Overseas money to fund apple and pear research

By SIMON COLLINS, science reporter

New Zealand apple and pear growers have offered to form a joint venture with their overseas competitors to fund HortResearch's apple and pear breeding programme.

The deal, due for approval in principle by HortResearch's board tomorrow, will give the state-owned research company the $1.2 million a year it wants to maintain its world-leading work on new apple and pear varieties - matching an offer from Horticulture Australia last month.

HortResearch chief executive Paul McGilvary said Horticulture Australia and the Australian pipfruit growers would be partners in the joint venture with HortResearch, Pipfruit Growers NZ and its global partner, the Associated International Group of Nurseries.

He said the New Zealand pipfruit industry would have majority control and a majority of the royalties from the use of new varieties.

But it will give overseas growers access to new apples developed in New Zealand, such as Pacific Rose and Jazz - if the board of the new joint venture agrees in each case.

"The joint venture will decide who gets them," McGilvary said.

"The joint venture will be the customer. HortResearch will retain the breeding programme. The new joint venture will commercialise it."

Many details, including exact shareholdings in the new venture, still have to be negotiated.

Pipfruit Growers NZ chairman Phil Alison said "a whole number of balls" were still up in the air.

Both men hope to finalise the deal in time for the start of HortResearch's next financial year on July 1.

The new venture has been forced on both parties by the deregulation of the industry and abolition of the Apple and Pear Marketing Board, which paid $3.5 million a year for the breeding research and development of new varieties until two years ago.

Since then, pipfruit growers have continued to pay around $2 million a year through a levy for "ironing out the bugs" in new varieties.

But they have not paid for the basic breeding research, and said they could not afford the full $1.2 million a year that HortResearch wanted.

As a result, HortResearch was unable to take advantage of a shift in science funding towards industry/research consortiums, which aims to use taxpayer funding to "leverage" increased private sector spending on research and development.

It lost $5.5 million in last year's science funding round and laid off 41 scientists and other staff last July.