Growers want more from their veges

Growers say supermarkets are paying them less but retail prices continue to rise. Picture / Martin Sykes

Vegetable growers are concerned their margins are being squeezed by the supermarket chains, a Ministry of Agriculture and Forestry report says.

The horticulture monitoring report said vegetable growers believed that allowing just two major supermarket chains was detrimental to them. They also felt that the lower prices for fresh fruit and vegetables had not been passed on to consumers.

"Almost universally, growers are experiencing lower domestic wholesale prices while retail prices continue to climb," the Maf report said.

"Growers are cautiously welcoming the introduction of a new supermarket competitor, The Warehouse, as it may mean more competition for vegetable supplies."

The report says Horticulture New Zealand is actively involved in the new NZ Fair Trading Coalition, set up to lobby for law reform in areas where smaller businesses were seemingly at a disadvantage to larger ones.

Maf principal policy adviser Irene Parminter said a possibility raised by growers was law reform letting them collectively negotiate prices without running foul of competition policies.

However, Maf said the report generally painted a more optimistic picture for horticulture than last year, with production and prices up for many of the crops examined.

The report looked at kiwifruit, wine grapes, vegetables, floriculture, summer fruit, subtropicals, export berry fruit and apiculture. It contains projections for "model" operations.

Growers had reported high yields per hectare for many crops after "generally benign" weather over the 2005-06 season and exporters harvesting crops this autumn had reaped the benefits of a lower dollar. But extra fuel and airfreight costs, and labour shortages, continued to be a headache.

Kiwifruit orchards and vineyards were expected to make significant cash surplus gains this year.

After an earnings fall last year, kiwifruit orchardists were expecting higher revenue in 2006-07 because of the lower dollar. Combined with lower spending, this would see a "model" Bay of Plenty orchard's cash surplus rise 136 per cent over last year.

The cash surplus for a model Marlborough vineyard was expected to be $15,000 higher, although it would be down slightly per hectare as expenditure increased amid extra work on young vines. Prospects in Hawkes Bay were also looking brighter.

Vineyards saw benefits in greater industry co-operation on export marketing. Some growers were worried increased production would lower prices and the report says it will be a challenge to market extra production without eroding the "premium" standing of New Zealand wine.

Despite increasing production and reports of a wine glut in Australia, growers remained confident New Zealand wine was "well positioned" for the future.