The bacterial vine disease that invaded New Zealand kiwifruit orchards last year looks likely to cut export returns by as much as a quarter in the year to March 2013, according to the Ministry of Agriculture and Forestry's latest update of the outlook for agriculture.

MAF warns the Pseudomonas syringae pv actinadiae bacteria, better known as Psa, is having a severe impact on the gold kiwifruit varietal, and the effect on green varieties is still unknown.

That could cut the volume of gold kiwifruit exports by two-thirds and shave an eighth from the volume of green fruit sold overseas.

That means the value of total exports could drop by as much as 25 per cent to $782 million in the 12 months ended March 31 2013, though MAF officials think an 18 percent decline to $862 million is more likely.


Under MAF's best case scenario, export returns would fall by 13 per cent to $915 million in the 2013 year.

"The impact Psa has had over the past year, and will continue to have on rural businesses and communities has raised the question of the government's role in assisting recovery and MAF is investigating options," it said in a statement.

The Psa bacterium was discovered at several orchards last year, prompting the government and statutory monopoly exporter Zespri to stump up $25 million apiece in a plan to contain the spread of the vine canker.

MAF said Te Puke in the Bay of Plenty was the hardest hit area, and just over a quarter of kiwifruit orchards are known to the have the bacteria present.

Last week, shareholders in grower Satara Cooperative nixed a bid to merge with the larger Seeka Kiwifruit Industries in a deal that was seen as giving scale in the troubled industry. Last year, Satara abandoned a proposed merger with Eastpack after Eastpack's credit lines dried up following the Psa outbreak.