Confectionery giant Ferrero Group has defended its decision to abandon a research farm in the New South Wales Riverina where it tried to grow hazelnuts.
The family-owned Italian company spent 10 years trialling trees for a counter-seasonal supply to the northern hemisphere but abandoned the project late last year.
The 2,700 hectare farm at Narrandera and its substantial water rights are now on the market for $80 million.
About 1 million hazelnut trees are being ripped up and turned into woodchips.
The company said increasingly adverse weather conditions meant the Riverina region was not conducive to hazelnut farming and the project had failed to achieve even minimally acceptable yields.
A company spokesman defended the group for receiving financial support from the federal and NSW governments.
Ferrero had spent 10 times more than the support provided to develop Australia’s first hazelnut research and development centre.
“Furthermore, Ferrero heavily contributed to upgrade the regional electrical grid, which will continue to benefit the farming community,” the spokesman said.
Hazelnut cultivars imported to Australia for the trial had been sold to growers in other regions, including Tasmania, and the company’s agronomy team had shared important information that would help the broader hazelnut industry.
“This will support better-quality nut production with the benefit of the research conducted on different soil types during the pilot project,” the spokesman said.
A ‘very brave’ project
The project was always a long-odds gamble, according to one of Australia’s pioneer hazelnut growers.
Basil Baldwin farms hazelnuts near Orange in NSW’s central west.
He worked as an agronomist before establishing his 10 hectare orchard more than 20 years ago, has a PhD on hazelnuts and helped write a NSW growers manual.
“I thought they were very brave,” Mr Baldwin said.
Even with abundant irrigated water, the dry arid conditions in the Riverina were too harsh for a type of tree originating in the cool climate of north western Europe, he said.
“I thought maybe if you did certain things, you might get it to work, like shading the whole orchard, just for example, which would be very expensive,” Mr Baldwin said.
Australia has about 70 hazelnut growers and most, like Mr Baldwin, run small family enterprises with fewer than 6,000 trees. They supply about 10 per cent of Australia’s hazelnut market.
According to an Australian Nut Industry Council report in 2022, the hazelnut sector was set for rapid expansion as Ferrero’s one million trees came into production.
Domestic production was only about 400 tonnes but it was likely to grow rapidly to 5,500 tonnes, the report said.
Local production unaffected
Hazelnut Growers of Australia executive officer Trevor Ranford said Ferrero’s exit was unlikely to impact local production.
“Ferrero were about Ferrero and their nuts were for their production,” Mr Ranford said.
“They’re a confectionery business, where the rest of the industry is very much about the fresh market.”
He said the industry was hopeful of obtaining a research grant from Agrifutures Australia, which would help small growers expand and introduce new players in the market.
Many growers had small orchards that were part of diverse farming operations and the association was hopeful of expanding this sector with a goal to triple plantings in the next five years.
“As they become more comfortable with the crop, they will plant more trees and it will grow,” Mr Ranford said.
Ferrero said it was disappointed with the pilot project’s demise, but this would have no impact on the group’s global operations or on its manufacturing base at Lithgow in NSW, where it makes confectionary products such as its hazelnut chocolate Nutella spread.
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