4.3. Similarities and Differences between Sectors

4.3.1. Technical challenges

The technical challenges faced by the two sectors, kiwifruit and apples, range from those that are shared by both to some very sector specific issues. It is also worth noting that there is a range of views within the sectors. The apple producers felt that due to region specific issues the technical challenges they face differ considerably.

To determine the relative importance of the technical issues growers were asked to rate these issues using the following scale:

Table 4.3.1: Ranking system for constraints

1 = easy to manage using organic technologies

3 = moderately difficult to manage using organic technologies

5 = very difficult to manage using organic technologies

Apple growers showed a high level of consensus in their views of the level of technical constraints. The overall average score of 3.5 equates to the view that technical issues are, on average, slightly more than moderately difficult to manage using organic technologies. Kiwifruit growers, using a slightly different ranking system rated kiwifruit growing a score of 3, that is, moderately difficult to manage using organic technologies. Interestingly, the numbers given in the rankings support the view that kiwifruit are slightly easier to manage under an organic regime than apples. The relative differences between the two sectors for a range of technical issues are depicted in Figure 4.3.1.

The technical issues that both orcharding systems rated as being relatively more difficult under an organic regime are discussed below:

  • Pest management caused difficulties for both apple and kiwifruit growers. Both sectors rely on a limited range of products to achieve the necessary control. Apple growers were not getting sufficient control of leaf roller using the soft products available to them while kiwifruit growers were concerned about the phytotoxic effects of products available to them for scale control. Both sectors raised concerns about their lack of ability to react to any biosecurity incursions if or when they occur. Both sectors rely on the insect disease Bacillius thuringiensis (Bt) to control leaf roller caterpillars. There is a concern that the introduction of genetically engineered crops, incorporating these Bts may hasten the pest caterpillars' development of resistance to Bt, rendering an important organic spray ineffective.
  • The area of soil health and plant nutrition troubled both sectors. The seat of the trouble lies with the general lack of understanding growers and service providers have about the nature of the soil and the interactions between the physical, chemical and biological characteristics of the soil and their management interventions.
  • The manipulation of the plant to achieve reliable yields is more difficult under an organic regime. For apple growers, this requires growers to spend more money on hand thinning whereas kiwifruit growers are unable to ameliorate the impact of low winter chilling and therefore experience lower flower numbers. The reduced management options for organic apple and kiwifruit growers results in, on average, lower yields and smaller fruit size.
  • The majority of the area producing organic apples and kiwifruit has been converted from mature conventional blocks. Both sectors' experience of developing new areas of orchard under an organic regime has raised concerns. For apple growers, this limits their ability to develop new blocks of apple varieties more suited to an organic regime.
  • The level of skills and knowledge required to successfully manage both apples and kiwifruit organically is higher than for a conventional regime.
  • Both sectors noted the relative ease with which they are able to manage their understorey in mature orchards. The observation of this by conventional growers has lead to a reduction in the use of herbicides for conventional control in both apples and kiwifruit.
  • There were a number of issues where significant differences between the sectors were noted. These are discussed below:
  • Disease control for apple growers provides them with their most significant challenge. Disease control for organic kiwifruit growers has not seemed to have been an issue. It appears that organic kiwifruit growers have less fungal problems than conventional growers.
  • The increased need to spray to achieve a level of control over diseases has resulted in an increased use of energy in the apple industry following conversion to organics. Organic kiwifruit growers, however, have a reduced energy use due to the removal of energy intensive hydrogen cyanamide from their programme (Barber and Scarrow, 2001).

Figure 4.3.1: Relative importance of each technical issue for the two orcharding systems. The further the shaded area reaches towards the end of the area, the greater the importance of the issue

 

 

 

 

 

 

 

 

 

 

(a) Apple regional differences

The participants in the apple workshops noted differences in the management of technical issues depending on the region in which they were growing fruit. Interestingly, Hawkes Bay growers, with probably the most experience of organic production, scored higher levels of difficulty than Nelson growers who arguably have the least favourable climate for organics. Blenheim growers, who have a favourable climate and probably the least experience in organic production, ranked technical issues with the lowest level of difficulty. Table 4.3.2 provides their respective scores.

Table 4.3.2: Ranking of the ease of managing technical issues by apple growers from each region

Region

Score
(ranked by decreasing difficulty)

Hawkes Bay

3.8

Nelson

3.4

Blenheim

3.2

Average

3.5

There was a high level of consensus amongst the apple growing regions as to what are the important apple growing technical issues. New plantings, tree nutrition, crop management and pest management were rated with higher levels of difficulty in all regions.

Understorey and soil health were consistently regarded as being easier issues to manage.

Blenheim growers ranked pest issues, in particular leaf roller control, as their most significant technical challenge. HortResearch have noted that leaf roller pressure is greatest in Blenheim. (Organic Pipfruit Growers New Zealand, 2002). The growers felt there was a lack of knowledge on leaf roller predators and habitats.

All regions ranked disease management as a key technical challenge. The negative impact of the current disease management tools (lime sulphur and sulphur) on tree health and productivity is a major concern.

There were different views regarding energy use, soil fertility and skills and knowledge amongst the regions but they were generally rated as being of less concern. The rankings for specific technical issues by region are provided in Table 4.3.3.

Table 4.3.3: Apples: Ratings of technical constraints in each region. Most difficult at top, less difficult down column

(+) denotes a higher ranking than Hawkes Bay and (-) a lower.

Issue

HB
Score

Issue

Nelson
Score

Issue

Blenheim
Score

New plantings

4.7

Disease management

3.9

Pest management

3.9

Tree nutrition

4.3

Crop management

3.8

Skills & knowledge

3.8

Crop management

4.3

New plantings

3.6

Tree nutrition

3.7

Skills & knowledge

4.0

Tree nutrition

3.4

New plantings

3.6

Disease management

4.0

Pest management

3.3

Crop management

3.6

Pest management

3.9

Energy use (+)

3.3

Soil fertility (+)

3.3

Energy use

3.4

Soil fertility

3.3

Disease management (-)

3.3

Understorey

3.1

Soil health

3.3

Understorey

2.9

Soil health

3.1

Skills & knowledge (-)

3.3

Soil health

2.3

Soil fertility

3.0

Understorey

2.8

Energy use

2.2

4.3.2. Infrastructure and industry

With regard to issues of infrastructure and industry, there were a number of similarities between the sectors and few differences. The similarities include market premiums, biosecurity, organic certification, market access and research and development. Differences

between the sectors include the historical context for conversion, location relative to residential properties, the surrounding area, labour availability and premiums during the conversion period. Figure 4.3.2 shows the relative importance of these issues for the two sectors. These are discussed in more detail below.

Similarities

  • Both sectors require a significant market premium to remain profitable following conversion to organics. The increased premium is largely to underpin growers faced with a lower yield under an organic regime. Both the apple and kiwifruit industries have historically had attractive premiums to encourage the conversion to organic production.
  • Vigilance with respect to biosecurity is noted as a priority for both the apple and kiwifruit producers. The concern is that new pests or diseases could create significant difficulties for organic producers who have fewer options for their control.
  • Growers of both apples and kiwifruit were concerned that their certifying organisation had standards that had integrity in all markets. Apple growers also raised their concerns about the potential for food scares in organic food undermining the integrity of the generic organic brand.
  • Both sectors raised the importance of market access. As the majority of the fruit is grown for export markets, growers have to meet strict phytosanitory requirements. For organic kiwifruit growers, the difficulties in gaining access for their fruit into Japan is their single most important issue. Apple growers, on the other hand, raise market access as a potential issue with the prospect of consumers raising the high level of energy used in organic apple production as a non-tariff trade barrier.
  • Growers in both sectors comment on the need for more research and development into organic production systems. The transfer of the technology developed to various parts of the country is also seen as lacking. Growers also comment on the applicability of organic research to conventional systems. Often technology developed for organic producers (e.g. girdling in kiwifruit, understorey management) is adopted by conventional growers. They raise this as an argument for funding more organics research.

Differences

  • The marketing structure for both sectors differs. Apple growers have just moved into a multi-exporter regime whereas kiwifruit is dominated by a single-desk exporter, Zespri, with smaller collaborative marketers. Some collaborative marketers have specifically targeted organic fruit. The multi-exporter regime for apple growers allows for more flexibility with respect to the certifying body growers chose. The marketer may also choose to differentiate transition product and pay growers a premium for this fruit. Kiwifruit growers, on the other hand, are restricted in terms of their certifying organisation and there are no collaborative marketers paying a premium on transition fruit (pers com, Stuart Abbott). There are issues of historical context relevant in terms of infrastructure. Prior to the deregulation of apple marketing, ENZA would permit the export of organic apples outside of the ENZA structure. For many growers, the decision to convert to organics was made to enable growers to operate outside of ENZA. Zespri on the other hand, has been seen as largely supportive of organic production acknowledging the potential for market differentiation. Zespri's policies have reflected this. In earlier years, transition fruit received returns from the organic pool and for a while a premium was paid by Zespri for transition fruit. Transition fruit is now sold in the ZespriTMGreen pool (pers com, Stuart Abbott). Another issue of significance in terms of history was that at one time, growers could begin their three year transition phase after the application of hydrogen cyanamide. This meant that one of the three transition crops was not affected by low yield.
  • Apple growers see residential properties, that is, non-apple growers as a key risk in their management of pests and diseases. They see the potential for these residential properties as being a source of unwanted contamination. Kiwifruit growers on the other hand have seen the proximity to residential properties as a key driver for conversion to organics. Neighbours are less likely to have concerns about the spray drift from organic orchards.
  • Apples are produced on plains areas, often surrounded by other orchards. Kiwifruit is grown mostly on plateaus and terraces in the BOP area surrounded by bush gullies. As a result, kiwifruit is more prone to incursions of pests from the areas of neighbouring bush.
  • There is a contrast in the two sectors with regards to the attractiveness of organic orchards for labour. Kiwifruit growers reported that it was easier for them to obtain labour in their orchards relative to conventional growers. Apple growers experienced strong competition for labour from the grape industry and conventional orchards. That is, staff saw organic apple orchards as less attractive due to the frequent application of smelly, generally unpleasant fungicides.
  • Various marketers of apples may pay growers a premium on their transition fruit as a means of securing supply.

Figure 4.3.2: Relative importance of each infrastructure and industry issue for the two orcharding systems. The further the shaded area reaches towards the end of the area, the greater the importance of the issue.

4.3.3. Financial implications of constraints

The impact of the constraints on the financial performance of both the organic apple and kiwifruit orchard can be significant. For both sectors there were some differences and some similarities in terms of how these constraints may impact on them. These are discussed below.

Market premiums

Both sectors require significant market premiums to underpin their financial performance. In both apple and kiwifruit production, there is a proven reduction in yield under an organic regime. Both systems are also at risk of sustaining large fluctuations in yield due to disease or seasonal conditions. To withstand the financial impact of this over time continued high premiums are required.

Premiums during the conversion phase to organics would help the long-term financial sustainability of organic fruit production. The three-year period that growers experience with no organic premium during conversion has an impact on the relative profitability of organics.

Nutrition management

The long-term impact of running organic nutrition management systems is not fully understood. Low nitrogen inputs may reduce the vigour and overall architecture of both the tree and the vine, reducing its ability to sustain profitable yields. Similarly, the inability to apply volumes of potassium sufficient to match the volume exported from the property in the fruit may run down the potassium reserves of the soil and ultimately the ability of the plant to sustain high yields.

Pest control

For organic kiwifruit growers, the difficulty of supplying pestfree fruit to the Japanese market is the key factor limiting the size of the organic premium. As discussed in section 4.1.1 this problem is currently causing a significant financial drag on the organic pool. Some organic growers have even considered growing their fruit organically, to retain their organic status, but selling it as conventional fruit until this problem is resolved. The possibly unfounded fear being that the organic premium may be negative for a time.

Disease control

The debilitating affect of the fungicides used in organic apple production is a significant concern to the industry. The fear is that the continued use of these products may substantially reduce tree vigour and hence yield to a point where organic production is no longer economic.

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