuttings are then dried in the drying shed. Both the harvester and the dryer are testimony to their own and their neighbor’s ingenuity.

The Powers could not over emphasize the importance of good relations with their buyers.

66 Farm Visit, Site 3, Lemon Myrtle Farm – by Merideth Freeman, Tarnuk Bush Food and Flowers

Evaluation Summary

Involvement Relevance Presentation 8.7 8.3 8.0

Best Feature of Workshop Workshop could be improved by Seeing a different industry & Harvesting demonstration, showing mechanization, the planting of harvesting Davidson plum in the understorey as an experiment

The lemon myrtle plantation visited was involved in the production of lemon myrtle for essential oil, and the owner's presentation focused on crop management and harvesting. Discussion covered the growth rates of the plants, the number of cuts possible each year, grass and weed management, water requirements and methods of replenishing the soil, as well as various markets for lemon myrtle, costs (set-up and recurrent) and rates of return. Year-round growth in this locality meant that plants were at different stages of post-harvest regrowth; some having been cut very recently and there was evidence of many of these strategies in practice.

The owner has progressed through a number of different harvesting methods and now has a custom-built harvester the processes large volumes simply and efficiently. The angle and height of the cut can be adjusted according to the height and width of the rows. Lemon myrtle responds well to cutting provided the growing conditions are satisfactory, and the aim is to keep the plants at a height which maximizes green material at harvest and minimizes stem/woody material.

Farm Visit, Site 4, Main Camp – by Beth Cooling, Beth Cooling Horticultural Services, Gilston Qld.

Evaluation Summary

Involvement Relevance Presentation 9.2 8.8 7.6

Best Feature of Workshop Workshop could be improved by Awareness of needs of a large- scale Microphone on bus, time viewing the operation, distillation information trees

The field trip to Main Camp proved both interesting and rewarding for me. As a concerned environmentalist, it was pleasing to see the effort to which they have gone to in which to operate a company and not further degrading the environment. Their adherence to quality control was both impressive and left me feeling confident of the quality of their product.

67 Whilst I could not hear all the discussion on the extraction program, I left Main Camp richer for the experience. Most people I spoke with had enjoyed the experience. It is companies like Main Camp that I feel are making the horticultural industries in Australia, leaders in their chosen fields. Whilst some of the field visits may have looked at ''cottage style'' industries, this visit was from the other end of the spectrum.

68 Industry development session:

“What should the industry look like?”

Facilitator: Ken McLeod Presenter: Andrew Heap Chief executive Officer Australian Macadamia Society

Functioning of the Macadamia Industry Organisation

This session was taped and then transcribed. Andrew Heap presented a paper to the conference attendees outlining how the Australian Macadamia Industry formed and maintains an industry organisation, what they learnt from the process and some of the pitfalls to be avoided. Andrew’s presentation was accompanied by a visual Power Point display.

“I appreciate the opportunity to come and talk to this group. I know very little about the herb industry but hopefully, the warm up is not a cool down. Someone said before that the macadamias are the mother of all bush foods and then they suggested why not just join the Macadamia Society and the problem would all go away. In fact, it won’t go away. I think I know enough about our industry to say that as an outset, getting agreement between people, even though they have a common purpose is a very difficult thing to do. And it changes through time. It’s an evolving thing and I started to in preparing this in pointing out that the macadamia industry or the AMS is now 29 years young. The Society has been around for that long. It started from extremely humble beginnings and they were enthusiastic. They were people that wanted to do something to advance the industry in a more organised way. I spoke to Ian McConachie who was at one of those early meeting. There was another guy called Ted Davenport who is still about but no longer a director of the society. Ian McConachie is, so he’s stood all that test of time and a guy called Jack Gowan who came from Glasshouse, he actually passed away last Saturday. He was a major stalwart behind the industry and had resources, but we’re talking about still a young industry and the figureheads at the time are still out there and are still enthusiastic about the industry.

• Why was the AMS formed? It’s worth dwelling on just for a minute. The AMS was formed in 1974 to present, and guide and address the many issues in the new small rapidly growing industry where cultural knowledge was limited. Also to achieve unit and scale for smaller growers who were concerned that CSR would dominate the industry.

I’ve given you a little bit of background. I don’t want to say too much that doesn’t add to this morning’s discussion but the macadamia industry was essentially started through efforts of researchers and development of technology in the US. It really came about because the Hawaiian’s saw an opportunity to develop the industry over there and the initial work, 20-25 years ago was done in Hawaii. They took Australian

69 cultivars, Australian varietal, plant material and worked with it and developed some of the earlier varieties and so the varieties which are still very common in the Australian industry today were developed by the Americans essentially and it came to the point where they fell in love with the Macadamia and said, in the early to mid 60’s, look you guys better start producing. It’s about time we returned your industry to you. It’s about time you started developing your own industry. We’ve developed it enough for you. It sounds like a terribly poor slant on it but that’s in fact, pretty much how it happened and the Australian Industry’s gone on from strength to strength. Some people will know, we are now the largest producers and exporters by quite some way and dominate the industry as we produce about 45% of world production. That’s the background.

The thread that I would take out of the starting point was that you can see there that grower unity and market power are always issues. CSR saw the opportunity to diversify away from sugar and growers who were enthusiastic wanted to be confident that they could go ahead and develop an industry and probably get reasonable returns and prices and of course ensure the R & D process happened in an orderly way. They were concerned that CSR might dominate that process. The same issues arise in every industry and I don’t know much about a lot of things but I do know enough to say that it has been a concern in the tea tree industry and there are a couple of large players who have dominated the game and there has been concern in that area and the industry has a few problems at this time.

Apart from grower unity and balancing off market power, R & D was always so very important in the overall scheme of things and some sort of coordination. The desire to coordinate the growth of the industry which are very noble objectives.

So what’s changed in the last 29 years? Well, I don’t think a lot has changed. What has changed has been the refinement of that process. I’ve added a few more components and I really need to try and go through them fairly quickly. • The coordinated industry development is still the major priority. • Defined R & D program • Defined promotions program • View that the industry Farmgate issues are important but market development and product development is just as important. • The advocacy issues which are more semi-political issues and the bit that I focus on within the society. I’ll cover that a bit more later. • Balanced representation – you could form a growers organisation but in the long run – you actually want a whole-of-supply-chain organisation. You want an organisation that is looking at all steps in the chain, because the focus on the farm is just not enough. The old saying, ‘getting the product out the farmgate and it’ll look after itself’, is just not adequate. • An effective consultative mechanism with membership is really important and it needs to be timely and you can’t do enough on that subject.

70 • Maintain the focus on industry priorities. The point that I would make on that, is growers and generally, people in industries are very aware of empire building. It’s not on!

• A vision for a better industry and a willingness to serve – if you haven’t got people who want to take on a bit of leadership and want to serve and in many respects do it at their own expense, that is a major missing element. Nothing can happen without that.

• Representation of all industry stakeholders - really important, so it requires a mix of leadership where you’ve got growers, perhaps people who are starting to process the product. People who know where it’s going to go. People who have some thought about product development. That helps to keep things in balance.

• One peak body – this has been the single most important thing for the macadamia industry. Not little splinter groups that jump up and make life difficult and try and do it their own way all the time. One group that speaks for everybody. Policies are openly discussed and debated and the decision is made and ensuring that that is done in an orderly and sound way is really very important. And when the decisions are taken, people live with them.

• Politically representative and skills based – if you can achieve it. In other words, our industry is predominantly Queensland and NSW. Between Coffs Harbour and Bundaberg. Increasingly Bundaberg, but more the Glasshouse area. So we are a fairly tight industry and many industries aren’t. We make sure that the Board is made up of people who are coming out of Queensland as much and we try and have a balance between processors and growers on our Board.

• Clear separation of Board from management. We don’t want the politics getting in the way of implementation of policy. Growers get extremely upset when they observe it and there are a few other government issues. Good reasons why you don’t do it as well, which I’ll try and cover.

• Clearly defined constitution objects. We’ve got our constitution. We don’t leave it on the shelf, believe it or not. We review it regularly, we update it, change it, think about whether the AMS should become commercial, as opposed to just guiding policy. You can see that we have a conflict of interest ourselves as soon as we set ourselves up against the key players in the industry. And we think we’re good enough to do that, but we stay away from it because that’s not the way the industry wants to function, ie. in our all inclusive, all stakeholder based industry. Growers would say it would be a great idea.

• Well orchestrated strategic plan. We work on a 5 year strategic plan process. We’ve got a very open and transparent strategic plan and we try and put it out ahead of us. Achieving the desired outcomes from that plan is not easy. In fact, you’ve got these competing ends, its very very difficult and you have to have a lot of patience, a lot of discussion and only then do you get the desired outcomes, and not all of them all the time.

• One man one vote, in decision making, irrespective of who’s playing out there. Some will know in the Macadamia industry we have commercial growers with 12 to 1500 trees doing it in a retirement mode versus people who have 250,000 trees and still increasing and they don’t carry any more weight than the individual with 1500 trees in the decision making process.

• We separate our membership fee and the administration of the society from what levy raising is all about. More detail later on. It’s very important that the levy mechanism is not used to feather-bed the industry organisation. So we independently try and raise our own funds and the focus of use of levies which are primarily targeted R & D and promotion are used for that purpose. Not to feather-bed the AMS.

• Clearly identify priorities – linked back to the strategic plan, we review them; we have committee meetings on a regular basis, 4 or 5 a year. Grass roots based input but at the same time we try and concentrate on those who have the skills. We appoint project champions for research projects ie. people within the industry who will take on leadership and observe and watch milestones and make sure that research stays on track. What we are actually trying to do is ensure that when we bring in an outside researcher that they actually do what they said they were going to do. Our own people, within the industry, we appoint them as part of the R & D committee, it they’ve got their certain level of expertise. One of the great advantages, is that grower’s don’t have some of the supply chain skills further up and that’s why it’s really handy to have the likes of say Darren Burton, (the marketing manager of Agrimac, one of our processors), who would run a projection, eg. consumer preference, or looking at getting research out there from the consuming end of the market.

• Effective research discussion forums. Really important. I made the point before. It’s very important. We do it in a number of ways. Forum for researcher discussion with industry. We have an annual conference where all researchers are essentially required to present their papers in front of the industry, who want to go and listen to them.

• Marketing R & D is one thing. Farmgate based research is one thing, but (I’m biased coming from the marketing end) producing something is one thing, but getting it out and getting a reasonable prices for it in a balanced way and ensuring you have your handle on what consumers and what research is telling you is just as important. It is the area which is funded fully by growers themselves. There’s no kick back from government (levies later on). Some people see it suspiciously. I differentiate between marketing and sales and it’s a debate that continues to go on. Some people say generic marketing is a waste of time. That all the companies should do it themselves. I don’t agree. Generally you find they haven’t got any money to do it in an orderly fashion. So we see it as an important responsibility for ourselves.

• Clearly identified priorities – Bottom up committee and in the marketing end, you want people that are actually out there in the market place and hence the advantage of an organisation which is involving other people along the supply chain.

• Industry commitment to funding priorities – either by way of voluntary contribution or compulsory levy. This is unmatched as far as promotion is concerned but of course in the R & D area is normally matched 50-50.

• Annual promotion committee reporting – at annual conferences you’ve got to “sing for your supper”. Open ourselves up to criticism and provide a form for comment from growers to have a lash at us if they don’t like what we’re doing.

• Periodic review of commercial relevance – all expenditure should have budgets and variances should be reported on.

On to the area of advocacy, it’s important that the industry is presented in its best light and there are constraints and issues that have to be addressed from time to time. • In our industry, taxation was a major issue. We managed to avoid the goods and services tax being applied to macadamias. We worked hard for it, once the democrats had opened the door.

• Environmental management issues - Ken knows some of the things that I’m concerned about on that. Noise constraints and a few other issues that are bearing down on the industry and adding costs to growers are issues which I have quite a bit to say about and which we’ve done quite a bit of research to get some clear thinking on. Brought in the guys, acoustic engineers to look at it and really lay down good data so that we can have a platform to work on. We are thinking 3 to 5 years out. It should be funded separately from levy. If you’re going to be a politician, governments don’t like that sort of thing. They don’t like levy monies which they argue are actually taxes, not hard fought, hard earned grower income. They say that levies are taxes and they don’t want to have taxes being used to politically upstage them. So one of the advantages of having a separate membership fee with a society (and it’s essentially the thing that pays my wages) is that the politics of the industry can be looked at separate from levy raising or using levy monies for that purpose.

• Media Support. You’re no good without the media and I suppose one of the lessons I have learnt, and fortunately I don’t think I’ve made the mistake is that you don’t tell the media fibs. They are the most important ally that you’ve got and you be straight up with them. Because if you’re not, and I’ve seen industries which haven’t been, the media can be merciless if you tell them fibs. Don’t abuse the privilege and on the other side of it; it’s the cheapest advertising you can get.

• Take responsibility. Someone take responsibility for that job. For the industry, its generally my job to talk about industry issues and right from the Board down and even the processors, I’ll stay off their patch to some extent and just focus on the generic issues that are important to the industry. One person does it.

• Balanced representation of stakeholder issues. This is really hard. I come from the growing end although I’ve done a lot of marketing and you

73 have to continually remind yourself that grower interests, processing interests, and all steps of the chain, have to make a dollar out of the industry that they are part of. When you come down to discussing issues, you’ve got to present them in the fairest possible light. There’s always this gnashing of teeth between growers and processors. Has been since time immemorial. The reason is one is suspicious of the other. Always concerned that they are getting a reasonable dollar for what each one is doing and growers, normally are the first to start throwing stones when things don’t go well. Of course, supply and demand confuses the issue and price movements don’t take place when they should. All these sorts of issues create friction. It’s very important that if you’re going to have an organisation which has a common purpose, that the issues are presented in a balanced way. That is a very difficult thing to do, because we’re all coloured by our backgrounds. I come from a “growing” background but I do understand marketer’s problems.

• Industry decision maker. Requires that conflicts of interests are declared at the start of the board meetings. We do that as a matter of course. If there are issues on the agenda which are sensitive, you either walk out of the room or you declare your interest and the chairman of the meeting will say at the beginning of the meeting “have you got something to declare?” “Are there issues here on the agenda that are/or should be a concern?” If so, raise them now! You don’t get people jumping out of their skins to tell you the issues where they’ve got a conflict. That actually raised another issue, that most boards only get a few sitting fees. Everything else is voluntary and done in their own time. If you think about it, the only reasons they’ve got to be there at that meeting is to protect the interest of that part of the industry that they are representing. They don’t get paid. It raises quite an important issue, that in today’s corporate governments and additional director responsibilities, the time is rapidly coming that if you expect your directors to lead your industry well, then you actually have to start paying them in addition to giving them their free time and so forth. It can be modestly or in a big way but some sort of modest payment to ensure they keep their views contained and properly represent industry interests. I’m not saying that our board doesn’t do that, but you do see from time to time where individual interests can come to the fore. It’s half my job to try and keep them from coming to the fore.

• Directors must be accessible. They must understand what’s going on and their members need to be confident that they know and that they are showing leadership and that they can talk about the issues that are important to them. For whatever is said at a meeting, you can bet that 10 times more, or a factor of 10 times is said behind the scenes on various issues and directors need to assist in that. Where decision making involves grower money you’ve got to have the whole process being transparent and directors need to be fully aware of that and it needs to be presented openly. Anything to do with levy raising and consideration of levies, very, very important that it is a transparent process. At these meetings, although we have members who are contributing to the AMS coffers to do my job and things like that, independent of levies, for meetings that are about levies (this is more a government requirement than anything else) we encourage non-members to come along and be part of the process. At our Annual General Meeting we will encourage non members of the society to come along and listen to the debate and contribute to the debate. We also say

74 to them, “If you want to be part of the process, come into the tent and get involved. If you don’t want to, expect the outcomes that you get by not doing so.”

• Effective consultation with membership – already covered – can’t over emphasise it. We’re doing it at a number of different levels. We have gazetted Annual General Meeting, where we speak up and have to sell what we’ve been up to for the last year or so. The whole Annual Conference process is designed to put research in front of our members. We have things called Mac groups, which run twice a year, right throughout the producing area. Basically shed meetings, where we go to somebody’s place and growers in that particular area sit down and talk about, or raise, things that are important to them. It is a very important, but informal part of the process, and of course our journal, which is really our bible. We produce out of our office six times a year and anything at all that’s happening in the industry is discussed and a bit more as well. So high level of consultation with members right through the year.

• Maintain focus on key industry priorities. The last thing that growers want to see happening with their money is empire building. Generally, peak bodies are not established to introduce a whole range of commercial activities. We don’t however, mind donations and sponsorship is always accepted, but we are not there for that purpose. We are there to maintain the focus on what the industry is looking for and you do see in some organisations that they are so busy trying to raise money that they forget why they are there. We have a relationship with Wesfarmers Insurance for example which brings us in some funds. Annual Conference trade activities. A bit of sponsorship money is part of that process. Keeping the focus on “improvement” is a constant priority and whether its on farm along the supply chain or in information transfer, never lose sight of those three key areas.

A quick AMS snapshot: It is a company limited by guarantee and is guided by the objects of the constitution which are reviewed on a fairly regular basis. It’s got a ten man board. Directors are elected for 3 years on rotation when they must retire but they may renominate and stand. A couple have been there for 20 years. Right from the start. They have been required to retire, put themselves up for re-election and away they go.

We have a President who is elected annually and has a maximum term of 4 years. Essentially it is made up of 9 directors and a President; so we have a 10 man Board. It is split about half and half between growers and processors and Qld and NSW.

It is often difficult to get people to stand. We have recently had two vacancies on the board, ie. two retirements, and we were trying to canvass the right kind of person that would made a contribution to the continued stable running of the organisation, to get that balance. It’s not an easy process. We meet 7 times a year.

We have independent R & D promotion committees which feed into the Board. We seek nominations each year for membership of committees. We again try and make them skills based. People that have an understanding of cultural practices as

75 opposed to post-harvest handling, as opposed to management of chemicals, fertilisers and nutrition. We are looking for skills in each of those areas all the time, to try and make our thinking process and the decisions about our priorities relevant.

We also open ourselves up, ie. occasionally run the ruler over our R & D program. We open it up to independent scientific input to see if we are still focussed, if the process is still working properly. We get some eminent person in that particular field or skill to come in and have a look at it. That’s funded out of levy money.

We are a shareholder of Horticulture Australia Ltd., which is also a company limited by guarantee. A bigger one operating under a Deed of Agreement with the Federal government and essentially that gives us the right to raise levies. It’s that Deed of Agreement between the federal government and Horticulture Australia which authorises our levy raising process. It doesn’t say how that should be spent. We determine how it should be spent and that’s referenced back to the strategic plan.

We have a compulsory levy. The focus was originally a voluntary levy based on number of trees in the ground. People used to contribute. They agreed that they would contribute on that basis, in those early years although there was no production at all. It takes 5-7 years before a macadamia trees starts producing. But in order to get even part of the process, we just had a straight levy of trees. Irrespective of whether they were producing. It is a tax, a cost and it is certainly an imposition on growers but one of the prices you pay for being able to do some of the things that you think are important for the industry.

Mentioned before about our $170 is our annual membership fee and that essentially enables the publication of these publications and the inputs and my input to them and other peoples input to them. It wouldn’t happen just straight through the levy raising process, because you need a structure in order to manage information. That’s what the AMS does.

We’ve got 760 members, which accounts for 80% of growers and more than 90% of macadamia production. What it doesn’t include are the “life-stylers” who are there and just happen to have a few trees and probably trying to dodge a bit of tax. They don’t join, but we have a very good coverage, and we open ourselves up. We put our questionnaires out there periodically saying, “What do you think?” “Are we doing our job properly?” If not, tell us. Touch wood it’s going alright at the moment.

The Mac groups and the regional meetings, are really, really important as part of the information transfer. People who wouldn’t be prepared to say something at an annual conference under the full gaze of their fellow members, will say things in Mac groups, quietly and will also ask questions about things they don’t understand. So you don’t have people jumping up at meetings, making life difficult for you, which you don’t really need when you’re trying to get a resolution through.

We put The Bulletin out six times a year.

76 Questions from the floor

Question:1 On your questionnaire, what would be the percentage of responses?

Probably not a lot better than any questionnaire – probably around 20-25% - which is pretty good by average standards. The twist I would put on it is that there are people who watch from the outside and there are people who want to become involved. The people who want to become involved and contribute to the process are involved in everything and so at annual conferences and as far as the Bulletin in concerned, those committed people in the industry will always contribute when they are asked to do so and give you their candid comments.

Question:2 That’s a fantastic model. 1. What issues could you see coming to the fore if Macadamias were produced all around Australia

The tyranny of distance and the cost involved in meetings is a major issue. One of the things that other organisations have done, eg. stonefruits and some of the others have done is they’ve established state based delegates and they carry the power of the growers in decision making. What happens is that they come together, 7 states (or whatever it is) and they make the decisions. That is not a good formula to have, because its not grass roots focussed enough. It doesn’t get back there and although there is a larger cost involved and a larger proportion of levies that would be chewed up in facilitating the communication with growers its probably a better way than giving some delegate who 50% of the guys in that state like and 50% don’t like. It’s always going to create friction. So what the executive of the organisation needs to be able to do is get back to growers. Maintain a good file. That’s hard. Get grower’s to actually put their names down and say they are part of your industry, even though they may not be members. We collect statistics on our industry as an administrative function of the AMS. We know how many trees are out there and so we can see forward into the future about what sort of marketing planning we need to have. We get some of our biggest growers (a few of them) that wont contribute to the process, because they think we might use the information for tax purposes or it won’t remain confidential. Any excuse will do, but they are the things that needle you, but my point is if they’re not members of the society, statistics raising / data gathering is a useful way to get a feel for numbers. Those who choose not to be members if they’re out there, may contribute to that process because it’s a worthwhile process for their industry.

Question3: What if it was almonds, pistachios walnuts and pecans? What we’ve done is, each of those industries do have a small committee. Almonds being the largest and more forthright. They’re the only ones apart from macadamias which are exporting in any significant way. Hazels, pistachios, walnuts are primarily domestically focussed industry. Most of the stuff is imported.

77 They do have their own little organisations. There is a thing called the Nut Industry Council. We meet twice a year and we talk about things like health benefits, important generic issue. We have a website called Australian Nut Industry Council (ANIC).

As a service to the industry, macadamias last year held a combine ANIC Nut Industry Council and Macadamia Annual conference whereby we brought the ‘nutties’ from all around Australia to the meeting. We got 50 or 70 of them. We had it down at Coffs Harbour and we did that as a service to the industry because we’ve got the structure, we’ve got the executive to organise the buses and we all do most of it from inside.

I emphasise that we do it from the inside. We try not to get people from outside because of the size of our organisation. We’re having an international symposium this year and it’ll be quite a bit larger than last year and we’ve got 50 or so South Africans coming across already. Mainly coming across for the World Cup I suspect, but nevertheless we’ll have a conference.

Question:4 Are your levy fees compulsory in NSW? I’m involved in the industry in Qld where compulsory levies are just not on. So how are you going to get over that one? Is the secret to have one national peak body?

QFVG has just lost its compulsory levy raising status because there are industries within their own right which have a national organisation, Avocadoes have their own peak body. Stonefruits have their own national peak body.

Where there’s been a problem, and QFVG, code of direction as it was 20 years ago, they’ve actually lost a state based organisation, actually lost the relationship with the federal government to raise compulsory levies. It’s one of the advantages of having one organisation.

Forget the state stuff. Not a problem at all. There are a number of tests. Once growers, or their stakeholders, have decided that they want to have a levy, they are determined to use it for these purposes, done a strategic plan to work out how it will be spent, how it will be allocated, done all of that and then got approval from the members, you’d think that would be enough. It’s not. You’ve then got to go and sell it to the government and say we’ve got membership approval to do this. Then they’ll run the economic ruler over you. They’ll ask you to demonstrate why the industry can’t do it on an individual basis. Why is it that there are individual growers. Are there imperfections in the supply chain which prevent the R & D taking without any assistance. Anybody who wants to know anything about that process. I’ve been doing that .

But to answer your question, not a problem if you have one national body.

Thank you for that very full description of a mature industry association

78 Developing an industry organisation model for herb growers

• Meeting the Market Players Jane Parker - Gourmet Garden Ian Hemphill - Herbies Spices Chris Oliver - Blackmores Nick Rojo - T.P. Health Peter Purbrick - Mediherb John Bax - Main Camp Tea Tree Robert Hayes - Freshzest David McKinna - McKinna and Associates

This session was an open forum/workshop where participants were split up into several groups of 5-9 people.

The facilitator, Ken McLeod began by asking participants to come up with a suitable model for an industry organisation for the Essential oils, Herbs and Bush foods Industries. The information was transcribed from the taped recording.

Group1 The structure of such an industry grouping should be built on the existing structures or emerging structures within the industry? The existing peak bodies and perhaps cooperatives.

Facilitator So can I ask if any other group came up with a distinctly different view of what the membership would look like?

Is there any group that has quite a different model?

Group 2 It just shows how difficult it is to get consensus. We came up with a completely opposite view and we felt that it should be an association comprised of individual members because we felt that the issue of identifying commonality of interest between a number of disparate groups formed very different agendas. That could very easily become a political dog’s breakfast whereas, if everybody who joins as an individual member has some input and some ownership within that overall organisation, the organisation itself is forced to focus more coherently on the needs of all those individual members and not be dragged around and pushed and pulled by some probably reasonably effective groups that have already formed in their own right, but is that the best thing for the industry?

Facilitator Is there another view? 79 Group 3 We started a proposition that really s a little bit technical here – you’re doing things backwards. Really putting together looking at an organisation that starts with a strategy, process and structure. Structure is an outcome, it’s not an input. So our group suggest that perhaps you’ve really got to start putting in supply chains, you’ve also got to look at the strategy of why you’re putting something together rather than heading into this structural thing and funding thing with missionary zeal. It’s the wrong way to go.

Facilitator So this is a view which is saying focus on the supply chain, look at the needs that emerge from the supply chain and build the structure around that and it will be addressed by some sort of overall strategic direction. The structure will fall out of an understanding of the supply chain and its needs.

Okay any other views?

Facilitator I’m interested in the combination of the crops that we have been talking about at this convention and how they were put together when the first convention was set up some years ago because they are all small developing industries with some linkages but some of those linkages aren’t all that strong. But I’m just interested in anyone that has some background on how this grouping was put together initially.

Tony Byrne (RIRDC) I don’t know the genesis of these conventions or when they started but the point is a good one and if you look at the way RIRDC deals with them, we have them in different programs. We have a separate program for tea tree oil because the industry actually raises a levy and there are industry people on the R & D committee for that product. We’ve got a separate program for essential oils and plant extracts (which is really medical extracts) and then our new plants program covers herbs and native foods, so we don’t really lump them together.

Group 4 It’s not on the promotional brochure that was put out but I think trying to embrace all those industries is too long. I think that essential oils already have a strong industry within the tea tree industry and I think that native foods have already got a good native food industry in the macadamia industry.

That’s why I think the herb industry probably doesn’t have a national peak body and if you’re looking to create a peak body within the herb industry then maybe Herbs is a good name. And if its divided into culinary and medicinal, I think it would be a disaster - but that’s the name, the strategy in the ongoing development. “Herb Growers”

Facilitator

80 This is an issue that is quite an important issue requiring thought and eventually and outcome and that is what should be the scope or footprint of this industry grouping? Do we have any views from anyone in the essential oils area of whether they feel their industry belongs in this bigger coalition or alliance? Any views on that?

Group 5 All I can do there is stress differences and illustrate the problems we have within the essential oil industry itself. We do have the Essential Oil Producers Association, where we are trying to attract membership from anyone who grows essential oil but underneath that you have a separate association for the tea tree oil industry, a separate association (actually two assns) for the lavender oil industry – and they tend to not get on too well together. The chart that we drew here at this table shows how you go from the three herbs oils and essential oils at the top and then you get the specific industry organisations that you can have below them. Even amongst the lavender industry there are two lavender oil associations.

Facilitator Okay, so I assume that means that your group feels that there is value in an umbrella group across the three sectors.

Group 5 In answering the first question. We thought the membership would probably have to be made up from the association at the lower level. And so the smaller organisations would feed into the associations at the higher level, then feed into the top. But of what value is that to the producer who is right down the bottom of the supply chain?

Facilitator Alright, does anyone have other views?

Group 4 Our group as part of membership actually questioned whether it was appropriate to have herbs and essential oils and native foods altogether in the one group and we tended to feel that there was basis for a herbs group and its members would be growers, processors, distributors and ideally even retailers. So the whole supply chain would have an interest so everybody knew what was going on in that industry and we really put a big question mark on it and felt that perhaps they(Herbs, Essential Oils, Native Foods) should be separate.

Facilitator What about from the perspective of native food producers? Are there any views here that would like to be expressed about whether people in the native foods area feel like they belong in this sort of umbrella group – or not?

I can’t speak on behalf of anyone else but I’ve been on a fairly steep learning curve at this conference. I’ve never thought about these three groups all together ever before and I just thought back to what Andrew Fielke said in his session about food ingredients and that’s something that was brought up in our discussion. It seems to me that what’s known as the native food industry at present is actually more about food flavourings that it is about foods in general into which the macadamias would fit. Most of the native foods that we’ve talked about at this conference are culinary herbs,

81 processed in the same way. And a lot of things like quandong , bush tomato and lemon myrtle and some of those other things have such intense flavours that they are treated as flavour ingredients, not as fruits. So it seems to me that Australian native foods do have a fair bit in common with herb growers but I can’t see the connection with essential oils quite so clearly. Even though some of the essential oils are made from Australian natives. I feel it may be better for the native food label to have a limited life. The things that we grow under that label which have very little in common in a lot of cases should be included in some of these other categories, particularly the category of herb growing.

Facilitator So is there an emerging picture that herbs and native foods might have an alliance of convenience but that essential oils may not be part of that scope?

When you look at essential oils, they all come out of a plant. Someone grows them. I grow lemon myrtle. So there are commonalities there in that side of the industry as a grower. There are obviously then divergent upstream uses of that product so in the same way as we’ve just heard that the native food crops are actually ingredients. I’d agree. I’d put it fairly and squarely in the same category as the culinary herbs as flavouring ingredients. That’s what I grow, its flavouring ingredients – I don’t grow food as such.

Facilitator So this was the David McKinna perspective.

This is not necessarily a question that needs to be settled right here and now. But its certainly one that needs to exercise the collective thinking of the producers and others in the industry who are represented here and what I suggest we might do is go onto another question in your group about What is the next Step? Because it may be in taking the next step it will start to become clear where, over the next year or two, where are the commonalities where there is a basis for cooperation and where are the differences that may make it not worthwhile persisting in being involved in a discussion about an industry organisation. So can I suggest we move to that next question?

Facilitator What is the next step to move towards a more effective, united industry? One of the things that seemed to emerge from this gathering is that sharing knowledge and information resources is something that people are hungry for, (or have a great pressing and practical need for) and could be something that could be addressed across even the three sectors, quite effectively as a first step. • Developing standards and product specifications – quality specifications

• Market development, interface with government and industry. (It’s what Andrew called the ‘Advocacy’ role).

82 • Product R & D and Human resources development – particularly learning along the supply chain

What’s the next step in moving towards a more united and effective industry organisation? Any other groups want to say what they thought the next step was?

Group 6 There is certainly no need to make a body just for the sake of having an extra body. You certainly need points of common interest and there were some of those that could perhaps be beneficial as far as having the broader group. If for example you’ve got a regulatory problem and one of those which I recalled to mind was if you’re exporting a native species, it does have to be on a certain government list. So there are some cases like that where the whole three groups may need to get together, but we felt that mainly concentrating on the associations that were already there, whether they be herbs or essential oils or native foods. Just one benefit of the combined group would be to organise a conference, with perhaps a bit more diversification in it. Having three separate strands where you can choose whether you go to sessions on essentials oil or native foods or herbs.

Facilitator Any other groups? Our group agreed that we needed a central point whether it was an industry development officer for each group or whether it was a website – so that people could contact one another or maybe project officers who could pass the information around that was regarded as very important.

Facilitator So your suggestion is some kind of communication infrastructure is necessary. The suggestion was made from this group that if there is going to be a next step, there needs to be some sort of group that comes together and starts to progress it, even if its role initially is simply to clarify these options and feed back some thinking and maybe analysis to you on the kinds of options that have been suggested here.

Is there an interest in forming such and investigations group? A small group that might take this away and look at it and feed back some options that could be considered? Survey the Needs of people in these industries. Is the step to see whether there is a little group of people who want to get together and prepare an options paper on the future structure of the industry and then circulated to the existing industry groups and see whether they want to enrol in progressing any of the options that might be identified?

83 Any suggestions on how such an options paper may be put together? It may be that one of the existing bodies or some of the agencies that are represented here like RIRDC or DESARD might be prepared to support the development of an options paper on the future structures of the industry. That the organising committee be asked to extend its life long enough to put together an options paper and circulate it to everyone here and to the various associations that already exist within the industry. The point is clear enough that there are networks that can be reached through the mailing list and that might be considered. It seem to me that the idea is that when the conference organising group gets together to wind up the organisation for the conference it considers whether its possible to included some kind of options paper and suggestions about how a survey might be done. Something like that, in the proceedings from this gathering. An offer was made and accepted from RIRDC to publish the proceedings and put them out through their website.

84 Appendix 1

Report on Options for Industry Development

Section 1: An Overview

During the Convention interviews were conducted with numerous participants, a focus group of grower representatives was convened and a debriefing session was held with workshop presenters. In addition, discussion in all Convention sessions and workshops and some farm visits was monitored. The purpose of this information gathering was to discern participant views on the need for better organisation across the three industries represented in the Convention – herbs, native foods and essential oils; to identify possible impediments to a more unified industry; and to elicit options for industry development.

While there was wide acceptance of the desirability of a more united industry, there was also considerable doubt and even scepticism expressed about the likelihood of achieving such an outcome across three quite disparate and unevenly developed industries.

Perceptions of the Benefits of a United Industry

In summary, Convention participants saw the potential benefits of a more united and better organised industry as falling into six areas:

1. More market requirements; •Supply chain development; •Implementing credible QA practices. 2. Better effective advocacy on behalf of the industries with government and other major industry players. Examples: •Legislation to bring these industries into alignment with international standards; •Mediating relations between growers, regulatory authorities and manufacturers; •Cultivating industry awareness in the media; •Managing chemical use permits. 3. A strategic approach to market development and the projection of a higher industry profile. Examples: •Setting standards for product specification; •Understanding coordination and collaboration within the industries between growers and with other supply chain participants. Examples: •Putting in place cooperative arrangements to improve reliability of supply; •Establishing agreed industry development priorities; •Supporting a united industries secretariat. 4. A more strategic and better resourced approach to research and development. Examples: •Improvement of cultivation techniques to achieve consistent active ingredient content; •Developing new market-oriented products; •Dissemination of R&D findings within the industries. 5. Improved information support for industry participants. Examples: •Access to information on regulations and markets; •Building cross industries communication infrastructure; •Database of good practice case studies; •Industry newsletters and/or website.

85 6. Enhanced grower education and development opportunities and resources. Examples: •Understanding of market structure and dynamics; •Natural resources management strategies; •Implementing QA strategies; •Developing a shared vision for the future of the industries; •Understanding the regulatory environment; •Information on training programs.

Impediments to Industry Unity Convention participants identified a range of obstacles to achieving greater unity across the industries. They included: • The disparate nature of the three industries and their diverse production methods • Multiple products and markets • The industries are at different stages of development • The industries are geographically dispersed • Low level of grower participation in industry structures • High level of movement in and out of the industry • Many Convention participants found it difficult to identify significant areas of commonality between the three industries. For example: • The three industries were thought by many to face different issues and requirements in areas such as standards, international benchmarking, R&D priorities, etc. • The different goals and interests of lifestyle farmers and those with a strong commercial focus was repeatedly referred to. • Concern was also expressed about differing philosophical approaches to farming, e.g. organic vs non-organic, monoculture vs permaculture.

It was generally thought that the lack of a professional profile for some areas of the industries means that they fail to achieve recognition by big players in the markets and are of low priority to government.

Another obstacle that was frequently referred to was the perception that many industry participants lack an adequate understanding of the whole supply chain and of market requirements.

Both the benefits and obstacles perceived by Convention Participants were reflected in the range of “next step” options which emerged in the United Industries Forum on the last day of the Convention. In the end, no participants were prepared to serve on a working group to draft proposals for industry development. Instead, the Convention Organising Committee was requested to circulate the options that were identified for a possible next step and invite responses from across the industries.

Section 2: Some Themes Emerging from the Convention The fact that different sessions of the Convention were addressed to particular target groups amongst participants highlights the disparate nature of the three industries.

86 Nevertheless, there were numerous themes that emerged from the plenary sessions, workshops and field trips that were relevant across all the industries. Here are some of those themes:

The aim of improved industry organisation is to ensure a profitable, ecologically sustainable and market focused industry. From a government point of view collaboration both with and within the industry is essential in selecting R&D projects for funding.

A common feature of growers across these three industries is that they all face problems too big to deal with on their own. In order to address these problems, growers need to be aware of the bigger picture and seek out opportunities for communication and supply chain learning in order to achieve a more professional approach to managing their production. Differences at grower level often seem less significant when viewed from the level of manufacturers. The focus should therefore be on building common ground rather than on differences in order to strengthen collaboration between growers. There is a need for a better understanding of the supply chain and of the importance of strategic alliances. Big market players have a negative view of small, unreliable suppliers and will import in preference to dealing with a disorganised local industry.

A key issue for these three industries is to resolve their current identity crisis – are they primarily food industries or producers of naturally derived ingredients? Some critical factors for the industries are: to strengthen collaboration through clustering in order to achieve critical mass to improve information sharing to forge strategic alliances with major industry players to implement industry branding to develop an industry strategic plan to establish mechanisms for funding industry development

Better industry organisation should assist planned market development, so avoiding the boom and bust cycle that can threaten the viability of many growers. Grower cooperatives serve to strengthen the position of growers in the market.

Acceptance by growers that consistent, credible standards are an essential investment for these industries, rather than an imposition, is fundamental to their future. Standards are necessary to clarify the terms of trade, ensure product consistency and build consumer confidence. Standards are set to meet industry requirements, consumer demand and government regulation. The industries need to aim for a higher level of grower awareness of occupational health and safety requirements, food safety and product integrity, and environmental management standards. High priority for food safety is necessary in order to reduce consumer risk, provide customers with a trace back system, enhance product reputation and provide a marketing edge.

The safe and efficient handling of chemicals is an essential component of production techniques, post harvest product handling and the achievement of quality assurance

87 standards. Better industry organisation would facilitate the management of chemical use permits.

Industry participants need to give greater attention to protecting their intellectual property.

Discussion in workshop sessions revealed a hunger for information amongst growers and underlined the need for ongoing opportunities for grower education.

The “clean image” of Australian agriculture and high levels of consumer demand, particularly in Europe, mean there are significant export opportunities in the international herb market. For Australian producers to realise these opportunities they must first undertake R&D to: validate the therapeutic efficacy of their products match the biological identity of products with their therapeutic profile in order to identify and target discreet markets develop new herbal products.

While there is significant growth potential for the Australian native foods industry, obstacles include the absence of a recognised Australian native cuisine, difficulty in ensuring reliability of supply, lack of awareness of quality assurance systems. This adds up to a lack of investor confidence in the industry. Consistent media support focused around one or more superstar chefs could give the industry the profile and consumer support it needs to grow.

The main benefits that have arisen from the formation of EOPAA have been expanded networking opportunities, enhanced information sharing and more effective representation for the essential oils industry. It has also resulted in much closer liaison with RIRDC to the advantage of producers.

Section 3: Views from the Market – the Open Industry Forum The Open Industry Forum on the final day of the Convention was conceived as an opportunity for growers to hear directly from some of the major market players on their views of the industry. A panel of eight speakers from a range of manufacturing and marketing organisations was assembled for this purpose. Each panel member was invited to make a short opening statement in response to the question: What needs to happen for manufacturers/wholesalers/retailers to source more product from local growers? The forum was then opened up for general discussion and questions.

Some of the key points that arose during the forum were: Buyers would like to see better organisation in the industry either through the formation of an industry association or grower consortiums Several panel members urged growers to focus more attention on market requirements Emphasis was placed on the importance of accurate and consistent product specification and the achievement of consistent quality standards

88 The reliability of supply was a key issue for many buyers who will acquire product from reliable international sources, in preference to uncertain local suppliers Panel members generally would welcome greater collaboration between growers in order to enhance reliability of supply and consistency of product The three industries were urged to introduce continuous improvement systems as a normal part of its operation in all areas The view was expressed that the industries need to achieve a more professional profile Growers were encouraged to focus attention on production costs in order to ensure that the industry remains price competitive It was also suggested that it is in the growers own interest to closely monitor their margins Priority should be given in the industries to providing growers with better market intelligence The importance of developing better two-way communication and trust along the whole supply chain was emphasised by several speakers

Section 4: Outcomes of the United Industries Forum The united industries forum was structured around a series of eight small groups, each of which addressed the same two questions:

1. If an effective united HEONF (Herbs, Essential Oils and Native Foods) industries association were to emerge, what would it look like in five years?

2. What is the next step towards a more united and effective industry?

After time for discussion in the small groups their findings were reported to the whole group for discussion.

In response to the first question; a) many of the groups foresaw an umbrella organisation covering all three industries. A minority of groups however considered such an umbrella organisation either unfeasible or undesirable. b) a federation of existing industry organisations. c) a minority view favoured an individual membership structure.

Some of the principal benefits that participants felt could be delivered by an umbrella organisation were: One voice to represent all three industries A major focus on production and marketing The provision of information services, eg: a newsletter Lobbying on behalf of the industry

89 Setting agreed priorities for R&D The ability to raise funds through industry levies Setting of industry standards Promotion of a trade brand Generating critical mass to achieve cost efficiencies for marketing, promotion and lobbying Development of a common identity for the industry as a producer of food ingredients

In response to the second question the small groups identified a range of next step options for moving towards a more united and effective industry. In broad terms these options can be summarised as follows:

Start with the Needs of Growers This approach suggests that the first step towards more effective industry organisation is to survey growers in the three industries in order to discover their specific needs. This survey could be limited to growers or could also include their supply chain partners. On the basis of the data collected, discussion would then be invited within the industries around the questions: How can an umbrella association meet these needs or are they best addressed by encouraging the formation of commodity groupings or supply chain organisations?

First Implement an Industry Information Management Strategy This option emphasised information resources and knowledge sharing as the critical basis for a stronger industry. Such an approach would focus on implementing industry databases on common issues such as natural resources management, food safety, occupational health and safety, product specification and standards, etc. Newsletters and websites would provide easy access to information resources tailored to the needs of the industries and would encourage knowledge sharing. One group supporting this option advocated the identification of spokespersons for each industry cluster and the establishment of a website as the central contact point for all three industries.

Market Research is the first priority Supporters of this option argued that market research is the best starting point as it has the potential to provide a tangible benefit that would encourage industry participants to associate. It also has the advantage of encouraging growers to give greater attention to market requirements rather than concentrating mainly on production issues, and could also facilitate better communication with supply chain partners. Planning and implementing a co-ordinated market research strategy for three diverse industries would present its own challenges that would in turn have implications for on-going industry organisation.

90 Make the supply chain the starting point Current interest in horticultural industries on the importance of supply chain learning and development suggested another starting point for some Convention participants. This would focus on building a better understanding of the supply chain and strengthening supply chain links and information flows. While mentioned several times this option was not elaborated and would require further work by a representative reference group.

Form a Steering Committee A more ad hoc approach was proposed by one group. Its view was that those in the three industries who desire a more united voice should proceed straight to organising themselves for this purpose. This approach was seen as a way to overcome some of the significant barriers to the formation of an all-inclusive umbrella organisation. If successful the initiative would attract increasing support over time.

Get Professional This view suggests that priority should be given to appointing a paid executive officer to be shared by all three industries. This person would raise the industries’ profile with government, provide a single point of contact and communication, and advocate for improved marketing and R&D.

Build from the Bottom Up One group did not believe there was enough in common between the three industries to form an umbrella group and that there was no point in forming a new body for the sake of having one. Instead this group was in favour of concentrating on strengthening middle level organisation in the three industries, but advocated the continuation of united Conventions organised around the three industry strands.

While each of these options has a distinct focus, they do not necessarily exclude one another.

Discussion of the small group reports culminated in the proposal to form a working group to prepare a draft industry development strategy based on these options. However, while the concept was generally accepted in principle, no one was prepared to volunteer for the working group. Participants finally decided to ask the Convention Organising Committee to prepare and circulate a proposal for a possible next step. It was suggested that this proposal be accompanied by a response form. These documents should be sent to all Convention participants and industry groupings with the request that they be circulated as widely as possible through local and industry networks. This would include a nomination form that would have to be signed by two to three industry representatives.

91 Section 5 : The Next Step – an information and communication website

At the beginning of the United Industries Forum the question was posed: “What is it about gatherings of this kind that add value to the industries?” The answers were all about learning and information sharing. For example: “Opportunities for networking with other industry players” “Access to up-to-date information” “A break from the everyday routine in order to reflect on the bigger industry picture” “A chance to find out what others are doing through farm visits and discussion” “Practical skill development in workshops”

Perhaps these responses indicate that the starting point for strengthening these industries is to build on what is already valued by industry participants.

There is clearly considerable uncertainty about how strong the links are between these three industries and how much real commonality of interest exists between them. Nevertheless, it seems apparent that there is significant overlap between the information needs of participants in the three industries. It therefore makes sense for the initial focus to be on specifying these common information needs and putting in place strategies and mechanisms to meet them. If such an information management strategy is found to be mutually beneficial it could provide a foundation on which to build further areas of collaboration.

An information and resource management approach to strengthening industry organisation would require: consolidating the existing information resources of the three industries building on these resources and “filling the gaps” implementing mechanisms for easy user access to common information and marketing resources.

The scope of this shared knowledge base might cover, for example: Information on product specification Information on standards, quality assurance and continuous improvement systems Occupational health and safety requirements and information Food safety regulations and systems The management of natural resources, eg: soil, water, biodiversity, etc. Good practice case studies Supply chain management Market information/analysis

92 Educational resources – training programs, conferences, websites, publications • Industry directory

Developing, maintaining and facilitating user access to such a shared knowledge base requires the development of a knowledge management strategy for the industries and the deployment of knowledge management tools such as a website, database(s), newsletter(s), etc.

The design and implementation of an industries knowledge management strategy is a specialist task that would require the short term appointment of a professional project officer.

If there is sufficient support in the industries to make such an initiative viable, a small project steering committee should be formed to secure project funding, recruit the project officer and oversee the project. The project steering committee could also investigate possible sources of seed funding for website development.

Ongoing funding for the strategy could be derived from user subscriptions, both corporate and individual. Corporate subscribers would include industry associations, co-operatives, grower groups, buyer organisations etc. Their subscription would entitle their members/employees to access the knowledge base via, for example, a password-protected website and/or a periodic newsletter. Individual subscription would be available to growers and other industry participants who are not members of a corporate subscriber. One function of the proposed project officer would be to develop a business model for the ongoing viability of the industry knowledge management strategy.

The Herbs Australia website which was organised by Kim and Michael Fletcher recently closed down due to the lack of financial support from individual growers and the wider industry at large.

The site was developed as an information and marketing tool for the industry. People were pleased to use it but were not pleased to provide their own updated research information and to provide a minimum of financial support for its upkeep (pers comm.).

Section 6: The Future of the United Industries Convention Many participants expressed support for the continuation of biennial Conventions. There was general acceptance of continuing to encompass all three industries in these gatherings, while many participants favoured a clearer organisation into three distinct strands – herbs, native foods and essential oils. This format would allow networking across the industries to continue while making it easier for individual participants to remain focussed on the needs and issues of their own industry. The view was also expressed that the location of future Conventions should rotate to different states, though it was acknowledged that the necessary organisational capability may not be available in other possible Convention locations.

93 Response Form

1. Do you believe the Herbs, Essential oils and Native foods industries should be represented by one specific organisation? Yes/no 2. If more than one umbrella organisation is nominated, which industry groups should be aligned? ……………………………………………………………………………………… ……………………………………………………………………………………… 3. Summary of options – please circle your preferred option a. Change nothing and continue with the Biennial conferences. b. Form an umbrella organisation for all three industry groups. c. Build on the existing organisations within industry groups. d. Have individual membership structures across all states and industry sectors. e. Develop an information and communication network that all three industry groups can utilise. f. Form individual grower consortiums and co-operatives within industry sectors. g. Employ an Industry Development Officer (at an approximate cost of $20,000 per annum for one day/week) to facilitate information transfer and preliminary research. h. Form a steering committee for each industry group to advance some/all of the above options. i. If none of these options appeal to you, what strategy for building a stronger and more united industry would you suggest? ………………………………………………………………………………………. ……………………………………………………………………………………….

4. All the options require some form of ongoing annual funding. How do you suggest such funding be raised: Annual Subscription Yes/No Industry Levy Yes/No Fee for Service Yes/No Other (please provide details) ………………………………………………………………………………………… …………………………………………………………… 5. Would you be prepared to pay an annual subscription for access to information services? Yes / No

94 6. Would you be prepared to participate in a locally convened focus group to explore options for the future of your industry?

Yes / No

If YES please provide the following additional information:

Name: ………………………………………Phone: ………………………………

Address: …………………………………………………………… Postcode :

Email: …………………………………………………………………………

7. In what industry are you involved: F Culinary Herbs F Medicinal Herbs F Native Foods F Essential Oils

8. Which industry associations or grower organisations are you a member?:

……………………………………………………………………………………

9. What aspect of your industry are you mainly involved in? F Growing F Processing F Manufacturing F Wholesaling F Retailing F Logistics / Distribution F Marketing F Research F Extension Services F Other …………………………………………………………..

10. What are your particular areas of interest regarding the organisation of your industry? ………………………………………………………………………………………

Please return forms to : Phillip Wilk, District Horticulturist, PO Box 72 Alstonville, NSW 2477

Appendix 2

Herb Convention 2003 Survey

Q1. You are? 20 male 15 female

Q2. Your age is? 1 - 25 - 34 yrs 10 - 35 - 44 yrs 19 - 45 - 64 yrs 4 - 65 or more

Q3. What is your occupation/business? Consultant – 3 Speaker/Researcher – 3 Processor – 4 New growers – 2 Business manager – 4 Non agriculture business – 2 Nursery – 1 Industry Organisation – 2 Grower - 18

Q4. Where have you travelled from to attend the Herb, convention?

8 - Local 13 - NSW 7 - QLD 1 - Vic, 4 - SA, 1 - ACT, 1 - Tasmania

Q5. Did you find the content of the Convention?

19 - just right 5 - not relevant to my needs 2 - too technical

Q6. Where are you staying?

Lismore - 9 Other – 1 for how many nights? 2 x 3 nights & 1 x 5 nights

Q7. How did you hear about the conference?

Word Of Mouth - 19 Radio - 6 TV - 0 Newspaper - 2 Email – 5 Internet – 2 Invite – 2 Mail out - 5

Q8. What is your main reason for attending the conference?

11 - learn more about the medicinal benefits of herbs 12 - learn more about the culinary use of herbs 12 - learn more about other uses of herbs 12 - learn more about growing herbs for private use 22 - learn more about growing herbs commercially 5 - present information about herbs 16 - information sharing with others interested in herbs 9 - meet with friends or colleagues 9 - conduct business 3 - other reasons? Market players, Invest drying systems, Networking

Q9. Are you attending any other Herb Festival activities?

14 - Yes 20 - No

If so, which ones? 1 - Herb Parade 6 - Herbi BBQ 5 - Herb Bazarr Markets 1 - Expo

Q10. Please rate the following statements on a scale of 1-5 by circling a number for each statement very bad bad OK good very good conference location 0 0 8 15 8 timing of the conference 0 0 8 19 6 quality of presentations 0 0 5 13 9 opportunities for learning 0 0 8 9 12 information sharing 0 0 6 18 9 cost/ value for money 0 0 8 14 9 amenities 0 0 4 21 6 overall organisation 0 0 8 15 8 field days/trips 0 0 4 13 13 workshops 0 1 7 17 6

Q11. Which sessions did you find most relevant to your needs?

Workshop sessions on Marketing - 14 Soil Health - 11 Regulatory Compliance – 9 Production – 3 The Industry Forum – Industry Development Session – 6 Open Forum meeting market players – 2 Farm visits – 8 David McKinna Consultant overview – 1 Technical paper speakers – 2

97 New Industry Developments - 1

Q12. What are the most important or useful things you will take away from this convention?

- Networking opportunities and contact with other growers/marketers/processors – 12 - New information on herb production – 3 The need for an industry body to help with communication – 3 - Better understanding of a producers’ responsibility to processors in the production of herbs in terms of quality and food safety - Information overview on the total supply chain - Contact with growers and processors - Better understanding of the issues facing small herb industries

Q13. Are there other things that could have been included in the convention?

- More input from Southern Cross University required - Hosting AGM’s of the different industry bodies - More displays and industry exhibits from major companies in the supply chain - On farm production, industry best management practices (soil health) - New farmers – sustainability in commerce economics/vs environmental sustainability - Herb industry overviews - More detail on individual market requirements - Conference in other location than Lismore - More technical production information on oil production - Herbal products industry displays from herbal companies - More information on research and development - More time in workshops to discuss issues prior to running them - Nursery production of herbs

Q14. Will you return next conference

23 - Yes 4 - No

If no, why not? a Not relevant to my business b Too many subjects in too short time c Only if still in business d Depends on content

98 Q15. Would you like to learn more about herbs? 20 Yes 0 No

If yes, in what areas? For culinary uses - 7 For private use - 3 For medicinal purposes - 12 For commercial purposes - 19 Other: markets, regulation, industry growth demands, uses of native foods

Q16. How would you rate the opportunities for the herb industry in this region

0 poor 7 average 4 good 15 high 1 very high

Q17. Would you like to make any further comments or suggestions on the convention, festival or herb industry

• Put meeting market players first not last on the program • Change the location for each conference. Give other states a share – 5 • Not enough growers present • Top marks to organizers for friendliness/comfortable/helpfulness • Congratulations to the organizers who make these conventions happen - 2 • Conference needs a more specific focus on topics – either new players or developing the industry further • The industry needs to coalesce for its future and begin stronger marketing campaigns • Another conference in 2 – 3 years time • Fragmentation of the industry will continue to hinder its development • Need more Australia wide information on herbs • It was too rushed at meal times • Need a way of people introducing themselves at a dinner and state their business for networking purposes

Thank you for participating in the survey, we hope you enjoyed the conference!

99 Appendix 3:

Contacts - Sources of information Web sites The following sites provide information on current and potential medicinal and aromatic crops. They variously contain articles, newsletters and agronomic information; some host searchable databases; some have discussion groups; all have links to quality information sites or contacts for further research. Information on other Australian information and commercial web sites can be found in the Australian Herb Industry Resource Guide.

Australia www.agnc.wa.gov.au www.cellulosevalley.com (medicinal plant and natural product R&D) www.chc.org.au (Complementary Healthcare Council) www.dpi.qld.gov.au www.dpif.tas.gov.au www.mediherb.com.au www.newcrops.uq.edu.au (Australian New Crops) www.nre.vic.gov.au www.nt.gov.auldpif www.organicherbs.org.au (Organic Herb Growers of Australia) www.pilr.sa.gov.au www.rirdc.gov.au (Rural Industries Research and Development Corporation) www.tiar.tas.edu.au (Tasmanian Institute of Agricultural Research

Overseas www.agric.gov.ab.ca/.agdex/200/6383001.htrml (overview of production & marketing in Alberta) www.ars-grin.gov/duke/idex.htrml (phytochemical and ethnobotanical database) www.bhta.org.uk (British Herb Trade Association) www.ces.ncsu.edu/hil/spcrop-index.html (horticultural information leaflets) www.comp.leeds.ac.uk/pfaf (Plants for the Future) www.fda.gov/ (Food and Drug Administration, USA) www.herbalgram.org (focus on medicinal plant research) www.herbcentre.co.uk (National Herb Centre, UK) www.herbnet.org (Herb Growing and Marketing Network) www.hort.purdue.eduinewcrop/ (new crop research Purdue University) www.hortweb.cas.psu.edu/vegcrops/herbs.htrnl (agronomic information)

100 www.icmap.org (International Council for Medicinal and Aromatic Plants) www.ipmworld.umn.eduJipmsite.htm (integrated pest management) www.ncaur.usda.gov/nc/071home.htm (New Crops for Industrial Products) www.res.agr.ca/lond/pmrc/study/newcrops/ncweb.htrml www.soton.ac.uk/%7eicuc/index3.htrnl (Internet Centre for Underutilized Crops- new crops) www.uovs.ac.za/lib/agric/sancra/default.asp (Southern African New Crop Research Association - new crops) www.warn.umd.edu/~mct/Plants/index.html (links to numerous medicinal and poisonous plant databases) www.weeds.org.au (National Weed Strategy)

Australian sites focusing on business and/or legislative issues www.anzfa.gov.au (Australian & NZ Food Authority) www.aqis.gov.au (Australian Quarantine and Inspection Service) www.austrade.gov.au (Information on Austrade and exporting) www.bli.net.au (local, State & commonwealth licensing requirements for business) www.business.gov.au (entry point for business information, advice on starting a business etc) www.foodconnect.com.au (portal for food industry - news, articles) www.foodscience.afisc.csiro.au (Food Science Australia & CSIRO - fact sheets, safety issues) , www.law.gov.au (Commonwealth legislation and regulations) www.tga.gov.au (Therapeutic Goods Administration)

Free email newsletters There are numerous free newsletters available on the Internet - the following are industry specific email newsletters and are recommended. Herbnet - register at www.herbnet.org Richters - register at www.richters.com

101 Publications Books. reports, journals, magazines - Australia A Commercial Herb Industry for Northern NSW. an infant enterprise - Shirley Fraser & Jeremy P.M. Whish (Uni of New England - 1995)

Australian Herb Industry - afuture direction (report on industry workshop - Focus on Herbs & New England

Natural Products)

Australian Herb Industry Resource Guide - Kim & Michael Fletcher (Focus on Herbs/Herbs Australia) Australian New Crops Newsletter - available on line at www.newcrops.uq.edu.au Gippsland Herb Industry Assoication Newsletter - Ph 03 5157 1344

Commercial Production of Medicinal and Aromatic Plants - Information Seminar (Uni of New England - 1996)

Echinacea: a commercial overview (DPI, Qld)

Fact sheets produced by departments of agriculture in most states

Ginseng Growing in Australia - Fred & Charlene Hosemans (Gembrook Organic Ginseng Pty Ltd) Growing HerbsforProfit (Australian Commercial Herb Growers' Association- 1991) Herb Production in Tasmania - (report by Dept of Primary Industry & Fisheries) Herbal Harvest: commercial production of quality dried herbs in Australia - Greg Whitten (Bloomings Books) Liquorice - a commercial overview (DPI, Qld) New Crops DOOR Marketing: do our own research - ed.Dr Rob Fletcher (Dept Land & Food, University of Queensland, Gatton College) Penguin Modern Australasian Herbal- Kim Fletcher RIRDC produces a range of reports on herb and other crops. For information visit the website at www.rirdc.gov.au The Golden Age of Agriculture: growing the farm business The Goode Oil- (journal- Australian Lavender Growers' Association) The New Rural Industries (RIRDC)

Other - Australia Australian Grower's Guide (available on-line from www.mediherb.com.au Masterfoods Guide to Commercial Herb & Spice Growing (available from Masterfoods) National and State rural, agricultural and horticultural newspapers and magazines

102 Books, ports, journals, magazines - overseas Acta Horticulturae (International Society for Horticultural Science) Broadsheets produced by NZ Institute of Crop and Food Research on individual crops CRC Handbook of Alternative Cash Crops - I.A. Duke (CRC Press) Culinary and Medicinal Herbs (Ministry for Agriculture, Fisheries and Food, UK 1980) Directory of Specialists in Herbs, Spices & Medicinal Plants (Dept of Plant & Soil Sciences, Uni of Massachusetts, USA) Green Pages (business directory - www.herbnet.org ) Herbalgram (USA - quarterly magazine focusing on medicinal plants) Herbs, Spices and Medicinal Plant Digest (out-of-print but back issues are available - University of Massachusetts, USA)

ICMAP News (newsletter - International Council for Medicinal and Aromatic Plants)

IHA News (newsletter - International Herb Association - USA) Journal of Economic and Medicinal Plant Research Journal of Economic Botany Journal of Essential Oil Bearing Plants (India) Journal of Essential Oil Research Journal of Herbs, Spices & Medicinal Plants (Food Products Press) Journal of Nutraceuticals, Functional & Medicinal Foods (pharmaceutical Products Press) Journal of Phytochemistry Lavender: a commercial grower’s guide (NZ Institute for Crop & Food Research) Lavender: the grower's guide - Virginia McNaughton (Bloomings Books) Major Medicinal Plants - Julia Morton

Manual for Northern Herb Growers - Selja Halva & Lyle E. Craker (Dept of Plant & Soil Sciences, Uni of Massachusetts, USA) Medicinal and Aromatic Plants - Industrial Profiles (Harwood Academic Press) New Scientst (magazine); New Zealand Journal of Crop and Horticultural Science Perfumer and Flavorist

Plant Diseases (American Phytopathological Society)

Proceedings of special crop and agricultural industries conferences, Departments of ' Agriculture in USA and Canada, and of the Horticultural Industries Councils in USA)

Proceedings of the Agronomy Society of NZ. Proceedings of the annual IHA Coliferences (USA - International Herb Association) Proceedings of the annual Winter Getaway Conferences (USA - Herb Growing & Marketing Network) Processing Guide for Specialty Crops Wendy R. Holm & Dr Dugal MacGregor,

103 1 (Science Council of British Columbia) The Business of Herbs (USA - old issues of magazine still available) The Grower's Guide to Herbs and Spices (University Extension Press, University of Saskatchewan, Canada) The Herbal Connection (USA - business information, summaries of reports, marketing) The Medicinal Plant Industry - R.O.B. Wijesekera (CRC Press)

104 Registrants for the 2003 Herb Convention

Name Phone Address Akehurst, Arthur 02 66722770 NSW Agriculture, Murwillumbah NSW 2484 Alcock, Keith 02 66295130 372 Alphadale Rd, Tregeagle NSW 2480 Archer, Ray 07 54246770 Olive Products Australia,767 Bischoffs Rd, Coominya Qld 4311 Baird, Rob 03 92877748 103 Victoria Parade, Collingwood Vic 3066 Bax, John 02 82263000 Main Camp Tea Tree Bell, Ridley 02 66248258 Mountain Blue Orchards, PO Box 6001, South Lismore NSW 2480 Bigelow, Brian 02 66295202 PO Box 13,Lismore NSW 2480 Boyd, Lindsay & 02 66897444 Finger Liming Good P/L, 9B Noble Rd Blue Jamie Knob NSW 2480 Brace, Hamish 933 Kyogle Rd, Murwillumbah NSW 2484 Byrne, Tony 02 62724539 RIRDC, PO Box 4776, Kingston ACT 2604 Caffin, Nola 07 33469187 Food & Land Sciences, St Lucia Campus, University Of Queensland, Brisbane Qld 4072 Cairns, Heather 02 66534291 634 Frisby's Rd, Bundagen NSW 2454 Campagnolo, Levis 07 40652169 Lever Estate, Silkwood Qld 4856 and Myra Carkery, Ann 07 55994206 Northern Rivers Area Consultative Committee, PO Box 439, Tweed Heads NSW 2485 Carle, Stephen & 02 65859284 Roseneath Fruit & Leaf, Rawdon Island, Margaret Wauchope NSW 2446 Carruthers, 02 66261200 NSW Agriculture, Genevieve Wollongbar NSW 2477 Cavanagh, Heather 02 69332271 Charles Sturt University, Locked Bag 590 Wagga NSW 2678 Coleman, Tim 07 55993343 NSW State & Regional Development PO Box 6396, Tweed Heads South NSW 2486 Cooling, Beth 07 55332277 602 Gilston Road, Gilston Qld 4211 Cox, Justine 02 66262400 NSW Agriculture, Alstonville NSW 2477

105 Name Phone Address Crisp, John PO Box 169, Maclean NSW 2463

Crooks, Ray & Lisa 07 38021054 321 Holloway Rd, Chambers Flat Qld 4133 Doble Moore, 07 55232076 16 Dune St, Angela & Anna Fingal Head NSW 2487 Dudley, Lyle 08 86662013 PO Box 104, Wilmington SA 5485 Faragher, John 03 92109279 Department of Primary Industries, Knoxfield Victoria 3180 Fielke, Andrew 08 83444343 Red Ochre, Adelaide SA Ford, Jan 02 66281234 82 Cooke Ave, Alstonville NSW 2477 Forrest, Dave 02 66884346 King's Road, Federal NSW 2480 Freeman, Merideth 03 56598238 PO Box 274, Korumburra Vic 3950 Gardiner, Jason 02 66286632 435 Ellis Rd, Alstonville NSW 2477 Groom, Tim 03 62244511 Botanical Resources Australia, PO Box 852 Sandy Bay, Tas 7006 Gulson, Fred 02 66617951 Main Camp Tea Tree Oil Ltd, Main Camp NSW 2480 Gunn, Ward 0414 356588 Ace Regional College Harris, David 02 66878019 595 Houghlahans Creek Rd, Booyong NSW 2480 Hayes, Robert 02 66844580 Fresh Zest Pty Ltd, RMB 2520, Leongatha South Vic 3953 Hempill, Ian 02 95556039 Herbies Spices, 745 Darling St., Rozelle NSW 2039, 4/25 Arizona Rd, Charmhaven NSW 2263 Hess-Buschmann, 02 66897414 Australian Rainforest Products, PO Box Sibylla 6136, South Lismore NSW 2480 Hill, Geoff 02 66875190 15 Blue Horizon Drive, Lennox Head NSW 2478 Ingham Dr Elaine Soil Foodweb Institute, 1 Crawford Place, East Lismore NSW 2480 Jackson, Heather & 02 66793227 Hoggs Rd, Tyalgum NSW 2484 Gary Jenkins, Abigail 02 66261200 NSW Agriculture, Wollongbar NSW 2477 Keers, Joanna 02 66550785 1090 Promised Land Rd, Glennifer NSW 2454 Kesteven, Douglas & 02 66855335 607 Whian Whian Rd, Christine Whian Whian NSW 2480

106 Name Phone Address Knoch, Hans-Dieter 02 66832930 PO Box 67, Coraki NSW 2471 Kohlhagen, Malcolm 02 69200184 Truro, RMB 1011, Wagga Wagga NSW 2650 Krimmer, Tony 07 55994200 Northern Rivers Area Consultative Committee, PO Box 439, Tweed Heads NSW 2485 Lea, David 02 65642275 PO Box 202, Macksville NSW 2447 Lee, Robert 02 66841939 PO Box 785, Mullumbimby NSW 2482 Leonardi, Mel & 02 49436877 Yumalong Bush Tucker Tours, 71 Prospect Anna Rd, Garden Suburb NSW 2289 Lewis, Tony 02 66841939 PO Box 785, Mullumbimby NSW 2482 Lillywhite, Barry 02 69332434 Charles Sturt University Cheese Factory, Locked Bag 588, Wagga Wagga NSW 2678 Lines, Mark Holla-Fresh Pty Ltd, White Rd, Tantanoola SA 5280 Mazzarona, Gary 0428 664 899 106 The Channon Rd, The Channon NSW 2480 McDonald, William 03 98445406 Southern Sun Natural Health Products, PO Box 888, Templestone Vic 3106 McKinna, David 03 96961966 David McKinna et al. Pty Ltd, 131 Victoria Ave, Albert Park Vic. 3206 McNab, Cynthia 07 40933200 Tableland Herb Farm, PO Box 1899, Mareeba Qld 4850 McRitchie, Anne 02 66331394 Po Box 722, Kyogle NSW 2474 Moosberger, Paul 02 66204291 TAFE, Wollongbar NSW 2477 Morgan, Tony 02 66824343 Evans Head Bowling Club, 2 Beech St, Evans Head NSW 2473 Nguyen, Nguyet 02 93943288 Bronson & Jacobs, 5 Parkview Dr. Australia Centre, Homebush Bay NSW 2140 Nicholson, Dr David 02 66862354 ATTIA Ltd, PO Box 20, Tweed Heads NSW 2485 Nick, Rojo 02 66867273 TP Health, Ballina 2478 Oliver, Chris 02 66203504 Southern Cross University (Blackmores)Lismore NSW 2480 Olson, Merline 02 66225150 1 Crawford Rd, East Lismore NSW 2480 Parker, Jane 07 54459055 Botanical Food Co., PO Box 128 Palmwoods QLD 4555

107 Name Phone Address Patterson, Denise 07 54469243 All Rare Herbs, PO Box 91, Mapleton Qld 4560 Pengelly, Andrew University of Newcastle, Callaghan NSW 2308 Penninger, John 02 65482314 Hunter Valley Herb Farm, P O Box 117, Merriwa NSW 2329 Pettitt, Pauline 02 49912864 Pettitt Botanicals, 63 Desmond St, Cessnock NSW 2325 Powers, Nick 02 66287969 151 Cowlong Rd, Macleans Ridges 2480 Purbrick, Peter 07 46610700 Mediherb, PO Box 713, Warwick, QLD 4370 Read, Chris 03 62781601 Diemen Pepper, 21 Bay Rd, New Town Tas 7008 Richards, Shirley 07 34810360 1 Sunningdale Ave, Rochedale South Qld 4123 Riedl, Robert 02 66867273 TP Health, Ballina 2478 Saeck, Otto 98 Rishworth's Lane, Brooklet NSW 2480 Saffigna, Paul Dr Soil and Water, 45 Sunset Blvd, Tweed Heads NSW 2485 Scholefield, Peter 08 83732488 Scholefield Robinson, PO Box 650 Fullarton SA 5063 Seeney, Ross & 07 49924085 PO Box 85, Biloela Qld 4715 Norma Shand, Phillip PO Box 1079, Mullumbimby 2482 Short, Paul and Sue 02 99598256 4 Wudgong St, Mosman NSW 2088 Silverstone, Ben 21 Davies Ave, Springwood NSW 2777 Southwell, Ian 02 66261200 NSW Agriculture, Wollongbar NSW 2477 Stone, Jill 08 82982889 PO Box 737, Melrose Park SA 5039 Stone, Lyndell 02 65835647 PO Box 2537, Port Macquarie NSW 2446 Twyford, Ian 02 66793301 325 Limpinwood Valley Rd, Limpinwood NSW 2484 Van Essen, Ashley 03 62244511 Botanical Resources Australia - Ag Services P/L,PO Box 3251, Ulverstone Tas 7315

108 Name Phone Address Verbeek, Magda 02 66262450 Trickledown,1333 Wyrallah Rd, Limpwood NSW 2484 Williams, Gail 705 Reardons Lane, Swan Bay NSW 2472 Wilk, Phillip 02 66262450 NSW Agriculture, Alstonville, NSW 2477 Wright, Phillip 02 96313100 NSW Agriculture, Locked Bag 21, Orange NSW 2800 Young, William & 02 65644015 Graces Rd, Bowraville NSW 2449 Margaret

109