There is a compelling business case for Māori organisations to move away from traditional farming practices and embrace investment opportunities in horticulture, industry sources say. Not only because the financial returns and job prospects are far greater, they say, but it is also a step towards a more sustainable future for the next generation.
In addition to the conventional financial drivers for investment decision making, Māori organisations (iwi, hapū, trusts and landlords) have always been influenced by their strong beliefs in kaitiakitanga (guardianship) and mana whenua (iwi and hapū who have traditional authority over the land).
While this values-based position remains important to Māori kaupapa (values), in recent years these organisations have moved away from passive use of their land holdings to take a more proactive approach to their investments.
Traditional land use options have typically taken the form of passive landlords or as farmers themselves, but they have now had to look at the subsequent effects that dairy and cattle farming has had on the environment.
The degradation of local waterways is of particular concern, say Māori organisations, because of the relationship they have with mana whenua.
Ray Morrison, general manager of Ngāti Whakaue Tribal Lands (NWTL) said any investments they consider are guided by mana whenua and kaitiakitanga values.
"When we look at investment propositions, diversification plays a big part in our decision-making along with the value proposition for our owners including shareholder wealth and job creation. These opportunities must also align to our organisational values and meet our risk profiles to ensure they also make commercial sense," Morrison said.
In 2007 NWTL got out of dairy farming due to environmental and commercial reasons when they reached a settlement with the regional council under its Nitrogen Incentives Programme.
NWTL has recently tripled its forestry footprint due to the impact carbon has made on the overall attractiveness as a forestry investment while also exploring horticultural investment opportunities.
"We are part of the Te Arawa Primary Sector Group or TAPS which is a group of Te Arawa land-owners who collectively own over 30,000 hectares of land. We collaborate where possible through joint research, information sharing and investment opportunity analysis in order to leverage any collective advantage from potential agri-business opportunities," he said.
Jerry Prendergast, president of pan-produce industry organisation United Fresh New Zealand Inc, says the strong interest Māori trusts are demonstrating in investing into the horticultural industry is exciting.
"Iwi trusts have significant capital, and this combined with their long-term view to investments is excellent for our industry as a whole. It utilises land in an efficient way, creates jobs, is good for our economy and enhances our reputation for growing and supplying New Zealand and the world with the best fruit and vegetables in the world," Prendergast said.
In a move to diversify its portfolio, get better returns from their land and become more environmentally sustainable, Pāmu, New Zealand's largest farmer, recently had a 40 hectare block of land converted to avocados.
NZ Avocado chief executive Jen Scoular said the conversation about optimal use of land needed to be given more focus across New Zealand.
"When we look at avocados, we look at market demand, infrastructure to manage growth and feasibility in our climate. I feel that (within the growing areas for avocados), if we add a four hectare block of avocados to the average sized dairy farm in New Zealand, you get diversification, great kai, a succession plan because whānau can run a four hectare avocado orchard, and it optimises the financial return to the farmer and the country," Scoular said.
Katie Paul is part of the new generation of Māori governors sitting across multimillion-dollar owned Māori land trusts in the Bay of Plenty. Articulate, highly educated and grounded in traditional cultural values, she says doing business with Māori trusts is not just a commercial transaction.
"Our owners have strong values around sustainability and the environment. If these values aren't considered, then this could limit your time as a governor on these trusts.
"To put it simply, we are kaitiaki. We inherit the land, then we pass the land on. We need to think long term, and intergenerationally," Paul said.
Collaboration and integration of resources are another common theme when looking at Māori organisations and how they do business. Whanaungatanga (relationships, sense of family connection) is important. The ability to pool resources and knowledge allows these organisations to explore opportunities they would not have been able to explore as an individual entity, to ensure scale and much higher investment returns.
Miro Limited Partnership, a collaboration of 30 Māori iwi, hapū, land trusts and investors across the motu (nation), says it aims to put high value horticulture over under-utilised Māori land and teach Māori growers how to grow that horticulture. Ultimately resulting in those Māori landowners managing high value businesses.
While Miro says it is passionate about increasing landowner's investment return, central to this strategy is providing jobs and skills capability to those who whakapapa or are connected to that iwi, trust or landowner.
"In Te Teko we are leasing a 30 hectare block of land where the owners were receiving $500 per hectare per annum. We have now transformed that land with high value horticulture, in this case blueberries, and are using local people to manage the land," said Liz Te Amo, Miro chief executive.
Miro's aim over the next 10 to 20 years is to be providing NZD$90,000 average export returns per hectare with their blueberry varieties.
"A lot of landowners don't have the knowledge to recognise what the best crop for their land is, where to get their PVR (plant variety rights) or plants, land development plan or resource consent. Where is the water going to come from, who's going to build the orchard and who's going to do the marketing and distribution?
"So co-ordinating all of that, Miro can assist Māori growers by playing the role of Value Chain Captain for Māori landowners, similar to the role Zespri plays for kiwifruit or Rockit Apples plays for apples," said Te Amo.
Horticulture's financial returns demonstrate a compelling business case. According to the Primary Sector Council, Export Returns Per Hectare has kiwifruit leading the way with returns of (approximately) $130,000 per hectare, followed by pipfruit on $70,000, wine on $40,000, dairy around $7000 and forestry $1000-2000 per hectare.
"The financial returns in addition to the social and environmental alignment of values, sets the platform for a strong relationship between Māori organisations and the horticultural sector," said Prendergast.