KEY POINTS:
Organic fruit and veg is considered an environmentally friendly alternative to conventional produce, but the business of taking it mainstream can dull some of its moral edge.
Plastic packaging is required by the supermarkets to track sales, and by the producer to ensure customers know what they are buying is indeed organic.
Purefresh Organic, supplier of 80 per cent of the organic produce sold in New Zealand supermarkets, is introducing biodegradable plastic packaging this week in an attempt to cut down the environmental impact of its otherwise eco-friendly fare.
Anna Aloma, general manager of the Fresh Direct division that celebrated its 10th anniversary last week, said the plastic would break down within 18 months rather than 150 years.
"I hope this will bring us a little bit closer to lowering the environmental impact of our organic product on the supermarket shelves," said Aloma, general manager for eight years.
Although Purefresh had been supplying New Zealand supermarkets for a decade, the segment was still viewed as the "new kid on the block" which faced challenges such as convincing other parts of the organic sector that their product was really the real thing.
She said the commonly cited figure that people were prepared to accept a 20 per cent premium for organic produce was an "urban myth", and that the true figure varied from 10 per cent to over 100 per cent, depending on the product.
Aloma slammed a Europe decision to allow up to 0.9 per cent genetically modified content in organic processed foods such as corn starch and soya products. She expected the rules would be repealed, but acknowledged they might create an opportunity for New Zealand organic producers.
"At the moment we do have a good case to go to these markets - but we hope we can keep it like that.
"If genetically modified crops are allowed into the country it jeopardises the whole organic industry and the conventional industry because it has been clearly signalled by the markets overseas, especially the more affluent ones like the US and Europe, that they are not happy to buy GM products."
CITY VERSUS COUNTRY
The town versus country divide has never been deeper, at least in Newmarket, it seems.
No sooner had Fonterra announced a further lift in the dairy payout last week than outspoken Newmarket Business Association mouthpiece Cameron Brewer was compelled to turn on his roots, waggling his city slicking finger at the "cowcockies" for fuelling inflation ahead of what turned out to be yet another interest rate rise.
Brewer, a former aide to John Banks, Jenny Shipley and Rodney Hide, who confesses to growing up on a Taranaki farm, immediately sought to palm off the Reserve Bank's concerns about consumer spending on the "bovine bonanza" going on in the rural economies.
"Dairy farmers will be in a better position to buy a new Holden, get the kitchen done up, and buy the kids some new stuff," he scolded. "I should know, I grew up on a Taranaki farm."
The voice of Newmarket, "Auckland's leading retail district", said the Auckland shopper was not to blame for fuelling inflation, "yet every time Dr Bollard ratchets up interest rates it is the Auckland home owner who is penalised more than most".
Brewer cited Statistics New Zealand figures for April which he said revealed the "largest monthly decline in overall retail activity since February 2004, with May's figures not much better."
Anecdotal evidence suggested June and July would be being even tougher for Auckland retailers, he warned.
"Rest assured consumer spending does not need to be dampened down in Auckland. This time it's not the Jafas who are dreaming up ways to spend their money, it's their country cousins."
Rates were raised the next day, with dairy warranting another brief shout out from Allan Bollard, not so much for its inflationary influence, but as sign of "solid world demand for our products"which was "very good news for New Zealand," whose economy "is running strong".
Fonterra dairy farmer and Fieldays organiser Lloyd Downing said news the dairy giant's income would rise an average of $480,000 for the past season was misleading. He noted that was a gross figure, more than half of which would go to running the farm before any other spending.
While rural New Zealand is in for a $5.6 billion injection because of raised payouts, Dairy Farmers of New Zealand chairman Frank Brenmuhl says not just dairy farmers would benefit as every on-farm job created four off the farm.
Given that more than half of Fonterra's 17,000 employees toil on home soil, he estimates the amount of money injected directly back into the NZ economy through wages and services is closer to $10 billion of the cooperative's $13.9 billion turnover.
FARM PROFITS HIT
The dollar may be so high even dairy farmers are asking how long their good fortune can last, but for sheep and beef farmers, there's little doubt about the damage they expect to sustain.
Meat and Wool New Zealand chairman Mike Petersen expects losses to average $26,000 for sheep and beef farmers in the 2007-08 season.
"Under the current US79c-80c exchange rate, gross farm revenue decreases 9 per cent to $3.6 billion," he says.
Although Petersen expects offshore lamb, beef and wool prices to increase this year, he believes the high exchange rate will erode them to less than last year's in New Zealand dollar terms.
"This is in contrast to the phenomenally steep rise in global dairy prices where the increase has outpaced the exchange rate increase."
Petersen says every 1c change in the US exchange rate annually would either add or cut $85 million for the meat and wool sector. Combined with higher input prices, he expected farm profits for 2007-08 to halve.
