Growers bear greatest flood cost

By LIAM DANN

While last month's floods mean consumers may pay a few dollars more for some vegetables, the real cost is to the lives of growers, says Vegfed chief executive Peter Silcock.

Vegfed now believes about $30 million worth of crops have been destroyed, with potatoes, peas, onions, squash and pumpkin the worst affected.

Potatoes were hit hardest because only about 15 per cent of the crop had been harvested before the deluge.

Between 20 and 30 per cent of the nation's total potato harvest has been affected and about 20,000 tonnes have been lost.

"Having the water over the top of them means a lot of those tubers will just rot and even if you could get a harvester on them the quality would be very low", said Silcock.

Harvest for the other crops started in January but was meant to go on until next month.

Onions and squash (including pumpkin) are valuable export crops - our fourth and fifth biggest horticultural exports after kiwifruit, apples and wine.

Silcock said even if some of the product was still edible, dirt and water damage would make it undesirable to foreign markets.

"Growers can't afford to market substandard product. Onions and squash are sea-freighted to Asian markets and need to have a long shelf life."

About 500ha of squash - half the flooded region's production area - was ruined, he said.

Most of the region's peas and potatoes were contracted to McCain Foods.

McCain general manager Ian Wilmot said that while about 80 per cent of peas had been harvested, the shortage of potatoes would be a significant cost to the business.

It was difficult to make up supply shortfalls with produce from other regions as most was contracted to other processors, he said.

Flood-affected growers would not be penalised by McCain for failing to meet contracts, he said. The problem was that some might not be able to afford to stay in the industry, meaning long-term supply issues.

Contract growers get no special compensation because of their relationship with processors.

"There are no compulsory insurance clauses," Silcock said.

Crop insurance was very expensive relative to the value and the profit that growers would make on the crops, he said.

"We've got some growers who have lost up to $1 million of product. They invested a lot in these crops and they are not going to be able to sell them. It's a whole year's income."

The future for many was in doubt and would depend on their financial security before the flood.

"Some of them may decide to get out of the industry."

Silcock said the impact on the local market might not be severe, but in terms of the health and growth of the vegetable production industry it was a serious situation.

Between 200 and 300 growers had been affected.

The floods were one big event on top of what was already a very wet period for growers. There was also a lot of wind damage after the flooding subsided.

"When your plant is wet and saturated it becomes very unstable then you get the wind coming in which rips it out of the ground," Silcock said.

The Manawatu-Rangitikei area represents about 15 per cent of national production.

"This is very significant for that area economically, in jobs it creates in services and the processing industry."

There was certainly going to be some impact on consumers but major shortages of product were unlikely, Silcock said.

"It's going to shorten supplies and that will drive up prices, particularly for Wellington," he said. "The rest of industry will make a little bit of money but not a lot."

Counting the cost

* $30 million worth of crops destroyed.

* Flood-damaged regions account for 10 to 15 per cent of national production.

* Potatoes were worst hit: 20,000 tonnes, almost 10 per cent of national crop, have been lost

* Peas, squash and onions also badly damaged but were partially harvested.

* Vegetable exports earned $507 million last year.