New report highlights risk to vegetable prices from unworkable regulations

A new report by NZIER warns fresh vegetable prices could increase, possibly dramatically, if the Government doesn’t move quickly to provide a clear and workable regulatory pathway for vegetable production.

The report, commissioned by Horticulture New Zealand (HortNZ), gives the example that the price of broccoli could go as high as $27 a kilo, or about $9 a head, if vegetable production is cut by 20% as a result of proposed regulations aimed at reducing nitrogen run-off.

HortNZ commissioned NZIER to consider the regulatory framework required for commercial vegetable production to thrive in New Zealand, given that the Government is rethinking the approach to managing freshwater.

In doing this, NZIER was asked to consider the economic implications of proposed regional regulations.

Chris Nixon of NZIER says the report shows the way the National Policy Statement for Freshwater (NPS-FM) is being interpreted and translated into freshwater regulations by councils could severely impact vegetable production, leading to sharp price increases for consumers.

“Without swift adjustments, key crops like broccoli could become significantly more expensive, underlining the need for targeted reforms that support both environmental, freshwater goals and the affordability of healthy food in New Zealand."

The report draws on research estimating that a 20% reduction in vegetable supply would push vegetable prices up by at least 20% and potentially 100%.

HortNZ general manager of strategy and policy Michelle Sands says to avoid this, the Government must prioritise commercial vegetable growing because the supply of healthy vegetables for New Zealanders should be a national priority and not be put in jeopardy.

“While the Government is moving to change freshwater regulations, we encourage it to move further and faster to safeguard the small but irreplaceable commercial vegetable sector to provide a secure supply of affordable healthy vegetables.”

HortNZ says that the current freshwater regulations and regional council rules are one-size-fits-all and do not reflect the different circumstances of vegetable growing.

It is seeking new national direction to recognise vegetable production is a matter of national importance and to make vegetable production a permitted activity, provided growers meet Freshwater Farm Plan requirements, which include reducing the impact of nitrogen leaching and sediment discharges.

The findings in the NZIER report supports national direction to create workable rules for vegetable production, that do not result in constraining supply.

Ms Sands says growers are already well prepared to meet freshwater farm plan requirements as they have industry certification under the GAP (good agricultural practice) schemes, and most vegetable growers have farm plans using the GAP environmental management system add-on, which addresses water quality.

The approach sought by HortNZ  would provide for water quality improvements across catchments through a balance of reducing nitrogen run-off through regulations and other catchment-wide hydrological interventions such as restoring wetlands to filter out contaminants.

Ms Sands stressed that HortNZ does not want to see freshwater outcomes undermined.

“We seek national freshwater policy and national direction for vegetables that seeks to achieve freshwater outcomes alongside outcomes for national priorities such as enabling the supply of vegetables.  

“It is essential to take a nationally consistent approach because while only some areas have the specific combination of soil, climate and resources that vegetables need to grow; these areas supply the whole country.

“Over 80% of vegetables grown in New Zealand are sold for domestic consumption – we don’t and cannot import enough vegetables to meet New Zealanders’ needs.

“For New Zealanders to have a secure supply of healthy and reasonably priced vegetables, we need fit-for-purpose regulation. Healthy water and access to healthy vegetables are both nationally important and we think achieving them both should be made a priority for New Zealanders.

“We invite New Zealanders to back hard-working local growers delivering a sustainable supply of fresh, high-quality produce by supporting our “taste the yakka” campaign.

Click here to view the report.