5. Conclusions
This study identifies and discusses the main behind-the-orchard-gate constraints to conversion to organic apple and kiwifruit production. The report also comments on the financial implications of these by comparing organic production to the respective MAF horticultural monitoring Mmdels. A discussion of the implications for widespread adoption of organic apple and kiwifruit production and a comparison with a similar report written on the main agricultural systems (dairy, sheep and beef, deer and arable) is included.
The key technical constraints that organic apple and kiwifruit growers had in common were their lack of ability to manipulate their trees or vines to secure reliable yields of good size fruit, the management of pests, nutrition management and establishing new areas of orchard under an organic regime.
The most significant technical constraint for apple growers is the management of disease. Losses to the fungal disease Black Spot can result in significant yield reductions and the products used to control the disease have a debilitating affect on apple trees. Kiwifruit growers do not experience problems with disease management to any significant extent.
Generally, growers believed it was more difficult to grow organic apples and kiwifruit when compared with the conventional crops, and that organic apples are more difficult to produce than organic kiwifruit.
The key infrastructure and industry constraint for both the apple and kiwifruit growers relates to the continued ability to extract an organic premium from the market. The loss of this market premium would severely undermine the profitability of these two organic industries relative to their conventional counterparts. Other issues were different for the two industries. Kiwifruit growers raised concerns regarding market access and their income during the conversion period. Apple growers on the other hand raised issues of institutional support and skills and knowledge, including research and development.
Financial analysis shows that organic kiwifruit production, given current yield, price and cost parameters are not as profitable as conventional kiwifruit production. The market premiums for kiwifruit are not sufficient for organic growers to be fully compensated for their reduction in yield. The cash orchard surplus for organic kiwifruit growers is $15,589 (18 percent) less than the MAF BOP kiwifruit model.
Organic apple production is considerably more profitable than conventional production given current yield, price and cost parameters. The cash orchard surplus for organic production in the Hawkes Bay is almost twice that of the MAF Hawkes Bay pipfruit model. Organic production in the Nelson area is less profitable due to lower yields as a result of less suitable varieties and more disease losses.
Both apple growers and kiwifruit growers commented on significant gaps in knowledge about organic production systems. Of interest was the comment that funding organics research often has benefits for conventional growers as technologies developed are adopted on an industry-wide basis and are not exclusive to organic growers.
The most significant impact that a widespread adoption of organic production technologies would have would be the change in demand for some products and services. Post harvest providers would have a reduced volume of fruit to handle. The marketers of fruit would have to generate a bigger market for the organic fruit in order to sustain current premiums. Widespread adoption of organic apple production would very likely lead to the productive potential of apple orchards becoming run down.
As discussed in the pastoral report (MAF, 2002a) organic producers all anticipate a reduction in yield under an organic regime. To compensate for this reduction in yield all farming and orcharding systems studied in this and the pastoral report require premiums ranging from 2 percent in dairying to 44 percent in arable to remain profitable relative to their conventional counterparts under an organic regime. Only the kiwifruit industry anticipates modest increased cost as a result of the conversion to organic kiwifruit.
The financial impacts of conversion to organic kiwifruit and apples fit within the range expected by the agricultural sectors.
Contact for Enquiries
Kay Brown
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0695
Fax: +64 4 4 894 0746
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