Will steady growth be enough?
13 July 2022
The latest Situation and Outlook for Primary Industries (SOPI) report has horticulture – including wine – growing steadily, with export revenue forecast to increase by two percent to $6.7 billion for the year to 30 June 2022, driven by record harvest volumes for gold kiwifruit and wine grapes.
This steady growth is in the context of the objective to double the farmgate value of horticultural production from $6 billion to $12 billion by 2030 while at the same time, improving grower margins.
Concurrent with the release of the SOPI report, the Ministry for Primary Industries (MPI) also released a progress update on Fit for a Better World, which is a multimillion-dollar programme “for accelerating New Zealand’s food and fibre potential.”
This report shows that MPI and our industry has invested almost $117 million in horticulture industry projects between June 2018 and May 2022. It shows that this level of investment is the highest in the food and fibre sector, with dairy coming next at just over $93 million. Some would see this as a clear signal from the government that it supports seeing more focus on horticultural development to assist in New Zealand’s climate response requirements.
Much of the investment in horticulture to date has been focused on technology such as the robotic asparagus harvester; sustainability through a spray-free future for our apple industry, as well as the A Lighter Touch programme, which will reduce the use of agrichemicals across multiple crops; and diversity, that is, getting a wider range of people to consider careers in horticulture.
In the coming year, investment is expected to focus on improved breeding of cultivars, and rootstock trials for a wide range of fruit and some vegetables; and market access and development, with investment in other years being directed by the Horticulture Action Plan, currently under development.
The Horticulture Action Plan needs to bring everything together and deal to the contradictions that abound within current government policy as it affects the food and fibre sector. On the one hand we have high levels of investment in the future but on the other, we have growers across our industry struggling to survive, thanks to the often complex and contradictory policies and practices that do not support growing and business, in the context of ever rising production costs and drastically reduced margins.
Our industry has been remarkably resilient over the past two Covid-19 affected years. However, it will not be able to reach its potential, the Fit for a Better World targets and the government’s objectives for the food and fibre sector if the government continues to ‘give with one hand and take away with the other.’
At the moment, there are just too many contradictory things going on. The government says the country cannot rely on migrant labour, but it celebrates the lowest unemployment figures in more than 50 years. At the same time, the government introduces an Income Insurance proposal closely followed by the Fair Pay Agreement proposal, both of which Horticulture New Zealand has joined with product groups and organisations such as Business New Zealand to oppose.
At a recent government event, a Minister stood up and said the government ‘can’t fix the labour shortage’ and was leaving the solution to ‘market pressures and responses.’ In normal market conditions, we would turn to migrant labour to assist us in our growth to meet the required government growth targets, which will in turn assist New Zealand in its economic recovery post the past two Covid hampered years.
I have been deeply saddened to hear of an orchard that has been in a family for 108 years being removed because it has just become too tough. Small to medium size operations, be it vegetables or fruit, are under excruciating pressure, financially and emotionally. I have had these growers ask me, ‘is this government not here to fight for me the small to medium operator?’ Again, amidst the contradiction and confusion, I have no answers for these growers at the moment.
A step change is required
In answer to the question I posed at the beginning of this column, no, steady growth will not be enough for us, the horticulture industry, to meet our potential and targets. There are just too many headwinds in today’s world for that to happen.
We need to accelerate growth across our industry in order to take advantage of one of the chief factors we have in our favour. That is, growing worldwide demand for New Zealand produced food and fibre.
New Zealand Inc is a fantastic brand especially right now, in a world far more focused on how things are done, which in our case is how things are grown – sustainably, with respect for the environment, people and the land, from ‘paddock to plate.’
The government must come together and align to support New Zealand Inc and the food and fibre sector’s goals, as outlined in Fit for a Better World. Without that alignment, return on our industry and the government’s investment will just not be as high as it could be, which will be a grave waste of opportunity.