Jamie Gray is a business reporter for the NZ Herald

Manuka offers farmers a sweet future

Manuka is making a big comeback with plans to develop a $1.2 billion honey industry. Photo / Getty Images
Manuka is making a big comeback with plans to develop a $1.2 billion honey industry. Photo / Getty Images

Manuka - once the scourge of many a back country farm - is making a big comeback.

Serious plans are afoot to establish plantations of manuka - commonly referred to as "scrub" - to aid the production of medical-grade manuka honey.

And there is big money involved.

The Ministry for Primary Industries has invested in the High Performance Manuka Plantations Primary Growth Partnership (PGP) programme, which aims to improve the yield and reliability of supply of medical-grade manuka honey.

The programme intends to lift the value of the New Zealand manuka honey industry from an estimated $75 million in 2010 to $1.2 billion a year by 2028.

Going on the number of promotional tents at the latest Fieldays at Mystery Creek, farmers are giving manuka another look, particularly as diversification has become more than just a buzzword.

The resurgence of manuka, proponents say, can make economic sense for some farms, while at the same time doing the environment a big favour by controlling erosion and improving water quality.

In the years to come, dedicated manuka plantations could dot the landscape, particularly if international demand for high grade manuka honey continues to outstrip supply.

As it stands, high-grade manuka honey for medical use - particularly for the treatment of severe wounds - can sell for north of $60 a kg at the farm gate - and prices generally have doubled over the last 10 years.

Ruapehu farmer Dan Steele is letting some of his land revert back to manuka "scrub". Photo / Supplied
Ruapehu farmer Dan Steele is letting some of his land revert back to manuka "scrub". Photo / Supplied

Ruapehu farmer Dan Steele has for years been letting some of his more challenging land revert back to manuka, raising a few eyebrows along the way. Not so long ago, any resurgence of manuka would have had farmers reaching for their chainsaws and scrubcutters, but attitudes are changing.

"Farmers considered it a weed, even though it's a native species," Steele says.

"They have disregarded it for some time as being an essential for regeneration of our native forests," he says.

Steele's 2800ha Blue Duck Station, near Taumarunui, is 60 per cent sheep and 40 per cent beef. He has a small ecotourism business and Steele is big on conservation, particularly when it comes to helping the station's namesake - the blue duck.

In days gone by, farmers in the area have pitted themselves against the elements and lost. Steele's farm takes in some land made famous by the so-called "Bridge to Nowhere".

Returning World War I soldiers were rewarded by the Government with land in the area but the elements, low prices, and the onset of the Depression forced them off their farms.

These days, Steele - unlike his predecessors - is not prepared to do battle with nature. He is happy to let 20 or 30 per cent of his rougher country revert back to manuka - a "nursery" species that eventually allows other natives to establish.

Now, thanks to escalating manuka honey prices, an economic value is being associated with a hill face of manuka, and it is sometimes used as a selling point by farm realtors. Yet old habits die hard and there are still farmers who won't have manuka on their properties.

"It will be a generational change because there will be some farmers who will still hate manuka," Steele says.

On Steele's station, land is reverting back to manuka along the banks of all its streams.

"We are getting big riparian margins of manuka in the hill country, which is good for water quality and biodiversity corridors and for providing incomes," Steele says. Two bee keepers use Steele's property and the station has its own brand.

"It is a mindshift even for me," he says. "Fifteen years ago we were spending of lot of time cutting that country to keep it clean and because we were told that you needed to get that scrub off the hills to have a successful farm."

Attitudes to manuka - right up to government level - have gone full circle.

As the New Zealand economy started to tank in the 1970s, the response to the downturn from the Muldoon-led National Government was to encourage the primary sector to produce more.

That led to a number of incentives. One of them was the Land Development Encouragement Loan (LDE) scheme - cheap loans made available to develop unproductive land. Under the scheme, much of the country's manuka-clad back country was broken in.

Fast forward to today and manuka qualifies for the Ministry for Primary Industries' afforestation grants.

While farmers like Steele are more inclined to look the other way these days when they see manuka creeping back, others are looking at manuka becoming a serious land use.

Allan McPherson, commercial manager for Manuka Farming NZ, says international demand for high UMF (unique manuka factor) honey is driving enthusiasm for manuka plantations.

Manuka Farming NZ is the commercial arm of Manuka Research Partnership (MRPL), which has undertaken research to prove the business for manuka plantations as a viable alternative land use on marginal pastoral land.

Honey bees at work on blossom near their hives. Photo / File
Honey bees at work on blossom near their hives. Photo / File

McPherson says commercial opportunity for high-performance manuka plantations has arisen from the increasing global demand for high-quality New Zealand manuka honey for medicinal applications and culinary uses.

MRPL, formed in 2011, has a raft of primary sector and apiary interests as shareholders, including Arborex Industries, Comvita NZ, Hawke's Bay Regional Council, Landcorp Farming, Nukuhau Carbon and Te Tumu Paeroa, the Maori Trustee.

"Manuka honey has proven to be a big hit with consumers, but high-end manuka honey has proven its worth in the treatment of serious burns and wounds," McPherson says. "What we are targeting is the high UMF honey that can be produced to meet medical-grade end uses, so we are not about producing low-value honey that you would typically see sold as a breakfast spread."

Dedicated manuka plantations would help to take some of the guesswork out of honey production, he says.

McPherson says it is not unrealistic to expect to see dedicated manuka plantations dotted around the countryside in the years to come.

"At the moment, the international demand for high UMF honey is far outstripping our ability to supply it, so this is where dedicated plantations will come in to play.

"The other positive benefit of dedicated manuka plantations is that it can also tick some environmental boxes as well, and that's where we are targeting some of this erosion prone land in the North Island and targeting forestry as well."

McPherson says plantation forest owners are looking to manuka as an alternative, particularly after the completion of a harvest rotation, the attraction being that they don't have to wait the 25 years or so to get a return from the land.

New Zealand exports about 9000 tonnes of manuka honey annually. Many exporters are under immense pressure to satisfy the needs of customers, and the market is expected to grow with the development of emerging economies.

MRPL is embarking on a strategy to promote the planting of superior manuka cultivars and seedlings to landowners interested in diversifying farm/forestry incomes with dedicated manuka plantations.

The PGP programme partners are researching how local ecosystems affect manuka honey yields and quality, and studying a range of manuka genetic material provided by Comvita NZ from its breeding programme.

Yobees Honey hives at Neil Walker's Rangitatau West Rd trial manuka planting. Photo / Bevan Conley
Yobees Honey hives at Neil Walker's Rangitatau West Rd trial manuka planting. Photo / Bevan Conley

Liquid gold feeds Comvita's growth

NZX-listed Comvita has become a half-billion dollar company, thanks largely to the rise of manuka honey.

The Te Puke-based company, which makes natural health and beauty products derived largely from manuka honey, fought off a 2011 takeover attempt by Singapore's Cerebos Pacific, which offered $2.50 a share. It was a good call: the company's shares closed yesterday at $11.80, giving it a market capitalisation of $472 million.

Much of that success can be put down to manuka honey, which has uses ranging from breakfast spreads to special dressings for wounds.

Comvita's chief supply chain officer, Colin Baskin, has been doing research to produce superior manuka plants for differing environments.

"There is a strong commercial justification for growing manuka for honey production on marginal land which is often providing no revenue stream for the landowner," he says.

"In some areas it is outstripping revenue from existing farming practices."

Much of New Zealand was once covered in manuka and land that was cleared has become prone to erosion as a result.

Comvita started its manuka optimisation programme about 10 years ago. In the early days, the company collected wild seeds and initiated a programme to get the best floral density to get more bees, flowers and nectar.

As the programme progressed, Comvita started to identify the important chemical markers within the nectar.

Over the next five years, Comvita expects to plant 11,000ha of manuka on its own properties and others.

Baskin says manuka will be the best possible use for much of that land, particularly as it will be Kyoto compliant and eligible to earn revenue from carbon credits.

"Our manuka breeding programme is targeting the higher end of the UMF [unique manuka factor] scale and that's really where the shortage of supply is," he says.

Comvita already has a 90ha block in conjunction with the Hawke's Bay Regional Council, which will yield its first honey crop this year.

Baskin says manuka honey has characteristics no other honey has - whether it's consumed or used for medical applications.

"It's a very small sector within the honey world, but it is gaining momentum now and there is significant international demand."

Farmgate honey prices have doubled in the past 10 years.

Low-end manuka honey sells at the farm gate for $20 a kg while high-end product, destined for medical markets, can fetch north of $60 a kg.

- NZ Herald

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