Export study? Not now, say growers

By PHILIPPA STEVENSON agricultural editor

Apple growers are likely to respond to a long-term review of their industry with a deluge of submissions, but only if they survive this season.

Pipfruit Growers chairman Phil Alison said growers had more pressing concerns than a Ministry of Agriculture and Forestry (MAF) discussion document released this week.

The report presents several options for changes to the export regulations which give apple marketer Enza its near-monopoly on the $600 million, 20 million-tray apple crop. Independent exporters are allowed only if they are complementary to Enza.

But any changes to the year-old regulations resulting from the review will not come into effect until the 2001-2002 season.

Mr Alison said the long-term issues needed addressing, but growers had to first get through the short term.

With corporates Guinness Peat Group (GPG) and FR Partners dominating Enza, growers were locked into a system that did not favour them, he said.

Before this year's takeover by the companies, Enza operated like a cooperative and growers had an opportunity to modify its behaviour to reflect their needs.

"With corporates owning it, that is not the case any more and that's causing a huge amount of unease among growers."

Mr Alison said growers were concerned about how much of the crop Enza would market, and the costs to them under a new system of supplier groups.

His organisation had seen two draft supply contracts that it found unacceptable. Discussion was continuing with Enza, but "ultimately if there is not meaningful resolution of key aspects, then we have some serious issues we have to resolve pretty urgently."

The MAF report said New Zealand was rated as the world's most competitive apple producing country, but that did not translate into high profitability.

Sample orchards in Hawkes Bay and Nelson had made losses in most of the past five years and carried substantial debt. In 1999-2000, only 11 of 20 orchards sampled had a cash surplus before paying interest; only two had a disposable profit; and the bottom quarter of orchards had an average $147,000 loss.

Mr Alison said that in the present year there were too many variables, including the sale price and exchange rate fluctuations, to speculate on likely grower incomes.

But MAF said growers lacking "competitive strengths" such as high productivity, scale economies and manageable debt levels would continue to struggle.

Enza chairman Tony Gibbs, of GPG, said Enza believed single-desk selling was "in the best interests of the nation and growers alike."

The review would have a major impact on an industry that was "very fragile," but it was not for Enza to determine the outcome.

"It is for the industry at large. Any changes to the present regime must have the widespread support of the industry - that means growers."