A group of apple and stonefruit growers is taking legal action against the Ministry for Primary Industries in response to an order to destroy tens of thousands of plants with claimed potential future losses of up to $1.5 billion.
The group says "flawed" decision-making by MPI over a paperwork issue may kill innovation in the sector and set it back by up to 15 years.
The group has requested an urgent judicial review of the MPI directive by the High Court at Wellington.
Group spokesman Kerry Sixtus of Pattullo's Nurseries in Napier said five parties, including his business, were challenging an MPI order last week for nurseries and orchards to contain or destroy 48,000 apple and stonefruit plants derived from plant material imported from a quarantine centre at Washington State University.
The centre has been providing plant material to New Zealand since the 1980s and is the main source of plant material and plant varieties for New Zealand's stonefruit orchards, said Sixtus.
The MPI directive includes original plant materials imported between 2012 and 2017 and also extends to budwood and propogated materials derived from the original plants, he said.
The order affects 32 orchardists, nurseries, importers and intellectual property companies in Hawke's Bay, Waikato, Nelson and Central Otago.
Apple exports earned about $700m this year and summerfruit exports returned about $77m. This excludes domestic sales.
NZIER advice to the group projects that losses over 10 years, based on current varieties, would be about $300m to $550m. AgFirst has valued the potential loss at up to $1.5b, said the group in a statement.
It seeks to overturn the MPI decision or at least an extension of timeframes in order for the ministry to gather and consider "all relevant facts".
"As MPI representatives have stated, the MPI directive is based on a paperwork issue. MPI has not provided any evidence of an actual biosecurity risk presented by the relevant plant material," said the group.
It claims MPI has failed to conduct the appropriate annual desktop audit and to properly complete the recent five-yearly audit of the Washington University facility.
"As such they have failed in their duty to uphold New Zealand's biosecurity requirements. The identified plants include new varieties that have been demonstrated to be pest and disease resistant, negating the need for growers to use sprays or heavy metals."
But MPI on its website said a routine audit in March found a number of critical non-compliances at the Clean Plant Centre Northwest at Washington State University.
"The audit showed we can have little confidence in the testing carried out by the facility. There were a number of failures to undertake the required testing, as well as incorrect reporting of results, and missing records. Two tests were recorded as negative ... but later recorded as positive, yet MPI was not informed.
"At MPI's request, US authorities had conducted an investigation which hadsince confirmed these findings.
"There was a systemic breakdown in the facility's systems and failure to undertake the testing required to show that the plant material is free from pests and diseases of concern," the website said.
Australia had now also suspended the facility's status as an approved source of stonefruit material, said MPI.
MPI's action puts New Zealand's position as an innovative fruit grower with a superior product at risk and will directly impact regions with consequences for jobs and associated business activity, the group said.
"Innovative plant varieties like these hold significant value for New Zealand. What we are talking about here is not just the plants that are in the ground now, but the future of the New Zealand apple and stonefruit industry."
MPI in a statement said: "We understand this is difficult for affected growers, nurseries and importers. MPI is confident with the decisions we have taken and our processes.
"We have carefully assessed all of the risks associated with this plant material. Our decisions are about protecting New Zealand and our wider horticultural industry from biosecurity risks.
"We can't comment further as the matter is before the courts."
Some of the plants have been in New Zealand in an open environment for six years, and have multiplied through propogation and multiplication, showing no evidence of pest or disease, the group said.