Between the lines: Orchard gate is open for big boys

A year ago this month, the previous Government made the historic move to deregulate the kiwifruit and apple sectors while trying to do the same for the dairy industry.

The timebomb set then has just gone off.

With the exception of kiwifruit, producer boards were formed before the Second World War to coordinate exports to Britain, and to counter the purchasing power of large British buyers. Their legislated single-selling powers came later, kiwifruit's as recently as 1988.

When the National Government insisted that producer boards must go, farmers' structures of choice were producer-owned cooperatives.

If they were not to have unity by statute, they would have it voluntarily.

The dairy industry planned to replace its legislated monopoly with a pan-industry cooperative, leaving the industry much as it had been. The plan failed, the legislation is set to lapse on September 1 and the status quo rules for now, shakily.

The cooperative option was denied to the kiwifruit and apple industries, and while at first glance their new looks on April 1 this year did not look much different from the old look, the clock was ticking.

By the end of this week, Sir Ron Brierley's Guinness Peat Group and FR Partners, the investment bank formerly owned by Sir Michael Fay and David Richwhite, could own just a smidgen less than 40 per cent of apple marketer Enza.

Brierley and Fay, Richwhite are names that strike fear down on the farm. Whether they are directly involved in the recent moves is immaterial. The monikers are synonymous with corporate raiding - asset strippers few primary producers want around.

Many believe that if the corporates move into their patch, then they are on a slippery slope to peasantry.

Already price takers not price makers, producers reason that corporates will screw down prices for their raw products while maximising margins in processing or retailing. Hence the popularity of supplier-owned cooperatives.

But the grower-owned companies that apple and kiwifruit orchardists got on April 1 had back doors to which the much-feared corporates have found the key.

Shares in kiwifruit marketer Zespri and in Enza can be traded only among growers, but all it takes to qualify as a grower is ownership, or even lease, of a tiny corner of orcharding heaven.

Kiwifruit growers are having some of the best years ever and are probably little interested in cashing up their shares with which they retain control of their marketer.

But most apple growers could not be worse off, and have been ripe for the picking by newly qualified growers GPG and FR Partners.

The ideologues' belief that corporate know-how will be the saving of moribund agricultural industries is about to have its first test.