AHGA response to licensing Potassium and Calcium Nitrate Fertilisers

I have grave concerns about the consideration being given by the Council of Australian Governments (COAG) to extend the High Consequence Dangerous Goods (HCDG) legislation, or its equivalent, to include potassium and calcium nitrate. This would almost certainly have a catastrophic impact upon the commercial hydroponic industry in Australia.

Ammonium nitrate
The introduction of the High Consequence Dangerous Goods legislation, which required a grower to obtain a licence to purchase, transport, store and use ammonium nitrate, had only a minor impact upon commercial hydroponic growers. It was basically of nuisance value. Ammonium nitrate is often used by the more knowledgeable growers for pH control, but alternatives are available, although not as effective. Before the introduction of the HCDG legislation ammonium nitrate would have been less than one per cent of the fertiliser used by the commercial hydroponic industry. Consequently, very few hydroponic growers would have applied for a license.

Implementing the legislation has had two impacts which are significant and relevant. Firstly, there have been delays of nine months in getting licences approved. Secondly, the great majority of rural suppliers have decided not to stock ammonium nitrate and hence not need to get a licence. This has led to licensed growers having difficulties in obtaining the product.

Potassium and calcium nitrate
The extension of the HCDG legislation to include potassium and calcium nitrate has implications that are far more serious than with ammonium nitrate. It would almost certainly have a catastrophic impact upon the commercial hydroponic industry.

Unlike ammonium nitrate, these are the most critically important hydroponic fertilisers. Firstly, together they make up over two thirds of most hydroponic fertiliser mixes. Secondly, there is no substitute for either of them.

Delays in obtaining licenses are unlikely to get better, because there will be a huge increase in the numbers applying for licenses.

In hydroponics, the fertiliser solution is the only source of nutrients for the plant. This means that, unlike growing in the soil, there is no buffer against a lack of input of fertiliser and/or water. Consequently, if a grower runs out of either of these major fertilisers, it would take no more than a week for the plants to suffer and for the crop to become unsaleable.

Overseas experience
I don't know of anywhere else in the western world where these types of restrictions are in use.

They don't apply in the USA, for example, which is the home of the 9/11 attack and, especially, the Oklahoma City bombing which used ammonium nitrate. Currently, a few states have brought in legislation that suppliers of ammonium nitrate must keep detailed records of who buys it. That is as far as they are going.

The commercial hydroponic industry
Most greenhouses producing crops use hydroponics, and there is also significant outdoor hydroponic cropping, in particular, lettuce. Many people are aware of hydroponic lettuce and hydroponic tomatoes, which are marketed as such. However, there are other major hydroponic crops marketed only as quality produce, and hence not recognised as hydroponic. Amongst these are virtually all continental and Lebanese cucumbers, herbs, an increasing proportion of capsicum and asian greens, plus virtually all greenhouse cut flowers (roses, chrysanthemums, gerberas, carnations, lisianthus, etc, etc) and a range of smaller crops.

There are no formal government statistics kept for the commercial greenhouse or hydroponic industries. In 2001 RIRDC published a report on 'Hydroponics as an agricultural production system'.

That report stated that the industry was probably the fastest growing sector of the horticultural industries. It was estimated to have grown from about 150 hectares in 1990 to about 1000 ha in 2001. The estimated size of the industry in 2001 was 1000 to 2000 farms, employing up to 10,000 people. The annual farm gate value was estimated to be about $400 million. Since then the industry has continued to grow steadily. Over the past two years in particular, there has been a significant expansion in large scale glasshouses for hydroponic tomato production.

Hydroponic farms are spread widely across Australia, from rural to urban fringe areas. They are located in all states with no one state predominating. The bulk of the industry continues to be relatively small family owned farms.

Benefits of commercial hydroponics
There are major benefits of hydroponic cropping to the general population, irrespective of the high quality of most hydroponic produce. These relate to the environment.

Hydroponics is an inherently highly water and fertiliser efficient technique. This is because virtually all the water and fertiliser added are used by the plants, leaving almost no wastage. Water usage to produce $100 of product is typically only about 1 kilolitre, or even less, compared to 20 to over 100 kilolitres for soil grown crops. Well managed hydroponic systems have virtually no excess fertiliser and hence do not leach into the environment.

Hydroponics and greenhouse culture increases the incentive to use integrated pest management (IPM). IPM significantly reduces the usage of agricultural chemicals, especially the more severe ones, and increasing numbers of commercial hydroponic growers are going this way.

Implications for the commercial hydroponic industry
If a licence is to be required to purchase, transport, store and use potassium or calcium nitrate it could have the following effects:

Fertiliser costs will rise.
- Failure to obtain either of these fertilisers would result in the farm ceasing production in only one week.
- If growers apply for a licence, the delays in processing could result in the farm running out of fertiliser, with the above result.
- If local suppliers don't obtain a licence the cost of farmers obtaining it elsewhere would be expensive, and delays could give the above result.
- The cost of compliance with the license could be high enough to force many small family farms to shut down.
- Much hydroponic produce is under heavy price competition from imports, and the extra costs involved (and not imposed on these imports) will make this more severe.
- A major marketing aspect of most hydroponic farms is that they provide a constant year round supply of quality produce. If forced to close for an extended period, awaiting a license, they will have great difficulty regaining their lost market.
- If forced to close for an extended period, farmers will have to lay off their workers, most of whom are skilled. If these get another job they will need to be replaced with workers who will need extensive training and productivity will fall for this extended period.

In conclusion
Commercial hydroponic farming is a growing and particularly water efficient form of horticulture that should be encouraged. The requirement to obtain a HCDG license to use ammonium nitrate was only of nuisance value to hydroponic growers. However, extending the requirement to the critical fertilisers potassium and calcium nitrate, which is not done anywhere overseas, will financially stress Australian growers through compliance costs and increased fertiliser costs. More importantly, if hydroponic farmers are unable to obtain supplies of either fertiliser, this would result in their farm being forced to close down within only one week of running out.

Yours sincerely,
Graeme Smith

AHGA President

 

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