Kiwifruit growers hit hard by frost in the past fortnight will get no compensation for at least a year and penalties for their claims could drag out for years, forcing some to consider quitting insurance.
More than 350 claims have been lodged so far with Zespri International from an unknown number of growers hit by two severe spring frosts.
But, with their cover dropping with each successive year of claims, growers are calculating whether the odds stack up.
Growers who have claimed as a result of this year's frosts, would lose cover for almost a third of their crop next year and would have to wait for two successive claim-free years to claw back 100 per cent cover.
Growers who go into next year with 30 per cent of their crop uninsured, might seriously consider going without, said New Zealand Kiwifruit Growers Incorporated president Grant Eynon.
"It gives you no compensation. That makes it very hard."
Under the industry-wide policy against hail, spring frost and volcanic ash, the excess on a 10 ha property following a claim would be 15 per cent - meaning that only 85 per cent of the crop was covered. In the second year, cover dropped to 70 per cent.
Mr Eynon said the frosts, which had hit the early flowering gold kiwifruit much harder than the later flowering green and organic fruit, may also tempt some gold kiwifruit growers to go back to green cultivars.
"People will consider whether their orchards are sustainable for gold," Mr Eynon said.
Orchardists would not be paid out on insurance claims until this time next year, when the full extent of the damage to buds and flowers could be tracked to the harvested crop volumes. Zespri International general counsel David Lazarus warned against abandoning insurance.
For their 5c/tray to 8c/tray premiums, the growers would get back $2 for every tray of lost green kiwifruit and $3 for each tray of lost gold or organic fruit. Although premiums did not drop for growers using frost prevention measures such as sprinklers, fans and helicopters, such measures might pay off in the long run, said Mr Lazarus.
He said that for the insurers, kiwifruit crops were a manageable risk.
"We don't have frosts year after year after year."
The industry-wide deal would break down if too many growers decided to opt out of insuring their crops, said Mr Lazarus.
Zespri executive chairman Doug Voss did not believe growers would be brave enough to quit insurance - "the more they can do to protect themselves, the better it is for them".
- NZPA
Kiwifruit growers hit by frost face insurance dilemma
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