The Financial Review
Lucille Keen

If someone had told Darren Minter two years ago to plant more citrus, he would've laughed and walked away.

But now the Mildura farmer has used the surge in exports to China, Japan and South Korea following the Free Trade Agreements to buy another 100 acres and expand his business.

According to a report released by IBISWorld, the FTA's have helped citrus, banana and other fruit growers increase revenue from exports, with a growth rate of 19.9 per cent annualised over five years through to 2016-17.

It expects exports in the citrus, banana and other fruit growing industry will generate $689.6 million in the current financial year, an increase of 3.9 per cent on the previous year.

The Australian FTAs came into effect with Korea in April 2014, followed by Japan in January 2015 and China, December 2015.

The report found oranges accounted for the largest share of citrus fruit production in Australia, followed by mandarins, lemons, limes and grapefruit.

This segment has increased as a share of industry revenue over the past five years. The total value of citrus fruit production has grown at a faster rate than overall production over the period, indicating higher farmgate prices for citrus growers. Additionally, citrus fruit quality has increased over the past five years, largely due to favourable weather conditions.

Mr Minter said five years ago was "disastrous" for the citrus industry and the family farm, which has been held since 1914, focused on it's asparagus and almond crops.

He said by already having the "foot in the door" with China before the FTAs helped.

"But having them signed has definitely helped our bottom line," Mr Minters said.

Mr Minter said his focus on producing first class fruit, which now makes up 60 per cent of his crop, helped the growth in China.

The report found it wasn't just fruit growers who benefited from the FTAs, outdoor vegetable growers have seen revenue from exports increasing at 8.9 per cent annually over the five years through 2016-17, and are expected to generate $303.7 million in 2016-17.

The largest producer is Costa Group Holdings Limited, holding a 14.7 per cent market share of Australia's fruit and vegetable sector.

Greg McMahon is the founder of Seven Fields, which has five citrus farms in Victoria, one in Queensland and one in the Northern Territory. 

"I'm a big fan of Andrew Robb (the former Trade Minister who introduced the FTAs)," he said. "On average Australian citrus products have a better flavour, are better looking and have a better shelf life."

"They command a premium. But the Australian product is very expensive, because high production costs, with labor making up the most of it because the fruit is handpicked. Even with the FTAs it's still more expensive but it takes the edge off," he said. 

Citrus Australia chief executive Judith Damiani said naval oranges and mandarins were the largest exports to China for the sector.

She said there was an increasing demand for lemons in Asia, particularly China, because of their health properties.

Ms Daminani said it was surprising the growth coming form Japan following the FTA given it was a mature market.

She said Korea remained difficult but the high tariffs for oranges, which were around 50 per cent a few years ago, were slowly dropping to 20 per cent.

"It was a record export year the citrus industry last year, with 218,000 tonnes worth $326 million exported," Ms Damiani said.

This was up on the 157,700 tonnes exported in 2014, worth $197 million.

Ms Damiani said in 2016 China became the largest export market for Australian citrus exports, worth $72 million.

"Asia is the place to be," she said.