Huakiwi Services have developed Māori land into kiwifruit orchards in areas including Te Kaha. Photo / Supplied
Future kiwifruit Māori land development is under threat as kiwifruit licence costs soar.
Māori already have a 10 per cent stake in the industry but leaders say opportunities will be lost which ''is a shame given there is significant blocks of high-quality under-utilised land still available''.
Zespri confirmed there was a review of the licence release mechanism under way and figures show in 2021 Gold 3 kiwifruit licences have sold under the tender process for on average $550,000 per canopy hectare - $150,000 more than the year before.
Māori Kiwifruit Growers Inc chairman Anaru Timutimu said the price of gold kiwifruit licences had gone "stratospheric" and it was also very difficult to secure a loan on Māori freehold title land.
He said that 20 years ago the price of licences for gold kiwifruit was really low because it was new.
''Now it's gone stratospheric and is pretty high. So that has kinda meant Māori landowners have to opt-out.''
Timutimu said there were other kiwifruit licensing models around the world that would suit Māori better and it was engaging with Zespri about that.
''Kiwifruit orchards are long-term propositions... we are never going to sell the land and if it's doing well we are probably not going to change the operating business on that piece of land.''
Securing finance was another issue.
''It's not just the licences you need for development but there are also the structures and the plants when you are setting up an orchard.
''It's one of the major barriers and is the same for agriculture and farming. So it is a little bit of a rock and a hard place because most of Māori land has no debt on it.''
Making decisions with multiple owners was another obstacle as there was a threshold of 75 per cent for major transactions and finding some of the shareholders could be hard.
Timutimu said he had to ''tip my hat'' to some of the developments that had happened despite that.
Māori orchards created jobs and brought benefits to many communities, he said.
In 2018 Quayside Holdings, the investment arm of the Bay of Plenty Regional Council went into partnership with Te Tumu Paeroa to form Huakiwi Services to develop kiwifruit orchards on land.
Quayside Holdings chief executive and Huakiwi Services chairman Scott Hamilton said eight kiwifruit orchards had been developed on 68ha across the Bay of Plenty, including Matakana Island, Matata, Rangitaiki, Opotiki and Te Kaha.
He said it was looking for a commercial investment opportunity, many of the blocks developed were limited to maize production and owners wanted an opportunity to seek higher-value crops.
At the time, kiwifruit presented a good use of A-grade horticulture, providing strong cash flows for investors and providing a platform for long-term benefit for the land owners, Hamilton said.
''We are happy to say that those early developments are now in production and progressing well against our initial objectives.''
The majority of hectares were gold, but developments also include green and red varieties.
A typical orchard of 10 hectares of a mix of green and gold varieties will produce around $800,000 of cash flows per annum.
''The objective of the investment is that once the investor's capital and interest returns have been paid, the land owners will be in a significantly improved financial position to make real change for their own land and whanau.
''We have seen significant employment opportunities through the development phase, and now even have a team of locals working full time on Matakana Island on Huakiwi orchards.''
However, a key challenge over time had been the continuous rise in the price of licences for high-producing varieties.
''Māori land is not saleable, so as investors, we seek cash flows, not capital gains. A high licence price takes away the opportunity for Māori land development which is a shame given there is significant blocks of high-quality under-utilised land still available.''
Huakiwi continues to work with Zespri for solutions in this space to support future developments, Hamilton said.
Zespri figures show in 2021 Gold 3 kiwifruit licences have sold under the tender process for on average $550,000 per canopy hectare - $150,000 more than the year before.
Zespri chief grower, industry and sustainability officer Carol Ward said a review of the licence release mechanism was under way.
" As part of this, Zespri is consulting with growers to understand their view of the mechanism and the challenges it provides, as well as their ideas on a new model. This includes engagement with Māori, and we recognise the challenges around access to capital faced by owners of Māori land.''
''Zespri is also seeking independent advice on alternative mechanisms which would ensure opportunities for growers as well as reflect the significant investment by existing licence owners. ''
That consultation would feed into any changes to be announced later this year.
Ward said there was more demand for licences than supply and offshore was different.
"Offshore there is not the same demand, so growers pay a higher commission on sales of PVR varieties rather than buying the licence upfront. This helps Zespri fulfil its strategy of providing Zespri Kiwifruit to consumers all 12 months of the year, supporting returns to New Zealand growers.''
Māori were a critical part of the New Zealand kiwifruit industry, she said.
''They represent about 10 per cent of the industry and Zespri is committed to partnering with Māori growers to support their aspirations for their communities.
''We are working with Māori on how we can strengthen our partnership through stronger engagement, building Zespri's own internal cultural competency and delivering stronger results for Māori, alongside the wider kiwifruit industry.''
New Zealand Māori Council former chairman Matthew Tukaki said a large percentage of kiwifruit orchards in the Western and Eastern Bay of Plenty were owned by Māori.
''It's quite incredible. We are not just pickers and workers we are growers and owners. The industry is massive and burgeoning.''
Tukaki said when you unpacked the $4 billion industry it was about employment and the number of other businesses who benefited directly from it.
On Thursday Zespri chief executive Dan Mathieson told NZME that the kiwifruit New Zealand was sending to export markets this year was the worst since some fruit was likened to bland potatoes 20 years ago, and many customers are upset.
In a blunt message to growers and shareholders at the dominant export marketer's annual meeting, the usually upbeat Mathieson said fruit marred by softness, stains and rots had not fulfilled the promise of the brand the industry spent $1.5 billion building.
"Many of our customers are genuinely upset. These are people we've spent decades strengthening relationships with off the back of our ability to deliver consistently great quality fruit.
"The fruit we are sending to market this year is the worst since the quality and taste issues we faced with Hort16A in the early 2000s. That fruit was so bland that the general manager for Asia at the time said he couldn't sell the 'potatoes' we were sending him."
Mathieson reminded the AGM of the chairman's Monday grower notice that this year alone, the quality loss cost was forecast to be $2.80 per tray for SunGold, compared with $1.68 last year. For green Hayward fruit, the quality loss cost was forecast to be $1.95 per tray "and this is in a short supply year".
Earlier in the week a Zespri sector update sent to growers and shareholders by chairman Bruce Cameron said significant quality issues and lower yields meant forecasts had dropped significantly.
"The impact on returns is significant, with the quality cost to growers forecast to be $2.80 per tray for SunGold kiwifruit, compared with $1.68 last year and this has pushed this forecast below the June range," Cameron said.
The forecast impact would see August forecast per hectare returns for green drop to $61,144 compared with the 2021-2022 season March final $75,494.
Per tray, the new August forecast meant green pool growers would receive an indicative $6-$7.50. The final per tray return last season was $6.35.
The SunGold August per hectare forecast was $138,495, compared to the June indicative range forecast of $141,000-$161,000 and last season's final March return of $176,026.
Per tray, the new forecast had SunGold growers receiving $10.02, compared to a final $11.51 per tray in March last year.
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