Victorian tomato grower Bruce Weeks 'We're just hoping to hang on.' Credit:Craig Abraham The answer is as much a story about the competitive edge and romance of growing tomatoes in Italy as it is of the relentless forces of globalisation eroding Australia's food exports and now its ability to maintain a viable domestic food processing sector. What happened to the Australian canned tomato industry has happened, or is happening, to Australian canned fruit, frozen potatoes, seafood and processed vegetable industries. TOMATOES for processing - pastes, passatas, whole peeled, pizza bases - are a global commodity. The US is the biggest player, then China. Together they produced 38 million tonnes of tomatoes last year. Italy comes third, with about 5 million tonnes, while Australia is a comparative minnow - 250,000 tonnes is a good year. Italy has hundreds of tomato canneries and farms covering nearly 70,000 hectares, with the best areas around Apulia and Campania in the south and Emilia-Romagna in the north. Last year, Italy's tomato farmers earned just over half a billion dollars. Such economies of scale trim costs, but Italy's tomato industry has two key competitive advantages: cheap, sometimes illegal, migrant labour andEuropean Union subsidies. For 20 years, Italy has relied on field workers from Sudan, Eritrea, Ethiopia, Morocco, Algeria, Tunisia, Egypt and India. The Rome office of Doctors Without Borders has documented the plight of the migrants in several reports, the last in 2008. They describe a workforce vulnerable to violence and intimidation, living in extreme poverty in disused buildings with no toilets or access to healthcare. According to The Ecologist magazine, which visited Italy's Basilicata region last year, the workers were paid between $25 and $38 a day. "The stories coming out of the Napoli region where they grow tomatoes are just appalling," says Mildura chef Stefano de Pieri, just back from three months in Italy. People, he says, care about where their coffee comes from but not, it seems, their tomatoes.

An experienced Australian importer, who declined to be named, told The Sunday Age the worker exploitation was "very heavy in the past" and the industry was now more accountable. Conserve Italia, makers of the internationally popular Cirio brand, imported to Australia by Conga Foods, has guaranteed all its production is ethical, while Coles and Woolworths say their home brand suppliers must also comply with ethical supply chain requirements. (The Australian industry is not entirely innocent: migrants, mostly Asian or Indian, are used at harvest, and while the farmers pay a contractor about $22 an hour for each worker, they admit they have no idea how much each worker is paid.) The European Union has protected the processed tomato industry with subsidies since 1978. Annual payments to farmers and canneries peaked mid last decade at $493 million but are now slowly falling. For every dollar an Italian farmer makes, the EU puts another 41¢ in their pocket, which means they can sell to canneries more cheaply than an Australian farmer. As the subsidies decline, the farmers are asking the canneries for higher prices. This year they got a 26 per cent price increase, which means, finally, they get the same price as Australian farmers: roughly equal to about 4¢ per 400 gram can. From 1992 until 2002, Australia fought the dumping of cheap Italian tomatoes by charging the importers duties. But in 2002, an importer legally challenged the federal government over the measures and won. Then came the surging dollar, rising by a third against the euro, making it even cheaper to ship to Australia. Since 2007, imports of tomatoes have grown by 40 per cent. Industry sources say importers can buy cans from 32¢ for lower quality, to 60¢ for premium quality. It then costs between 12¢ and 17¢ a can for shipping. Coles, Woolworths and Aldi are the biggest importers of Italian tomatoes under their home brands, with 53 per cent of the market. Indeed, the humble can of Italian tomatoes is one of the biggest import items for the Coles and Woolworths labels (each Australian eats on average 25 kilograms of processed tomatoes every year). Both supermarkets have the same reasons for using Italian, rather than local, tomatoes. They say the richness, sweetness and consistency of Italian tomatoes have become the world's "taste benchmark", that the tomato is to Italy as the banana is to Queensland. "This is now what people expect tomatoes to taste like," Woolworths spokeswoman Clare Buchanan says.

In a completely unscientific experiment, The Sunday Age put this theory to a taste test. The Ardmona tomatoes and accompanying juice looked just as thick and rich as the premium Italian brands such as Cirio, but were a little less sweet. The local product earned the approval of a veteran of the import business who joined The Sunday Age in the test. "That's pretty good,'' he said. The Australian products, he said, once barely resembled tomatoes and were greenish, veiny and hard to cut. The supermarket offerings were good but not quite as good as the Italian brands. The American tomatoes were the next best and last was the Chinese can, which produced only three anaemic-looking tomatoes. Coles and Woolworths also say they turned to Italy because the Australian industry could not give them a consistent supply - something the industry finds difficult to argue against. The Australians did everything right. They stood nakedly unsubsidised in the global market, and they responded by improving quality and becoming one of the world's most efficient producers. In a good year, it can muster 150 tonnes a hectare (compared to 74 in Italy and 105 in California). But the industry could not tame the climate. The 10-year drought was tough - water was wildly expensive - and SPC Ardmona, owned by Coca-Cola Amatil, struggled. Processor Simplot gave up canned tomatoes. Then the floods hit, wiping out half the 2010-11 crop. Mark Lightfoot from Conga Foods believes the Australian industry is vulnerable because it is located in one small area in northern Victoria and southern New South Wales. The whole crop could be wiped out by one major climatic event - unlike in Italy, where the crop is spread from one end of the peninsula to the other.

"I feel for the producers here," says Lightfoot. ''The demand in Australia exceeds what the producers here are able to supply.'' The Japanese-owned company Cedenco processes and dices tomatoes in Echuca before sending them to SPC Ardmona. Chief executive John Brady has high hopes of turning things around. Cedenco itself is a major tomato grower, mainly for paste. It employs 33 people, 200 seasonal workers and contributes about $50 million to the regional economy. Brady is employing better technology and practices and spreading the tomato fields wider to reduce the climate risk. He understands the supermarkets' complaints of inconsistent supply. "I intend to make sure that's not an excuse in the future.'' (When asked by The Sunday Age, Woolworths would not commit to using Australian tomatoes for its home brand if the next crop was plentiful; Coles said it would bring the Australian product through SPC Ardmona if supply was sufficient.) The University of Sydney's associate professor of economic geography, Bill Pritchard, who has written a book on the global market for processed tomatoes, says the experience here shows our farmers can be the world's smartest, but "we get crunched by often unfair competition and large economies of scale". The future of global tomato processing is uncertain, and not just for Australia. Importers are struggling with competition from the supermarkets' own labels. In Italy, costs are likely to rise as Europe limits its protection for farmers, up for review next year.

Loading Even Italy is not immune to cheap Chinese competition. In 2004, it implemented labelling regulations to identify Italian tomato products. Already, China's largest market for its tomato paste is Italy. Back in Rochester, Bruce Weeks is hoping Australian consumers will help. "If Australians want people employed in Australia, they've got to buy Australian made," he says. "Every day here people are being put off. Every day there's jobs being lost. It just can't keep happening … Eventually there will be nothing produced in Australia."