Organic growers get helping hand

By PHILIPPA STEVENSON

Growers of main crop kiwifruit will subsidise returns to organic producers by up to 50c a tray for their first-class organic fruit for two years.

The move was unveiled last week and involves most of the 1600 growers underwriting returns to 150 organic producers.

It winds back a support plan agreed between monopoly kiwifruit marketer Zespri and organic growers. That would have meant "green" kiwifruit and organic pools were combined for this export season, with organic growers paid $2.30 a tray more than green growers.

But strong condemnation of the proposal forced a rethink and Zespri has unveiled a scheme sanctioned by all growers.

Terry Richards, chairman of Kiwifruit Growers, who headed a committee reviewing the plan, said growers recognised a short-term solution had to be found while Zespri and the industry grappled with issues affecting organic fruit returns.

"I stress that we don't for a minute think we have found the long-term solution," he said. "The ideal long-term solution is to have organic [growers] standing on their own feet earning a good premium without any support from the other categories."

Zespri executives and overseas-based marketers convinced the committee that a reasonable volume of organic fruit on the market was critical to maintain the full portfolio of green, gold and organic fruit demanded by some customers in Europe.

Organic kiwifruit has been New Zealand's biggest and most successful organic export.

Growers have attracted premiums in past years in the high-paying Japanese market that well compensated them for orchard production generally 2000 trays a hectare lower than their conventional counterparts.

But in October 2000 law changes in Japan meant organic fruit that was fumigated for pests could not be sold as organic. Premiums of up to $3 a tray over conventional kiwifruit withered as organic growers struggled to rid their fruit of pests. Japanese quarantine authorities fumigated shipments with methyl bromide.

The high cost of fumigation, which shortens the storage life of the fruit, is paid by growers.

In 2000, organic growers received an average $6.95 a tray and green fruit was $6.69. Growers this year are forecast to receive $7.13 for conventional green kiwifruit, $8.21 for organic green kiwifruit, and $9.15 for gold kiwifruit.

Richards said Zespri could not estimate how long the problems would persist but alarm bells rang when the Certified Organic Kiwifruit Association (Coka) said member numbers were dropping fast.

"The main issue is working through the Japanese fumigation problem, and that's why we've suggested the top-up be for two years ... to give them some breathing space to do that."

Richards said the jury was still out on whether organic was experiencing a minor hiccup or had a more fundamental problem.

"What we've done is bought time while Zespri can attempt to solve the fumigation issue. If that can't happen goodness knows what the outcome will be."

Last year organic production dropped to around 2.6 million trays from 3.2 million trays out of a total crop of 54 million trays.

Coka chairman Leo Whittle said organic grower numbers had dropped from 186 to 150 as producers turned to conventional methods to keep their businesses profitable.

Those hanging in were working hard to improve yields to remain viable, he said.

"We're doing everything we can. We want the marketer to do everything they can and we want the industry, in the meantime, to understand the value we do bring besides the actual return, and that it's in their interest as well as ours that the category survives."

Whittle said the underwriting was "more like an investment" and if the full 50c was drawn on it would equate to only 2c a tray for green growers.

That was tiny compared with other costs, such as inaccurate forecasting of crop size, he said.

"If the crop estimate is wrong it can be 20c to 50c cost to the overall pool."

Organic growers were aiming for better pest control in their orchards, and packhouses were taking extra measures to check for insects.

Zespri was paying for research of fumigants which allowed the fruit to maintain its organic status, and was acceptable to the Japanese. Ozone-depleting methyl bromide is also due to be phased out by 2005.

Graeme Crawshaw, an organic kiwifruit grower and chairman of Organic Growers, an umbrella of 16 organic producer groups, said organic kiwifruit growers had not had a setback.

"It's fantastic that Zespri has realised that they can't be without this particular category."

He was confident organic fruit would continue to sell.

"Consumers around the world are very unlikely to start asking for more chemicals in their food."