Horticulture: growth predictions and constraints

23 Mar 2018

KiwiBanner

This week the Ministry for Primary Industries released its growth predictions. Modest growth is predicted for horticulture (including wine), with kiwifruit and apples predicted to be growth leaders. This comes after two years of exceptional growth: 10% in 2015, and 19.5% in 2016. The Ministry’s predictions may be considered by some in the industry as conservative, due to plantings around the country both underway and planned, and not only with kiwifruit and apples.

The Ministry is doubtless looking at what constrains growth. In the last and current seasons, the cold and wet was followed by hot and dry, in turn followed by heavy rain from cyclones, has hindered production across the country, particularly in the North Island and the top of the South Island. Productivity has been significantly down, and this has been seen by consumers in the increased price for some vegetables due to short supply. Although there appears to be more of these extreme climatic episodes affecting production, the last year and a half has been particularly difficult. A return to more normal weather patterns will see a return to more normal production levels, and higher levels of growth.

There’s not a lot that can be done about the weather other than continue to spread our food production across New Zealand, to allow areas not so adversely affected by weather to make up for the supply deficits from those areas under stress. But there are other constraints, and the one causing the most concern for growers is access to reliable and skilled labour. As New Zealand’s unemployment decreases and New Zealand industries expand, workers have become a scarce resource. For seasonal labour, horticulture has the RSE scheme, but these workers return to the Pacific after they finish work. The real shortage facing us is that of permanent skilled workers. It is not a lack of salary for these workers, as those with the skills get well paid; it is the lack of suitable workers. This is a major issue that we and the Government for all of New Zealand need to address.

The other telling constraint is being able to grow our produce. The expansion of the cities and, in particular, the expansion of lifestyle blocks onto high quality soils, restricts growing operations, and needs to be better controlled and regulated so that we can continue to feed ourselves and maintain our valuable export operations. This comes down to better planning through the Resource Management Act. We are discussing this with Government, and are working on tools to achieve more sustainable results with access to suitable land and water. In addition, there is the cost and time involved with compliance. Here we are focused on working with Government to streamline this, and make it as efficient and cost-effective as possible.

The final constraint, and one the Government is fully committed to, is improving trade access, with reductions in both tariffs and non-tariff barriers. The first priority is to feed New Zealand, but the next is to grow New Zealand’s wealth; this can be done best with exports of our high quality produce. The more markets our produce has access, to without facing crippling tariffs and insidious non-tariff barriers, the greater horticulture’s ability to contribute to the overall wealth of New Zealand becomes. Both the current and previous Governments have made excellent progress here, but this is a process that can never slow or stop.

So although the Ministry’s prediction appear conservative, unless we can manage and over-come the current constraints, they may prove to be all too accurate.

- Mike Chapman, CEO