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Part 3: Exporting of Organic Producefrom Gisborne District

RECENT DEVELOPMENTS INORGANIC FOOD PRODUCTION

IN NEW ZEALAND:

BRAD COOMBES

HUGH CAMPBELL

JOHN FAIRWEATHER

Studies in Rural SustainabilityResearch Report No. 4

Department of Anthropology,University of Otago

May 1998

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Published byDepartment of Anthropology,University of Otago,P.O. Box 56,Dunedin, New Zealand.1998

Phone 03 479 8751. Fax 03 479 9095.Email: anthropology@otago.ac.nz

ISBN 0-9582015-0-1

Studies in Rural SustainabilityResearch reports1. Recent Developments in Organic Food Production in

New Zealand: Part 1, Organic food exporting inCanterbury. H. Campbell 1996

2. Recent Developments in Organic Food Production inNew Zealand: Part 2, Kiwifruit in the Bay of Plenty.H. Campbell, J. Fairweather & D. Steven 1997

3. Men and Women as Stakeholders in the Initiationand Implementation of Sustainable Farm Practices:Organic Farming in Canterbury. R. Liepins & H.Campbell 1997

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ContentsAcknowledgements ................................................ ivAuthors ..................................................................... ivExecutive Summary ................................................. v

Chapter 1. Introduction ........................................... 11.1 Research objectives ............................................. 11.2 Site selection: the choice of GisborneDistrict ......................................................................... 21.3 Research Process .................................................. 3

Chapter 2. Contexts for horticulturalproduction in Gisborne District ............................ 42.1 Physical features .................................................. 42.2 Social and cultural features ............................... 52.3 Restructuring of agriculture andhorticulture ................................................................. 6

Chapter 3. Initial development of organichorticulture in Gisborne District .......................... 83.1 The structural position of Heinz-Wattie Ltd. in the early 1990s .................................. 83.2 The HWL strategy for convertingsweet corn growers to organic production ......... 103.3 The development of organic methodsfor sweet corn production ..................................... 153.4 The relationship between local and exportorganic industries .................................................... 18

Chapter 4. Emerging issues .................................. 204.1 Complementary and competing firms:the impact of an increasing range ofcompanies involved in organic exporting ........... 204.2 Grower concerns relating to Gisborne’sorganic industry ...................................................... 264.3 Emergent organic industries in GisborneDistrict ....................................................................... 324.4 Impediments to the expansion of organicproduction in Gisborne District ............................ 37

Chapter 5. Grower decision making inGisborne District .................................................... 395.1 Existing Decision Tree Applied toGisborne District ...................................................... 395.2 Discussion of Decision Making ....................... 42

Chapter 6. Conclusion: the evolution ofGisborne’s organic industry ................................. 446.1 Key issues specific to Gisborne ....................... 446.2 Wider issues relevant to the organicindustry in New Zealand ....................................... 45

References ................................................................ 47

Appendix: Methods for understandinggrower decision making ....................................... 48

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Acknowledgements

This report forms part of the findings of aFoundation for Research Science andTechnology (Public Good Science Fund)

funded programme entitled ‘Optimum Develop-ment of Certified Organic Horticulture in NewZealand’. The authors would like to gratefullyacknowledge the importance of this funding in thesuccess of this research programme.

We would also like to acknowledge the contri-bution of Heinz-Wattie Ltd. for their cooperationwith our research activities. In particular, wewould like to acknowledge our debt to StuartDavis and Bruce Snowdon who contributed aconsiderable amount of time in assisting with thepreparation of a final draft of this report, andGrant MacDonald who provided assistance inconducting fieldwork in Gisborne. We would alsolike to thank the many growers and other industryparticipants who cooperated with our researchactivities.

Finally, we would like to thank Martin Fisherfor his usual excellent standard of formatting andpresentation of the final report.

While acknowledging the contribution ofthese individuals and organisations, the finalcontent of the report remains, as always, theresponsibility of the authors.

AuthorsDr Brad Coombes was a Junior Research

Fellow on the PGSF programme ‘Optimum Devel-opment of Certified Organic Horticulture in NewZealand’. His Ph.D thesis in Geography examinedissues of rural economic development on the EastCoast and Catlins Coast. His current publicationsprovide a critical examination of the politicaleconomy of sustainable development. Dr HughCampbell is based in the Department of Anthro-pology, Otago University, and is the leader of thePGSF funded research programme. He has ongo-ing research interests in the development ofalternative agriculture and low-input systems offood production. Dr John Fairweather is a SeniorResearch Sociologist at the Agribusiness andEconomics Research Unit, Lincoln University. Heis involved in a wide range of research activitiesinvestigating social and economic change in ruralNew Zealand.

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Executive Summary

Despite an almost non-existent base prior to1990, Gisborne District has experienced avery rapid uptake of organic production.

The key growth area has been organic sweet cornproduction fostered by Heinz-Wattie Ltd. Thevast majority of organic products - by volume andvalue - are destined for export markets.

The rapid uptake of organics in GisborneDistrict has been influenced by the following localfactors:

• Local sweet corn growers display a distinctivelyautonomous psyche towards organics (whichmay be related to the relative economic andspatial isolation of the district as well as a rangeof social problems which has reduced percep-tual barriers to new economic forms);

• Broader agricultural restructuring in the Districthas seen increased land areas devoted tohorticultural production and a move from bulk-commodity to niche production.

Heinz-Wattie Ltd. (HWL) have been prominentin developing organic exporting. The followingfactors are of significance:

• Organic sweet corn was essential to the market-ing strategy of HWL in Japan, and GisborneDistrict provided the most likely source of thisproduct;

• HWL has been the only significant organisationengaging in technology transfer with newlyconverted organic growers;

• In the last two seasons, some HWL sweet corngrowers have employed a full organic rotationin high value export crops using sweet corn,peas, and squash as well as green-manure cropsgrown over the winter. This rotation, onceestablished, represents an important develop-ment in the context of the entire New Zealandorganic industry where broadacre rotations ofhigh value organic crops have - to date - proveddifficult to establish.

The longer-term survival of organic produc-tion in Gisborne – which now appears to berelatively assured – is dependent on local diversifi-cation in terms of organic crops and fosteringsynergies among a variety of organic processingfirms. Diversification has had the followingeffects:

• It has provided the elements for a successfulrotation in organic crops;

• It created useful synergies between organicprocessors/exporters - as evidenced by coop-eration between squash exporters and HWL;

• It has led to an increasing range of purchasers oforganic products which has reassured manyconventional growers considering conversionto organic production;

• It has, however, led to the potential for competi-tion between purchasers of organic products,especially sweet corn. This raises seriousquestions about the current structure of tech-nology transfer and skills development amongorganic growers. It also has undermined someof the trust in the generally successful relation-ship established between HWL and some of itsearly organic growers.

• Further to this, there is also an emerging compe-tition over what constitutes a legitimate organiccertification process. Gisborne District is onesite where firm-specific standards for ‘organic’production are being developed and inspectedby MAF Qual. This has the potential to under-mine some significant and beneficial aspects ofthe current structure of organic certification asprovided by BIO-GRO NZ.

A distinctive feature of land-use in GisborneDistrict is the amount of land in multiple-owner-ship and managed by Maori resource incorpora-tions/trusts. Despite considerable attention oflocal Maori to organic production, few suchincorporations/trusts have become involved inorganic production:

• Several Maori properties appear suited toorganic production: local Maori perceiveorganics as suited to the communal ownershipof land and many properties have had lowlevels of applied agrichemicals, so they couldbe quickly moved through the BIO-GRO NZcertification procedures;

• However, key structural impediments to Maoridevelopment, especially the issues of leasing,and raising development capital for, communalland will need to be resolved for future devel-opment of organic production in the region.

The most significant factor in determining thecharacteristics of organic production in Gisbornehas been its terra nullius status in terms of organicproduction at the start of the decade:

• Unlike other regions, Gisborne District did nothave significant levels of debate and interactionbetween long-term organic producers andnewly converted export growers;

• This is reflected in a more ‘pragmatic’ approachto organic production by many new growers inGisborne District compared to other regions;

• Such pragmatism is indicated by the heighteneddegree to which some sweet corn growers wereattracted to organic production by premiumsand have stayed in organic production prima-

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rily to achieve these premiums. While the sameGrow Organics With Watties promotionalmaterial was used in both Canterbury andGisborne, some Gisborne growers took some-what different messages from this material thantheir counterparts in Canterbury;

• Furthermore, some highly pragmatic sweet corngrowers will, in the next few years, probablycome into conflict with the BIO-GRO inspector-ate over issues of soil fertility and fallowing;

• All the study regions had newly convertedgrowers who were initially only interested inpremiums but then experienced a ‘progressiveconversion’ to the wider aims of the organicmovement. However, in Gisborne District, theextent of ‘progressive conversion’ seems sloweramong some prominent sweet corn growers, asituation that is exacerbated by their disinterestin the local organisation for organic producers.

Five challenges will need to be faced in thefuture, if the high rate of organic development inGisborne District is to be maintained.

1) Skills and technology transfer: a significantneed for a local grower organisation commited todeveloping skills and knowledge among growers.All firms engaged in organic exporting should beinvesting in technology transfer, while the stateshould also be a provider of research and educa-tion in organic production.

2) Synergies not competition: synergisticdevelopment with companies cooperating toservice different elements of a full organic rotationis clearly more suitable to organic production thanoutright competition. Again, grower pragmatismand the commitment to maintaining premiums isleading some growers to seek to strengthen theirposition vis-a-vis processors by encouragingcompetition for single crops within their overallrotation rather than finding strength throughdeveloping a full rotation.

3) Resolution of leasing and overcomingbarriers to Maori development: current strategiesfor incorporating Maori land into organic develop-ment have emphasised leasing arrangements.These are undesirable in the long term as a form oforganic production and can only be viewedfavourably as a ‘stepping stone’ to independentorganic production by Maori incorporations.

4) Soil fertility and encouragement of ‘pro-gressive conversion’ of pragmatic sweet corngrowers: some growers will have difficulty main-taining their organic status unless they adopt aless pragmatic attitude to production and begin toaddress issues of long-term soil fertility.

5) Maintenance of integrity of organic stand-ards: as a region which lacks any long termorganic history, Gisborne is potentially susceptibleto activities which might undermine or ‘waterdown’ established notions of what constitutesorganic production. MAF Regulatory Authorityneeds to give clear direction to exporting compa-nies by recognising a national standard for organicproduction.

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Chapter 1

Introduction

This report is the third in a series of four casestudies on the evolution of organic produc-tion in key regional areas of New Zealand.

The other three case studies are Canterbury(Campbell 1996), Bay of Plenty (Campbell et al.1997) and Nelson (to be completed in mid 1998).The four reports are the main outputs for theresearch program ‘Optimum Development ofCertified Organic Horticulture in New Zealand’,funded by the Public Good Science Fund. Thecurrent report presents the findings of researchinto the development of organic production inGisborne District1 (see Figure 1.1). Although thesefindings are significant and stand in their ownright as suitable for individual publication, somecomparisons are made in the text between theevolution of organics in Gisborne and the develop-ment of organics in Canterbury and Bay of Plenty.This mainly involves comparisons betweenGisborne and Canterbury, because organic cropsand an individual company – Heinz-Wattie Ltd.2 –have been prominent in both areas. This enablesthe Gisborne case study to be more fully under-stood. Nevertheless, extensive comparisons arenot made in this report: they have been set asidefor a future publication to be completed after theNelson report.

1.1 Research objectivesSince 1990, organic production has increased

markedly in New Zealand, with a considerablechange in emphasis in terms of the target con-sumer. During the 1970s and 1980s, productionwas largely in the informal sector – with a focuson self-provision and bartering – or in semi-commercial sectors, with local growers supplyinglocal buyers or cooperatives. The domestic marketconsumed almost all organic produce. Organicproduction was part of a philosophical stance: adirect critique of intensive methods of food pro-duction which had emerged after WWII. Theorganic movement sought to retain the historicalnecessity for food production to cooperate withnatural systems as the basis for sustainability. BIO-GRO NZ – the organisation which formed in 1983as an umbrella group for the various actors withinthe organic agriculture movement – has become

the certifying agency of choice in recent times.However, the 1990s have seen a considerablechange which, through the establishment of aburgeoning export industry for organic food, hasattracted a number of new organic growers. It hasalso challenged the established organic agriculturemovement in terms of its philosophical orienta-tion and infrastructural ability to certify the largenumbers of new producers.

In the Canterbury and Bay of Plenty studies, itwas found that many growers who formerlyproduced under conventional systems convertedto organic production for a variety of reasons, allrelating to the increasing number of contradic-tions arising in their conventional productionsystems. The four most prominent reasons were:health concerns attributed to high agrichemicaluse; the attraction of premiums for organic versusconventional products; concerns over high pro-duction costs of chemical usage; and concern overthe long-term viability and sustainability ofconventional systems and products. Many in theorganic agriculture movement have also changedtheir orientation towards the commercial potentialof the industry and are now interested in makingorganics both commercially viable and a success-ful export industry. Others saw such changes asunacceptable or too costly for small growers anddisassociated themselves from BIO-GRO NZ.

There are many potential issues of interestwhich emanate from this growing commercialisa-tion and export-orientation of organic productionin New Zealand:

• What are the impediments which preventconventional growers from converting toorganic production?

• What regional and sectoral differences exist inthe growing New Zealand organics industry?

• Will suitable methods, structures for certifica-tion and technology evolve which allow for thesuccessful commercialisation of organics yetwill also maintain appropriate organic stand-ards?

• Which companies are becoming involved inorganic production, for what reasons and howdo they incorporate organics within theirproduction, distribution and marketing divi-sions?

• What direction is the structure of the organicindustry presently taking and what is an

1 At various points in the text the phrase ‘East Coast’ is also used. More specifically, the study areaencapsulates the Poverty Bay/Waipaoa flats, on which is Gisborne City itself, and the horticultural land nearWhangara and Tolaga Bay. The Maori term ‘Tairawhiti’ covers a similar area to the Gisborne District. Also notethat Gisborne District is one of the few unitary authorities in New Zealand. Hence, there is no Regional Council ofwhich Gisborne District is a part.

2 Henceforth, HWL. During much of the period under discussion this company was called Wattie FrozenFoods Ltd., which was absorbed as an operating division of the Heinz group in 1992. This division ceased to havean independent name when Heinz-Wattie Ltd. was restructured in 1996. To avoid confusion over the changingname of the division, reference will only be made to Heinz-Wattie Ltd for the entire period.

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appropriate industry structure that could fosterorganic production?

• Can the export/commercial and domestic/philosophical components of the organicindustry evolve in parallel without the formerdominating the latter?

These are just a few of the issues which formthe research objectives of the present series ofreports. More detail on these objectives can beobtained from Report No. 1 (Campbell 1996).

1.2 Site selection: the choice ofGisborne District

It has already been suggested that there aresimilarities between organic production inGisborne and Canterbury, especially the role ofboth organic cropping and HWL. However, thereare two factors which make the Gisborne case

study different from the other field areas studiedin this series of reports:

Ethnic composition – Gisborne District has aparticularly high percentage of Maori in its popu-lation. Therefore, it was selected to test whethercultural factors can influence the growth of organ-ics. This is particularly important in relation tocurrent patterns of Maori land ownership.

A unique history of organics – Unlike Canter-bury, Bay of Plenty and Nelson, there was almostno evidence of a domestic organic industry beforethe rapid growth of export-oriented organicproduction and the involvement of large compa-nies. The lack of industry pioneers has stronglyinfluenced the style of development that has takenplace in Gisborne District, and has had importanteffects on the relations among growers, the indus-try as a whole and BIO-GRO NZ.

Despite the lack of a domestic industry, or-ganic production has grown markedly in Gisborne

Figure 1.1: Eastland, including Gisborne District study area.

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during recent years, with most of this expansionwithin the sphere of organic cropping. In the1996/97 season, HWL’s Gisborne suppliers grewabout 2000t of organic sweet corn (Zea mays) andorganic peas (Pisum sativum), and five othercompanies exported a total of 650t of squash(Cucurbita spp., usually C. maxima). In recent years,organic fruit production has increased and recentconversions of orchardists mean that this growthwill continue. Organic persimmons (Diospyroskaki) and organic wine are the main contributors tothat increase. Experimentation on mixed proper-ties with a full rotation of organic crops involvingsweet corn, squash, peas, and green-manure cropsgrown over the winter is particularly significant.This development places Gisborne ahead ofcomparable regions like Canterbury which havenot yet been able to achieve a full rotation in high-value organic crops and stock. Some stakeholdersin Gisborne’s organic industry are confidentlypredicting that the adoption of a full rotation willlead to sustained expansion of the local industry,establishing Gisborne as New Zealand’s premierorganic growing region.

1.3 Research ProcessAs was the case in the two reports published

thus far in the current series, there were two mainresearch methods employed in this study.

Strategic Interviewing – In August of 1997, aninterview program was conducted with 25 partici-pants who have a stakeholding in the local organ-ics industry. These interviews were ‘interactive’ inthe sense that the form of interviewing was notthe set-survey method. Rather, each intervieweewas given as much room as possible to direct thestructure of their interview. The composition ofmembers in this interview program is presented inTable 1.1:

Ethnographic Decision Tree Modelling – Decisionmaking of growers was assessed by interviewing

27 people. The criteria used by these growers inmaking decisions about organic production wereidentified and used to assess the relevance of thedecision tree derived from the earlier Canterburystudy.

Position of interviewee in organics industry Interview No.

Export/processing company managers and marketers 1, 2, 3, 4 and 5

Agronomists and other advisers 6, 7, 8 and 9

Managers of low-input and/or fruit production initiatives 10 and 11

Stakeholders in the (domestic) organic food movement 12, 13 and 14

Organic viticulturists 15 and 16

Organic crop (pea, sweetcorn, squash) growers 17, 18, 19, 20, 21 and 22

Organic deer farmers (both formerly organic crop growers) 23 and 24

BIO-GRO NZ representative 25

Table 1.1: Participants in the strategic interviews.

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Chapter 2

Contexts for horticulturalproduction in GisborneDistrict

It will be shown in Chapter 3 that many of theforces which led to Gisborne becoming asignificant region for organic production in

New Zealand had their origin outside of theDistrict. However, there are a number of internalfeatures which have helped to accelerate thedevelopment of organics in the region and haveled to the success of organic producers. Severalchange dynamics have recently encouraged movesinto niche production by primary producers. Thegrowth in organic production is related to thisbroader trend. Three key topics will be examined:

• The growing conditions in the area, which areappropriate for organic horticulture;

• The social situation of Gisborne District, whichhas made people in the area sensitive to theneed for economic diversity and new economicprojects;

• The changing relationship between agricultureand horticulture, which has led to the recentand rapid uptake of niche horticultural produc-tion.

This brief account will draw extensively onresearch previously conducted by one of thepresent report’s authors (Coombes 1997). Thatresearch also examined the social, physical andsectoral changes in the District which have en-couraged its people to search for new economicalternatives.

2.1 Physical featuresThe first aspect of the physical geography of

the area which has encouraged the growth ofniche production relates to the effects of spatialisolation. Gisborne was one of the more difficultfrontiers in New Zealand for European settlers toestablish themselves as small producers (Oliver &Thompson 1971). To the north and west ofGisborne City, the Huirau and Raukumara Rangesrestricted travel and trade with the northern citesof Auckland and Hamilton (see Figure 1.1). To thesouth, the rugged terrain through which theMohaka river flows restricted access to Napierand Wellington. After the establishment ofGisborne City, interaction between the area andthe rest of the country was mainly through PortGisborne which was both shallow and based onan unreliable slipway from the Turanganui River,so even coastal trade proved difficult. Further

north along the East Coast, travel was particularlydifficult and until the 1920s no proper road hadbeen formed and towns such as Tolaga Bay,Ruatoria and Hicks Bay were connected by acoastal horse trail. Today, sealed roads haveimproved access to the District, but travel times tothe area remain relatively high. Gisborne is one ofthe most expensive cities to fly to in New Zealand,and negligible air freight arrives at GisborneAirport.

There are both negative and positive effects ofthis isolation. Because they are not on high-volume routes, primary producers face highercosts in terms of transporting their produce tonational and international markets. This hasmeant that agriculture and horticulture inGisborne District have always been more marginalthan in other areas of the country. One of thepositive aspects of this isolation is that a constantfear brought about by the marginal nature ofprimary production on the East Coast has madesome of its people reasonably progressive in termsof adopting new production forms and new crops(Interviews 1, 2, 3, 6, 8, 23). This tendency towardsadaptation has meant that the typical fears aboutorganic production are, to some degree, negated.Furthermore, there is considerable potential tomarket isolation as a component of the organicimage. With respect to New Zealand’s position inglobal trade, HWL recognised the wider potentialof such isolation when it began experimentingwith organic production in the early 1990s. Afterthe takeover of that company by H.J. Heinz Co.,this strategic potential was further reinforced byTony O’Reilly (the CEO of H.J. Heinz Co.) whosuggested that relative isolation from the environ-mental problems of the northern hemispherepresented New Zealand with the ability to marketitself as a ‘green’ country producing healthy food.

While the early initiatives were based aroundHWL, members of the wider organic agriculturemovement also lend support to the idea thatGisborne is ideally suited for organic production.Bob Crowder – an important figure in the NewZealand organic industry – met with Gisbornepeople interested in organics during 1993 andsuggested that:

“Gisborne’s pastoral and croppingindustries have a wonderful chance to turn theDistrict’s isolation into an asset and build anenvironment based on balanced organicprinciples” (quoted in Scott 1993: 9).

During his 1993 visit, Crowder also noted thatthe region’s growing conditions were particularlysuitable for producing organic food (ibid.). Ingeneral, the District suffers from soil erosion, butthis problem is largely confined to the hill country.Large areas of flat land also exist, especially on thePoverty Bay/Waipaoa flats and to a lesser extent

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on the Uawa River flat at Tolaga Bay and theWaiau River Valley near Ruatoria. These consist ofgood quality soils, with a mix of yellow-brownloams and rich alluvial deposits. The quality of thesoil is such that out of the 20,200ha of flat land onthe Gisborne plains, 17,000ha can be used forhorticulture (MAF 1968), the most resource inten-sive form of primary production. The climate ofthe area is particularly suited to horticulturalproduction. The mean annual temperature –14.5oC – is one of the highest for all districts inNew Zealand which combines with a high aver-age for annual sunshine hours to create favourablegrowing conditions (Hessel 1981:12). The combi-nation of high average temperature and a longgrowing season means that the Gisborne District,and especially the area towards East Cape, is wellsuited to the growing of semi-tropical and eventropical fruits. It also means that it is one of thebest suited areas in New Zealand for sweet cornproduction. Average rainfall is a moderate1200mm per annum. In areas where there is a highamount of rainfall, organic production can bemore difficult, because these conditions can favourthe growth of weeds.

However, there is one climatic factor whichnegatively affects all forms of primary productionon the East Coast. The area is particularly suscep-tible to cyclones and one such event – CycloneBola which occurred in 1988 – persisted for fourdays and led to millions of dollars of crop andstock losses. Given the rugged and deforestednature of the surrounding hill country, soil erosionis now recognised as the region’s primary hazard,especially during abnormal cyclonic events, and isa serious threat to the long-term sustainability ofagriculture and horticulture. After 1988, manypastoral farmers abandoned their hill-countryland to the East Coast Forestry Project (seeBlaschke & Peterson 1994) and other commercialforestry programs. Some farmers have diversifiedtheir existing, low-country land to other, moreintensive uses, such as horticulture, in order tomake up for this loss of revenue. Consequently,this new phase of on-farm diversification hascontributed to a recent increase in the extent ofhorticultural activity in the District.

2.2 Social and cultural featuresDuring 1997, a number of high-profile reports

on the effects of poverty in Gisborne District wereprominent in the national media. Inadequatehousing, poor access to health resources and theineffectiveness of local education systems receivedconsiderable attention, and all are symptomatic ofthe wider effects of poverty. The District’s unem-ployment level has typically been the highest in

the country, with nearly 15% actively seekingwork (NZ Census of Population and Dwellings1991 – Gisborne/Hawke’s Bay Regional Re-port:11). In some towns, such as Ruatoria, theMaori unemployment level is over 70% (ibid.). Atthe governmental, Runanga3 and District Councillevel, considerable attention has been given tonew employment schemes for the area. In general,the unemployment problems are so significantthat there is strong support shown when investorsdesire to establish a new type of production on theEast Coast (Interview 9). As is the case with spatialisolation, a negative factor such as high unem-ployment can lead to adaptive attitudes.

Gisborne District, along with Northland, isone of only two areas in the country where Maoriregularly comprise over 50% of the population incensus meshblocks. The official proportion ofMaori in the Gisborne District population is 40%(NZ Census of Population and Dwellings 1991 –Gisborne/Hawke’s Bay Regional Report:27), butwith informal housing arrangements and the factthat many Maori on the East Coast attempt andsucceed in avoiding the census (see Coombes1997), that figure may well be an underestimate.In several of the towns along the East Coast,Maori represent over three quarters of the popula-tion (NZ Census of Population and Dwellings1991—Gisborne/Hawke’s Bay Regional Re-port:26-27). Maori have a considerable history ofhorticulture in the area. Captain Cook, on visitingAnaura Bay, was surprised by the techniques andtechnology that were employed by Maori in theirgardens, as he was by the quality and quantity ofthe produce.

In more recent times, Ngati Porou – the pre-dominant iwi – have attempted to renew theirinterest in horticulture. Considerable resourcesand land have been returned to local iwi in the1980s and 1990s as part of successive govern-ments’ attempts to meet their obligations underthe Treaty of Waitangi. Large areas of land havealso recently come out of long-term leases whichalienated Ngati Porou from their land. Increasedflexibility in how those resources are used hasbeen granted by the Te Ture Whenua Maori Act(1993) and, utilising this flexibility, many landincorporations attempt to diversify their pastoralholdings. Some have entered wine, kiwifruit(Actinidia deliciosa) and fresh-market vegetableproduction. In the research for Coombes (1997), itwas found that many local kaumatua were anx-ious to see the re-establishment of communally-based but commercially-oriented gardens bothbecause of a ‘sustainability’ ethic and as part ofemployment initiatives. Notably, several of theseleaders commented on the success of one large

3 Referring to Te Runanga o Ngati Porou, and Te Runanga o Turanganui a Kiwa – the councils of the two majoriwi in the District.

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organic farm4, and stated that they wanted tofollow this lead because it was seen to be particu-larly appropriate for the nature of their land, andthe composition of their hapu.

During the 1990s, Maori have returned to theirGisborne turangawaewae in considerable num-bers (Butterworth 1991), but they are not the onlygroup to migrate there in recent times. The migra-tion of ‘lifestylers’ to the region is a strong dy-namic for economic change in Gisborne District(Coombes 1997). Public perception of this group isthat they are generally uninterested in pursuingemployment. However, not all lifestylers move tothe East Coast for recreational pursuits and manyarrive with considerable assets. The East Coast is agrowing destination for international tourists.Many such tourists have decided to emigrate onthe basis of their holiday experiences, and severalhave already become involved in such ‘alterna-tive’ economic practices in Gisborne as ecotourismand ‘health’ industries. In the other reports in thisseries, migrants from Europe and ex-urbanlifestylers were shown to have had an importantrole in the evolution of organic production. Al-though there is less evidence for such a role inGisborne District5, there is a some potential forfuture involvement by this group in the Gisborneorganic industry if their numbers continue toincrease.

2.3 Restructuring of agricultureand horticulture

The first European settlers of the Gisbornearea believed that the district was most suited topastoral forms of agriculture. For over one hun-dred years, extensive sheep farming was the maineconomic activity on the East Coast and a numberof large pastoral estates developed. Likewise,Maori land incorporations also tended to conformto this faith in large-scale pastoral agriculture.Apirana Ngata introduced a series of Maori landreforms in the 1930s which were adopted on anational basis, but the degree of amalgamationand centralisation of Maori land was greatestamongst his own iwi of Ngati Porou. The successof this economic form was dependent on thecontinuation of coastal shipping around the EastCoast. Large wharves were built at Tolaga Bay,Waima at Tokomaru Bay, Waipiro Bay and HicksBay, and with each was associated a relativelysmall freezing works. During the inter-war period,this proved successful but, with the decline ofcoastal shipping, all of these freezing works hadclosed by the 1950s. Even though the Kaiti freez-ing works in Gisborne City expanded to replacethe smaller freezing works, these infrastructural

changes threatened the long-term viability ofpastoral agriculture. By the late 1970s and early1980s, it was recognised that pastoral agriculturewas considerably more marginal in GisborneDistrict than elsewhere, and it was accepted thatits extent was upheld mainly by state subsidies,especially supplementary minimum prices(SMPs). When SMPs were removed, stock num-bers reduced rapidly through the 1980s and theKaiti freezing works suffered from serious levelsof under-capacity. With the post-Bola move toforestry, this problem worsened and, in 1994, theKaiti works closed.

Although the closure had a considerableimpact on the collective psyche of the region, themove was simply the climax of a more long-termshift away from pastoral agriculture. In its place,horticulture has become more prominent. Cropproduction, especially for tomatoes, grew rapidlyin the 1950s when J. Wattie Canneries Ltd. estab-lished a cannery in Gisborne City. Pea, bean andsweet corn production further expanded whenWatties added a freezing operation to theirGisborne plant in the 1960s. Fruit, especiallystonefruit and citrus, were processed for a periodof time, and lower quality maize – used mainly asa stock feed – has been significant since the 1950s.Forestry was also part of this program of diversifi-cation. The East Coast Forestry Project had itsroots in a governmental scheme established in1967, which had land stability and employmentobjectives.

From this platform, the process of diversifica-tion increased significantly in the 1980s. Aroundthat time, horticultural production was seen as thekey to Gisborne’s future. Sixteen kiwifruit or-chards were established on the Uawa River flatwith a pack-house at Tolaga Bay, and many otherkiwifruit orchards were developed on the PovertyBay/Waipaoa flats. The country’s largest singlevineyard was planted in the Waiapu Valley, nearTikitiki. Other vineyards were established in areaswhich had no history of grape production. Thoseareas which did have a history of viticulture,especially the Poverty Bay/Waipaoa flats, saw theexpansion of the production of Chardonnay andRiesling varieties. When the citrus industry wasderegulated in 1982, orange orchards also in-creased on the Poverty Bay flats. As HWL consoli-dated its tomato processing operation in Hastings,Cedenco Foods Ltd. opened a tomato processingfactory in Gisborne City in 1986 and sought toincrease the level of tomato production. At thetime of its peak operation in the mid-1990s,Cedenco was supplied by 8 large growers andanother 50 small growers as well as leasing con-siderable quantities of cropping land under its

4 The manager of which was interviewed for the present report (Interview 18).5 See Section 3.2.1.

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own name. There was considerable optimism inthe 1980s that Gisborne was undergoing a periodof fortuitous economic restructuring which wouldsee a successful diversification of its primaryproduction.

However, an article in the first edition of theGisborne Herald for the 1990s, suggested that thisdiversification program was failing: “The 1980swere a decade that promised much but producedlittle” (Conway 1980:8). With recognition ofoversupply in the wine industry, the vines atWaiapu were uprooted. For kiwifruit growers,declining world prices after 1988 and CycloneBola combined to devastate the industry inGisborne and the kiwifruit packhouse at TolagaBay closed down. At one point up to 50 kiwifruitorchards had been planned for the area aroundTolaga Bay, but only three survived after theclosure of the packhouse. The most notable failurewas the collapse of Cedenco in 1996, only twoyears after a considerable expansion of itsGisborne factory6. Nevertheless, these aspects ofthe region’s diversification from agriculture tohorticulture have been replaced by other horticul-tural ventures which are more small-scale in theirorientation. Macadamia (Macadamia ternifolia),feijoa (Feijoa sellowiana) and avocado (Perseagratissima) production in the East Cape region hasgrown considerably during the 1990s. Other‘exotic’ foods such as persimmons, mandarins(Citrus reticulata) and truffles (Tuber melanosporum)have also been grown in recent times on thePoverty Bay flats. Specialist markets also devel-oped, such as the supply of fresh vegetables,especially squash and onions, for export and off-season production of broccoli for the Japanesemarket. In general, diversification from agricul-ture to horticulture in Gisborne District did notfail completely, but has increasingly been targetedtowards niche operations. With the area’s growingconditions being appropriate for ‘exotic’ fruits andcrops which need long growing seasons or off-season production, specialised production ofvalue-added horticultural goods appears to be thebest hope for Gisborne District. Organic fruits andvegetables are just one type of these niche prod-ucts.

6 The major part of Cedenco’s operation – its tomato processing facility – was transferred to Australia. Someprocessing activity remains at the Gisborne plant, but this is very limited compared to the scope of the company’sinfluence in the area during the period 1992-1996.

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Chapter 3

Initial development oforganic horticulture inGisborne District

In the previous chapter, it was established thatboth agriculture and horticulture in GisborneDistrict are undergoing a period of substantial

restructuring. That restructuring has incorporatedtwo dynamics: first, a farm-level move away fromdependence on pastoral production and intomixed-production including horticulture; and,second, movement of horticultural operations intovalue-added and niche production. The purposeof this chapter is to evaluate how those dynamicshave affected the evolution of organic horticulturein Gisborne District. The chapter concentrateslargely on the activities of one company – Heinz-Wattie Ltd. (HWL) – and its efforts to establish anorganic sweet corn operation since 1991. The closeattention given to HWL reflects two importantcharacteristics of the initial development oforganic horticulture in Gisborne District. Whereasthe Canterbury (Campbell 1996) and Bay of Plenty(Campbell et al. 1997) cases highlight how com-mercial exporting of organics can grow out of anexistent domestic industry, export of organic foodfrom the Gisborne area grew rapidly despiteinherently low levels of domestic production andconsumption of organic produce. The secondcharacteristic of the initial moves towards theexport of organic produce is the dominance ofHWL in organics between 1992 and 1995. Chapter4 evaluates the increase in small and medium sizecompanies entering the organic industry since thattime, as well as the increasing range of organicproducts grown in Gisborne, but in the first half ofthis decade HWL and its sweet corn growers werethe industry pioneers, so the company warrantsspecific attention in this chapter.

3.1 The structural position ofHeinz-Wattie Ltd. in the early1990s

Given the initial dominance of HWL in theevolution of Gisborne’s organic industry it ispertinent to examine the motivations of thatcompany with respect to organic production. Themotivations for HWL’s organic sweet corn initia-tive cannot be separated from either the wider‘Grow Organic With Watties’ program7, the chang-ing fortunes of its conventional products or its

changing status and structure as a company. Allthese factors have bearing on the type of organicsweet corn operation that developed in Gisbornein the early 1990s.

3.1.1 Motivations for organic exportingIn the first report of this series (Campbell

1996), Heinz-Wattie Ltd. was shown to haveplayed a major part in the development of organicexporting from Canterbury. In that case, the mainexport goods were peas and carrots, but themotivating factors for producing those goods arealso relevant to the development of organic sweetcorn in Gisborne, especially as the strategy forboth provinces emerged in tandem. Campbell(1996:25ff) identified four factors which influencedHWL’s decision to pursue organic product lines:

• Preserving access to First World markets. Theexperiment with organics was only one part ofthis strategy, but quickly became its mostsuccessful component;

• The unfavourable position of bulk commodi-ties in the world vegetable market in the 1980sand 90s which required experiments in market-ing. Improved marketing became an evengreater priority when H.J. Heinz Co. took overWattie Frozen Foods Ltd.. The new manage-ment brought a more marketing-orientedapproach compared to the production focus ofthe prior owners, Goodman Fielder Wattie Ltd.(Interview 1, see also Roche 1996).

• Organic production was also considered to bedesirable because it added value to existingproducts without requiring a costly restructur-ing of processing facilities.

• In part, HWL was responding to requests fromJapanese buyers regarding the ‘clean andgreen’ qualities of HWL products and somecompanies specifically desired an organicproduct. While HWL already marketed itsmainstream produce as the result of lesschemically-intensive production methods thanthe market alternatives, by linking the main-stream product to a fully organic product,market performance was improved. Organicproducts could act as a ‘keyhole product’,improving the market standing of mainstreamproducts, and gaining access to new, previ-ously disinterested buyers.

Campbell (1996) also identified another factorwhich was the independent conversion of previ-ously conventional and long-term HWL growersto organic production in Canterbury, whichprovided HWL with some organic product toexport. This did not occur in Gisborne where there

7 The HWL promotional program for attracting conventional growers to organic production. See Section 3.2.3.Henceforth, GOWW.

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were almost no existing organic growers whocould be contracted to grow sweet corn.

3.1.2 The specific need for organic corn infrozen mixes

There were, however, some factors that sepa-rate HWL’s motivations for developing organicproduction in Gisborne from what occurred in itsother supply regions. Sweetcorn was always goingto be an integral part of the larger HWL organicsprogram as it can be used in combination withpeas and carrots to create new products for theJapanese market. Peas and corn are able to be soldseparately, but there is less demand for organiccarrots and they are not sold as an individualproduct. Organic carrots have been successfullymarketed, however, using a pea/carrot/sweetcorn mix which is popular in the Japanese market(Interview 1). Consequently, production of organicsweet corn has enabled HWL to expand its prod-uct range from a focus on peas, to include sweetcorn, and mixed vegetables. This made sweet cornan important part of the HWL strategy for Japan,and as the best growing conditions for sweet cornin the vicinity of HWL’s four freezing plants are inGisborne, it is clear as to why HWL was particu-larly interested in fostering organic production inthe region.

Furthermore, organic sweet corn tends toattract a higher premium in the market than otherorganic frozen vegetables (Interview 2), and sellsat between 40-50% more (per processed tonne)than organic peas or carrots (Interview 1). Thesehigh premiums help to offset higher costs ofproduction. To a significant degree, therefore, thegrowth of organic horticulture in Gisborne Districtis accounted for by its suitability to grow oneparticular crop that meets one company’s specificsourcing and marketing needs. Many of the otherorganic crops/companies in Gisborne have devel-oped in a successional or ancillary nature8 to theHWL sweet corn operation and there is somedoubt as to whether they would have been estab-lished so easily in the absence of organic sweetcorn production.

3.1.3 The status of HWL’s Gisborne plantA second set of factors which separate the

HWL motivations for organics in Gisborne fromthe company’s wider organic strategy concernsthe status of its Gisborne plant. Even before theHeinz takeover of HWL, it was evident that theGisborne factory was the most vulnerable of thefour frozen goods factories. Despite having twoadditional factories on site – “Best-Friend” petfoods and “Asahi” frozen prepared meals – HWLGisborne was more dependent on one crop (sweet

corn) than were HWL in Hastings, Christchurch orFeilding. Some difficulties concerned the age andposition of the Gisborne factory. Given its closeproximity to the sea and to the Turanganui riverthat runs through Gisborne City, and with therequirements of the Gisborne District plan fordischarges to water, the possibility of expensiveplant upgrades has been mooted for some time(Interview 18).

Other difficulties were directly related to themain product in the factory – sweet corn. Therewere two main factors that influenced the sweetcorn operation during the 1990s. First, the globalmarket in frozen sweet corn has been subject tostrong fluctuations in supply which have im-pacted on world prices. Consequently, in someseasons the factory operated below capacity(Interview 1, 2). Second, the emergence ofCedenco Foods Ltd. in the mid-90s created anincreased demand for land previously used forsweet corn. This culminated in 1994/95 when thecost of land rentals soared, as did crop prices, withHWL increasing its sweet corn contract price byaround 20% and establishing a system of partialforward payment to growers to meet the Cedencochallenge. While Cedenco’s demise can be par-tially attributed to the unsustainable aspects ofthis competition, HWL’s sweet corn operationsurvived. The combination of world marketfluctuations and competition with Cedenco raiseda number of questions regarding the future for thesweet corn operation at the Gisborne factory.

Interviewees from HWL Gisborne drew a clearlink between the pressures on the Gisborne factoryin the 1990s and the potential for organic sweet-corn (and also pea) processing to underwrite thefuture of the factory. One HWL staff memberhighlighted the relationship between these pres-sures and the development of organics:

“The only future for the plant here is inorganics. So we’ve got out there and promotedit. Our jobs are on the line, so we’ve beenparticularly keen for the Grow Organics withWatties program to be a success. We’ve prob-ably adopted it as our own more than theother Watties field areas have” (Interview 8).

These concerns about the factory’s future –which have created a local dynamic within HWLGisborne towards organics – have been accentu-ated since the Heinz takeover. The Heinz com-pany sets very challenging targets for returns oninvestment, targets which have led to a rethinkthroughout the HWL group about the structureand operation of each of the manufacturingfacilities, including those at Gisborne. In July of1997, these pressures culminated in the announce-

8 See Chapter 4, especially Section 4.1.

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ment that the pet food and prepacked meal opera-tions would be transferred to Hastings9. As thisreport was being written, further plans are inprogress to sell the frozen vegetables plant to a‘co-packer’ company, which would then be placedon long-term contract to supply HWL with bothconventional and organic produce. This is por-trayed as a ‘win-win’ situation: Heinz would havereduced its exposure in terms of fixed costs andcould concentrate on its high-profit marketingactivities, while a local company would probablyfind the return on investment more than adequatecompared to the high targets set by Heinz.

Whatever the outcome of these negotiations,the long-term move towards an increasing organicthroughput for the HWL Gisborne plant seems setto continue. This is apparent in the current season,for which increased volumes of sweet corn havebeen provided from a slightly reduced number ofcontracts. Proportionately, organic sweet cornproduction continues to increase. In the 1997/98season, 15% of all crops grown for HWL Gisbornewill be organic and this increasing proportionlooks likely to continue for the immediate term(Interview 1).

3.2 The HWL strategy forconverting sweet corn growersto organic production

Therefore, the motivations for HWL’sGisborne interest in organics were a mix of globaltrends, company strategy, the suitability of thedistrict for sweet corn production and a localdynamic rooted in the status of its Gisbornefactory. When these trends combined to inspire aserious attempt at establishing organic sweet cornproduction in 1992, however, a further complica-tion arose. HWL Christchurch had experiencedseveral problems in establishing its organic opera-tion in the Canterbury province from 1990/91 (seeCampbell 1996). Conventional growers had beenslow to react to the premium for peas and, ini-tially, few were convinced to proceed with the 2-3year transition process to obtain BIO-GRO certifi-cation. Although HWL Christchurch ultimatelydepended on its ability to attract conventionalgrowers for the long-term success of its organic

program, it nevertheless proceeded with thatoperation in 1990/91 without the conversion ofmany conventional growers. It was able to do sobecause Canterbury had a history of domesticorganic production from the 1970s, with manylong-term organic growers already certified withBIO-GRO NZ. A further bonus was the presence ofgrowers who had been long-term HWL suppliersbut had independently converted to organicproduction prior to HWL’s organic strategy.Initially, a number of these organic growers signedorganic contracts with HWL Christchurch, andmany remain as key suppliers. In the case ofGisborne during 1991, however, only two indi-viduals of note were BIO-GRO certified – a winegrower with no available land or desire to growsweet corn and a deer farmer with limitedamounts of potential land. Consequently, the lackof a domestic organic industry posed a consider-able barrier to HWL’s desire to establish organicsweet corn production in Gisborne District.

3.2.1 Attracting long-term organicgrowers

In this context HWL Gisborne were: “preparedto break our own rules to get the organics pro-gram off the ground” (Interview 1). Usually, HWLidentify six preferred features of cropping land todecide whether they will contract an individual togrow sweet corn (Interview 1):

• Flat even paddocks for uniform crop develop-ment and optimum machinery operation;

• Larger paddock sizes are preferred for opera-tional efficiency;

• Well drained soil, because wet soil reducesyield and quality and impedes the use ofmachinery;

• Good natural fertility, soil structure and nomajor weed problems;

• Access for heavy vehicles;• Fenced to keep out stock.

Aside from the specificities of the land to beused for sweet corn production, there are otherqualities that are also preferable for sweet cornsuppliers:

9 The primary cause of this transfer relates to the closure of Gisborne’s Kaiti Freezing works two years earlier.This freezing works supplied the majority of the meat off-cuts to ‘Best Friend’ pet foods with the rest being trans-ported in through Hawke’s Bay. Without the freezing works, “Best Friend” was required to import all its meat off-cuts and offal from other centres and it was deemed appropriate to shift that particular part of the plant to a centrewith a meat processing industry sizeable enough to supply all off-cuts from local sources. A second reason for therelocation was that the Gisborne plant was old and needed to be upgraded even if it remained in Gisborne. Overall,the plant relocation demonstrates the Heinz influence on Watties NZ, especially in terms of accelerating therestructuring of the processing divisions in order to meet investment targets.

10 A considerable amount of land is contracted at some distance to Gisborne, but a sliding payment scale is usedwhich places the burden of extra transport costs onto the grower, not HWL. Consequently, closeness of land to thefactory can be a factor in the overall package as to whether a grower should engage in a contract with HWL.

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• Land should ideally be situated near to thefactory to assist the logistical management ofthe crop10;

• For organic production (and to a lesser extentfor conventional), HWL preferred to deal withproducers exhibiting a particular ‘mind-set’11.

Although HWL committed most of its promo-tional effort for organics to courting their conven-tional growers, initially they approached long-term organic growers and growers who had noexperience growing sweet corn but had suitableland to convert. This was especially the case ifHWL felt their land could comply with the BIO-GRO certification process quickly because theyhad records showing that chemicals and fertilisershad not been used on it for some time. In fact,HWL’s first organic sweet corn grower (1991/92)did not display a number of the preferred qualitiesas summarised above: his land was 60km north ofGisborne near Tolaga Bay; his property had beenseverely flooded by Cyclone Bola four yearsearlier and suffered drainage problems; and hehad never grown sweet corn. He was also (fortui-tously) interested in experimenting with organicsweet corn for philosophical rather than purelyfinancial reasons.

The grower initially provided about 1.5ha ofBIO-GRO certified land and produced sweet cornat 6t/ha12. The following year the land area wasincreased to 3ha and he achieved 10t/ha (Inter-view 23). After four years he discarded sweet cornproduction for two reasons. First, his main inter-ests were in deer farming and he felt “that thesweet corn thing was a bit of a challenge. After itwas up and running it was no longer a challengeand I didn’t want it to be a distraction from myefforts in organic deer farming13” (ibid.). Second,he had become dissatisfied with the overalldirection of HWL’s sweet corn operation. He is“fundamentally opposed to monoculture and anyoperation that preserved the old paradigm oflarge-scale, soil-compacting horticulture” (Inter-view 23). In the period 1992-1994, two otherindividuals from non-horticultural backgroundsbecame involved in growing organic sweet cornlargely for philosophical reasons, but both havesince pulled out citing philosophical and other

reasons.There is an interesting comparison that can be

made to Canterbury at this point. In Canterbury, anumber of long-term/philosophically-orientedorganic growers produced high crop yields forHWL in the 1990s. In Gisborne, no long-termorganic growers, who were previously inexperi-enced with sweet corn, were able to match theaverage yields of conventional sweet corn growerswho converted to organic production. Conse-quently, HWL Gisborne, even more than HWLCanterbury, began to rely on converting conven-tional growers to advance the company’s strategyfor organic sweet corn.

3.2.2 Attracting Maori land trustsWith those three growers and also with two

conventional growers certifying small portions oftheir properties, HWL could source sweet cornfrom a total of 7ha fully certified and a further15ha of BIO-GRO transitional land for the 1992/93season14. However, this area was too small toensure the sustainability of the project. In solvingthis problem of insufficient supply, HWL Gisborneexplored relatively new territory in terms ofgrower-processor arrangements: it proactivelyassisted Maori land-use trusts on multiply-ownedland into organic production. Despite the fact thatonly a few trusts/incorporations entered intoorganic production in the area, this arrangementand its outcomes are given special attention herefor two reasons. First, with such a large proportionof available land in Gisborne District undermultiple Maori ownership the ability of Maori toenter the industry may be a key factor in the long-term growth of organics in the region. Second, theMaori influence is a local characteristic that sep-arates Gisborne from the three other case studiesin the present series of reports.

The first trust to enter organic production –Paripoupou Station – is representative of thesituation for much of the Maori land in GisborneDistrict (Interviews 7, 9). When the governmentsought to purchase a large block of land rangingfrom Tolaga Bay (50km north of Gisborne) toTokomaru Bay (85km north of Gisborne) in the1860s, a number of Maori owners refused to sell.

11 “We just know often whether they will be able to do it – most can’t. They have to be innovative, the type ofgrower that will chase premiums” (Interview 2). For the specifically organic producers, the need for innovation waseven more apparent: “We do not want growers who are just financially driven to change to organics. The mind-setmust also include a willingness to adapt, to take on a challenge, a preparedness mentally to go against convention.Some conventional growers we recognise do not fit this bill” (Interview 1).

12 A typical conventional sweetcorn property achieves 18t/ha. However, this particular grower was happy withthis as a first effort and considered the premium a bonus.

13 See Section 5.3.1.14 Most of this was to be sold as ‘Transition BIO-GRO’. Although HWL could obtain a premium in Japan for

crops ‘in transition’, this was lower than that which could be achieved if the produce was fully certified. However,HWL was prepared to set the ‘Transition BIO-GRO’ sweetcorn price for its growers at 70% higher than for itsconventional crops (ie. not much lower than the 80% premium for full BIO-GRO certified organic) so that the twoyears of transition would not act as a barrier to growers converting to an organic regime.

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Even though these owners had a shareholderinterest in the entire block of land, a contractresulted which gave those owners a 120ha ‘reser-vation’ at Three Bridges (Interview 19, Oliver &Thompson 1971:99) – 65km north of Gisborne.Initially, there were 11 owners but over the next70-80 years the number of owners swelled throughmultiple inheritance customs to over 600. In theearly 1950s, the station fell into rates arrears,largely because it was unable to attract loanfinance15 to expand and compete with Pakehastation-farms. A compromise was established inthe Maori Land Court under which the ownerswould retain title but only if they leased the landon a long-term basis to a Pakeha station-farmer.The long-term lease was due to expire in 1992. Inadvance of that date, however, Cyclone Bola(1988) had its greatest impact in the Three Bridgesarea, and up to three metres of silt was depositedon the river flat portion of the property. In theyears between Bola and transference, the leaseecarried out no remedial activities, applied nofertilisers nor chemicals and allowed weeds andtwo metre high rushes to infest the property(Interview 19). When the shareholders – nownumbering over 1000 – regained managementcontrol in 1992 they were in no financial positionto remedy these problems and it was used for littlemore than occasional grazing, with its long-termpotential in some doubt.

HWL became aware of the land through ashare-cropper who desired to grow maize on theproperty as a leasee (Interview 2). When thatindividual asked to switch the contract to organicsweet corn, the shareholders’ trust pulled out ofthe agreement, fearing that control of the landwould again be taken from them on a long-termbasis (Interview 7). At this point HWL – “desper-ate for any potential organic land they could gettheir hands on” – attempted to convince the landtrust to convert to organic production because theland had effectively been in fallow for years(Interview 2). The Paripoupou Trust was initiallyinterested in organics because it thought it wouldbe a labour intensive activity which could be usedto employ some of the large number of localunemployed (Interviews 7, 19). HWL informedthem that this would not be the case becausemechanical methods could be used for weedingand harvesting, but the shareholders’ trust de-

cided to continue with the conversion of theproperty. After several months of negotiations,they agreed to year-by-year contracts with HWLto supply organic sweet corn on 45ha – more thandouble the total of organic and transitional landthat HWL had to that point contracted – but stilllacked the start-up capital to realise their dreams.HWL became relatively proactive at this stage,enacting the following initiatives to ensure thatParipoupou was successful. The company:

• Made internal preparations to loan Paripoupoudevelopment capital if no other source could befound (something it almost never does forconventional growers, Interviews 1, 2);

• Began third party negotiations with the localmember of parliament and Te Puni Kokiri(henceforth TPK)16 to gain Mana DevelopmentFund capital. These negotiations led to asuspensory loan of $100,000 being made byTPK which was used for land restoration,including a requisite drainage program (Inter-views 7, 9, 19). This money also helped thestation gain a $200,000 overdraft from a privatebank;

• Gave Paripoupou an “unusually large amountof advice for their initial learning of growingmethods”, including assistance in finding afarm manager/agronomist to help with finan-cial and crop decisions (Interview 7);

• Mitigated the loss Paripoupou made in the firstyear by writing off the value of seed. Becauseof the late decision to plant organic sweet corn,and the considerable effort required to clear45ha of neglected land and prepare a seedbed,the crops were sown very late in a seasonwhich was unusually cool and wet, resulting ina low-yielding first crop. (Interview 1, 19).

By 1997, Paripoupou had changed its statuswith the Maori Land Court to an incorporation,reflecting its successful standing as a business. Ithad 65ha of BIO-GRO certified land which weresuitable for cropping and had grown sweet cornfor five seasons. The Incorporation has recentlydiversified into squash and peas as part of itsorganic rotation. All concerned parties appearhappy with these outcomes. For its part,Paripoupou overcame its initial problems and inthe third season made a $100,000 profit. Although

15 It is prohibitively difficult for land trusts and incorporations to attract private finance capital as banks arenot prepared to take the risk that is entailed in lending money to managers of land in multiple ownership. Al-though, there have been changes to the appropriate Maori land legislation – especially in the form of the Te TureWhenua Maori Act 1993 – this situation largely remains today.

16 Te Puni Kokiri had itself been restructured in the year before these negotiations and this represented almostthe last payment of Mana funds. The Mana program had been a feature of the old Department of Maori Affairswhich had a proactive developmental mandate and start-up capital for innovative developmental projects on Maoriland. In contrast to this, TPK has basically an advisory role and there is little capital available for Maori today thatwould match this loan. Consequently, there is some doubt as to whether similar operations could eventuate atpresent and the successful conversion to organics by Paripoupou had much to do with serendipity.

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some of this money has had to be used to over-come a poor 1996/97 season, it has been able topurchase new machinery and “future-proof itselfagainst another Bola by putting a lot of money inthe bank” (Interview 19). The manager ofParipoupou also believes that organics is inkeeping with the stewardship beliefs of Maori onthe East Coast. Both HWL and TPK showcase theproperty as “something special, something uniquewhich shows that Maori can be innovative, thatlarge multinationals don’t have to be rotten andthat both can work together” (Interview 2).

Despite this success, one could not yet claimthat Paripoupou provides a future blueprint fororganic development in the area. Because of thedifficulties experienced in successfully establish-ing Paripoupou as an organic producer, HWL hassubsequently proceeded with caution in dealingwith properties which are characteristic of theMaori norm: land in multiple ownership; landwhich has been damaged by flooding; or ownedby people who are inexperienced sweet cornproducers. Some of these concerns have acted asimpediments to negotiations with land incorpora-tions and HWL have not rushed to repeat theParipoupou situation:

“Paripoupou was a classic case of...‘we’vegot to get this program rolling, we’ll take it!’Well if that same property came up again we’drun a mile because the land is too marginaland the start-up costs too high” (Interview 8).

“Well it happened because we had to gofrom nothing to something right away. Andgetting conventional growers to go organic onany sort of scale at all takes time. Now that wehave sufficient conventional growers that haveconverted we are not likely to go to the sameeffort again” (Interview 2).

There were a number of other reasons whichconcerned HWL managers and agronomists aboutdealing with Maori land. Other individuals fromMaori land trusts had contacted HWL and hadpromised considerable amounts of flat land thatcould go through the BIO-GRO process quicklybut, on further investigation, HWL found thatthese agents had no authority to do so (Interviews2, 8). Some Maori owners were also reported toexpect HWL to incur more of the start-up costthan was usual. During this period, HWL rejectedan offer of 800ha – which would have doubledHWL’s contracted organic land – from anotherincorporation primarily because its location nearRuatoria was too far from the factory, but alsobecause of other prevailing concerns about Maoriincorporations (Interview 2).

Perhaps the greatest threat to the potential fororganics on Maori land came from difficultiesexperienced by a second incorporation to attempt

organic production. From 1994, that incorporationstarted to convert land previously unused or usedfor pastoral farming and in 1994/95 producedtransitional sweet corn for HWL. However, it hada strong desire to be more than just a ‘supplier’ ofan input without a value-added component(Interview 7). Having attracted a loan from agovernmental source, it invested large sums ofmoney in a slush-ice machine for the export oforganic broccoli, with the desire to grow, processand market produce itself. It also invested heavilyin mechanical weeders and other horticulturalmachinery. With little knowledge of horticultureor international marketing and with a sizeableexposure in terms of fixed-capital, the secondincorporation lost a considerable amount ofmoney in the 1996/97 season (Interviews 7, 19)and was subsequently dropped by HWL for being“too risky to deal with” (Interview 8). It willcontinue to operate for the 1997/98 season and itsmanagers still believe in their ability “to cut outthe middle-men: the processors and the market-ers” (Interview 4). Given three years of heavylosses, this belief seems somewhat naive. Thelosses have led to processors and packers whomight otherwise have considered fostering Maoriorganics to be wary about dealing with all Maoritrusts/incorporations (Interviews 4, 7, 9).

Given the extent of Maori land, and also theMaori desire to become involved in organicswhich is seen by some to “conform to our environ-mental ethos” (Interview 9), there is significantpotential for organic agriculture on Maori land inGisborne District. After a cooling off periodfollowing the effort to establish organic produc-tion on the two properties, HWL has recentlyattempted to re-establish the development oforganic sweet corn production on other Maoriland. In 1995, an incorporation approached HWLwith land that met HWL’s criteria, but the result-ing HWL offer was met by a better offer fromanother processor not involved in organics (Inter-view 2). Another venture emerged in Wairoawhere HWL began to lease land from local Maoriowners (several properties having multipleownership arrangements) and to develop whatwas again silty, weed-infested land, for sweet cornproduction. In this development, the local ownerstook no part in the actual production of sweet cornbut simply held the leases and cooperated withHWL’s contracting arrangements. By 1997/98, thisdevelopment included five properties and 100haof land in transition to BIO-GRO certification forsweet corn. The Wairoa project is seen by HWL asan experiment which may overcome some of theperceived difficulties in working with land that is:in multiple ownership; run by committees; poorlydeveloped because of restraints on the owners’ability to raise finance capital; and owned bypeople with no prior experience of sweet cornproduction, but with a desire to become involved

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in organics (Interview 1).The various successes and failures in the

developing relationship between HWL and Maoriincorporations indicate both the positive potentialof such relations and the barriers that need to beovercome for these developments to continue. Avital factor in Paripoupou’s success was Manafunding, and while HWL was prepared to con-sider a loan in 1992, its supply base is now morefirmly established and such an offer is not likely toeventuate in the future. The Wairoa developmentindicates a possible new phase in this relationship.Recent decisions by the BIO-GRO board to allowcertification of long-term leased land have enabledHWL to consider leasing land from both Maoriand non-Maori owners.

Leasing of land allows some concerns to beovercome that have acted as barriers to HWLconsidering Maori land17, and this may increasethe number of hectares of organic land owned byMaori incorporations in the future. However,while this will extend organic production, thelease arrangement will almost certainly not carrythe same range of benefits for Maori developmentthan the alternative model evidenced byParipoupou. It can be argued that HWL’s newdirection towards leasing Maori land rather thanallowing local owners to work the land them-selves is overly cautious and it will be perceivedby some as paternalistic. In recent years, there hasbeen a groundswell of Maori concern in Tairawhitiover incorporations that seek profit over employ-ment in their use of Maori land (Coombes 1997).While the Paripoupou example yielded little interms of employment, it represented a directionthat would be far more acceptable to the impover-ished Maori that have fuelled this groundswellthan leasing. More importantly, Ngati Poroudevelopment since 1945 has suffered because of aforced dependence on leasing. For this reason,many local Maori will be unimpressed with a newdirection towards leasing, even if such a directionappeals to their trustees whose range of options isseverely limited by the Te Ture Whenua MaoriAct.

3.2.3 “Grow Organic with Watties”The recruitment of growers for organic pro-

duction in Gisborne differs to the pattern seen inCanterbury where a variety of possible growerswere contracted in the initial rush to build asupply base (even though these growers wereoften, in hindsight, less than suitable). In Canter-bury, it was eventually recognised that the mainpotential for boosting grower numbers lay withthe company’s established conventional growers.Because of the absence of a significant group ofestablished long-term organic growers inGisborne, HWL recognised from the outset thatconventional growers would most closely conformto the desired criteria for converting to organicsweet corn production. GOWW is a promotionaland literature campaign developed in response todifficulties experienced in recruiting growers forHWL’s organic program. Its main goals are todispel misinformation about organic productionand to transfer organic information to growers18.As such, it was primarily targeted to conventionalgrowers who had long-standing relations withHWL, especially those that were consideredinnovative and who might follow the lead of thecompany (Interview 1). It included a series ofinformational brochures which were sent togrowers and outlined the premiums for – and thesmall amount of change required to enter – or-ganic agriculture, but also included group discus-sions, a media campaign, showcase exhibits oforganic farms and public lectures. Private andindividual negotiations with growers have alwaysbeen the primary strategy of HWL recruitment.From 1993 the more organised and broad ap-proach of GOWW contributed to an increasednumber of conventional growers interested inorganic production contacting the company.

The component of the GOWW strategy that, inhindsight, was of most interest to many growers,was the promotion of a premium for organic overconventional production19. It had been consideredby HWL Gisborne that conventional growers wereunlikely to convert to, and sustain, organic pro-duction unless there was a net premium of around20-25% (Interview 2). This incorporated the need

17 It is possible that leasing will also be positively perceived by some Maori growers and, in certain circum-stances, by BIO-GRO NZ. Because of the underdeveloped state of some Maori land, potential growers may beborderline in terms of whether they would be certified by BIO-GRO NZ. In this context leasing could reduce thestart-up risk for both HWL and the land owners and provide a better chance of certification for the land owner at alater date, after HWL has dealt with land-based impediments to organic production. It is probable that BIO-GROwould favour this use of leasing as a stepping-stone to organic production by the land owner. However, it is tooearly to tell whether this scenario will be a reality and it is unlikely that more than a few Maori incorporations,which become involved in organics through leasing, will eventually adopt organic production in their own right.

18 For further information see Report No. 1 (Campbell 1996:25ff).19This has, at times, been a contentious issue. Both in Canterbury and Gisborne, there was some debate within

HWL as to the extent to which the premium should be used to convert growers. Some argued that the premiummight not last in the long-term and that growers should convert for other reasons. Others countered that many ofthe growers were primarily interested in the premium, and some agronomists based their discussions with inter-ested growers around the potential premiums.

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to transparently account for the additional costs ingrowing organically, including an account ofadditional labour required for mechanical weed-ing and opportunity costs such as the inability tograze cattle over winter. After some initial ‘guess-timates’ considerable research was conducted toascertain both sweet corn and, later, pea prices.

In the next Chapter, it will be established thatthese price premiums result in a gross margin (perhectare) premium of over 30%. Despite thispremium, HWL initially struggled to convert itsGisborne growers, especially in 1992/93. A signifi-cant turnaround occurred in 1993 when one of themore highly respected of the local growers com-mitted himself to an organic regime. Unlike otherconversions, that grower rapidly transferred hisentire property through BIO-GRO certification,adding 135ha of land in three years to HWL’sorganic sweet corn operation (Interview 18). Thishas created a growing sense of legitimacy fororganics in the district and has led to the conver-sion of other conventional growers (Interviews 1,2, 8). Another factor which has accelerated conver-sions is the success of technology that HWLsourced for growers in 1994 – part of the informa-tion transfer objectives of GOWW. Conventionalgrowers had considerable fears of weed infesta-tion on organic sweet corn properties, but machin-ery imported from the US has countered thisproblem (Interview 8). By August 1997, HWL had10 growers either in transition or fully certifiedwith BIO-GRO, with at least a further six growersregistered for certification and hoping to be ‘intransition’ by the 1998/99 season (ibid.).

In 1998, HWL now has over 2000ha of transi-tional or certified land under its growers in NewZealand and 405ha of this is in the Gisborne area.While Canterbury has a greater number of hec-tares of certified land, Gisborne is remarkable forthe speed with which new land has been con-verted. Thus, the GOWW program, as it has been

applied to Gisborne,appears to be even moreimportant than in otherareas, especially whenone considers the initialdifficulties broughtabout by the lack oflong-term organicgrowers to act as pio-neers. The success ofGOWW has occurredboth despite and be-cause of the uncertainfuture for the Gisborneplant. While uncertaintyhas acted as a barrier tosome growers convert-

ing to organic production (Interview 1) – particu-larly given the plant restructuring announced inJune 1997 (Interviews 17, 22) – for other conven-tional growers it had the opposite effect, prompt-ing the move to organics in order to ‘save theGisborne plant’ (Interview 20).

3.3 The development of organicmethods for sweet cornproduction

In many respects, the long-term success of theGOWW campaign is dependent on how its con-ventional sweet corn growers perceive the suit-ability of organic methods. If the methods devel-oped thus far appear to work successfully, thenthe typical fears of many growers – reduced soilfertility, weed infestation and difficulties manag-ing pests – will be proven unwarranted andgrowers will be more likely to convert. Again,Gisborne differs to other regions, where pioneergrowers had already established some (or all)methods required for successful organic produc-tion in the region. Consequently, this section willreview the methods for organic production ofsweet corn and other organic crops produced inGisborne as they have evolved over the last 6years.

3.3.1 Growing organic sweet corn forcommercial horticulture: fertility issues

There are two main types of sweet corn grownworldwide: ordinary and supersweet. Ordinarysweet corn is mainly grown for processing, whilethe supersweet varieties (which include bothyellow and bi-coloured) dominate the freshmarket, but are also being used increasingly forprocessing. In Gisborne, HWL mainly uses twovarieties. Ordinary sweet corn is predominantly

Table 3.1: Average price (in $NZ) paid by HWL per (pre-processed) tonne toGisborne growers 1992-1993 to 1995/9620. (Sources: HWL Gisborne Gross Mar-gin Report on 1997 Crop; adapted using information from Interviews 1, 2, 8,17, 18, 20, 22)

Conventional 140 – 305 –

Transitional 240 71% 365 20%

Organic 255 82% 380 26%

Sweetcorn (Jubilee) Peas

price premiumover

conventional

price premiumover

conventional$/t $/t

20 After 1995/96 the premium was markedly reduced. This change is discussed in Section 4.2.2.

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the Jubilee variety, while supersweet is usually theSS42 variety (Interview 6). Planting of both Jubileeand SS42 is staggered from late September to midDecember, when soil temperature and moisturefall within an acceptable range. Both varieties areharvested from late January to early March.Compared to other crops, sweet corn is relativelyresource depleting and appropriates significantquantities of nitrogen from the soil (McLaren &Cameron 1990:206). Not only does it have a longgrowing time – 100-110 days for the varietiesfavoured by HWL – but it also requires consist-ently high levels of nitrogen at all periods of itsgrowth. This meant that organic sweet corn was asignificant challenge for HWL agronomists andgrowers relative to their other crops – especiallypeas – which are less demanding on soil fertility.Traditionally, significant quantities of urea havebeen used to maintain soil fertility on sweet cornproperties, which is not acceptable under BIO-GRO organic standards.

Some of the fertility enhancing methodsadopted for other commercially grown organiccrops were also applicable to sweet corn produc-tion. Reactive rock phosphates (RPRs) are slowrelease fertilisers which are allowable under BIO-GRO standards. Fearing long-term fertility prob-lems, organic sweet corn growers in GisborneDistrict have applied RPRs at 300-450kg/ha,claiming that this is relatively high compared touse on organic crops in other regions (Interview18). Fertilisers derived from fish products are alsoused as a crop dressing two to three times a year.Other typical organic applications include limeand the restricted use of cobalt21 as a supplement,which are used to counteract a local soil deficiencybrought about by high levels of siltation on flood-prone land.

Because of high demands on soil fertility, thefirst technical barrier to the development oforganic sweet corn was the need for a ‘green’manure crop – a crop which would aid soil fertil-ity and could be ploughed back into the soil.Essentially, the first experiment – a mixture oflupin (Lupins angustifolius, notable for its nitrogenfixing abilities) and mustard (Brassica nigra) grownover winter months and ploughed in one to twomonths before planting of the sweet corn – hasproven reliable in the short-term, though it is stilltoo early to evaluate its long-term merit. Both thelupin and the mustard are ploughed into the soilwherein the plant mass breaks down to releaseavailable nitrogen to the summer crop. Somegrowers have altered this mix by decreasing orremoving mustard and replacing it with eitherblack oats (Avena spp.) on wetter properties, orturnips (Brassica campestris) on properties where

organically certified stock can break down thenitrogen into a soil-ready form. Other growershave been loathe to abandon the mustard becauseit is reputed to cleanse the soil of pesticideresidues from previous land use and fungalpathogens.

Initially, some within the organics movementwere less than happy with this arrangement(Interviews 2, 25). It was argued that sweet corndemanded a fallow (in, for example, clover –another nitrogen-fixing plant) every secondsummer because of its tendency to deplete nitro-gen. HWL and growers recognised, however, thatif a cash crop could only be produced half asoften, growers would consider organics lessfeasible than conventional production. All parties,including the growers, HWL, and BIO-GRO NZare in agreement that in the long term repeatedsummer cropping of sweet corn will most likely beunsustainable. Thus, there is a significant need todevelop a system of crop rotation. In the interim,the current system of production has been treatedby the inspectorate as an ‘experiment’ to deter-mine appropriate fertility management strategiesfor sweet corn. As such, this resembles the BIO-GRO board’s position on ‘restricted’ inputs, whichare acceptable in the short term if there is noviable organic alternative, but must act as astepping stone in the development of more sus-tainable practices.

With support from HWL agronomists andscientists the option of a winter fallow from othernitrogen-depleting sources (eg. a winter crop suchas broccoli) and a green manure crop grown overwinter was adopted. Although this necessitatessome opportunity costs22, it means that the sum-mer work calendar for organic sweet corn growersis manageable and not so far removed from thesituation for conventional production that theconversion gap is prohibitive (Interview 2). Thisposition appears acceptable to all parties in theimmediate term, although the long-term desire ofboth HWL and the BIO-GRO inspectorate is tocreate a sustainable full rotation in organic crops.This closely resembles the situation in Canterbury,although recent developments in Gisborne sug-gest that a full rotation of squash, peas and sweetcorn is now possible and is being used by anincreasing number of growers. In the followingchapter, this report will present the differingopinions of growers as to whether the full rotationwill be sustainable in the long-term or whether asummer fallow will still be required to maintainsoil fertility.

21 Restricted to a ‘proof of need required’ basis under the BIO-GRO standards.22 See Section 4.2.3.

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3.3.2 Managing weeds and pestsOne merit used to promote conversion to

organic sweet corn production is that it involvesfew management changes: “Essentially it’s thesame requirement of preparing a good seed bedand if you do that the rest looks after itself”(Interview 8). While some of the methods useddiffer between organic and conventional produc-tion a primary objective – a seed bed as free aspossible from weed seedlings – remains the same.As stated previously, weeds were initially a majorconcern for growers, especially during wet sea-sons (Interview 17). However, the solution to thisproblem was relatively straightforward to imple-ment. Growers merely “turned back the clock tothe ‘40s and ‘50s and borrowed our grandads’methods of weed control” (Interview 7). Essen-tially, this involved a substitution of mechanicalfor chemical weeding. After the green manurecrop is ploughed and then disced into the soil, theground is harrowed 2-3 times. Some growersharrow even after plant emergence, but the impor-tation of specialised ‘spider-weeders’ has meantthat this relatively risky procedure has beencurtailed. These machines utilise a rotating seriesof spoon-shaped tools which pull out weeds andcan be used until the sweet corn plants reach 15cmin height. The technology enables growers tocover over 50ha per day, so mitigates a consider-able amount of the added labour time required fororganic production. Ultimately, however, organicsweet corn production retains the basic elementsof monoculture, so the continued development ofcrop rotations around sweet corn production willbe a major factor in the long-term management ofweeds and, indeed, in the maintenance of soilfertility (Interview 2).

This same requirement for crop rotationapplies with even greater relevance to the man-agement of insect pests, which have providedmore problems for growers than weeds. There areseveral pests which attack sweet corn. The greenvegetable bug (GVB, Nezara viridula) inserts itsstylet through the outer sheath of the cob andsucks the sugary liquid out of individual kernels.As it is the same colour as the sheath, it is difficultto detect and often the first sign that growers havea GVB problem is a high rejection rate at the timeof harvest. Until recently, there has been noconventional solution to the GVB. Now, someconventional growers are managing the pest withchemicals, but the threat posed by GVB is ac-cepted as part of the long-term culture of sweetcorn production in Gisborne. In fact, organicgrowers have one distinct advantage over conven-tional sweet corn producers. The mustard grownprimarily as a winter crop attracts the GVB morethan sweet corn and, with cutting and rolling ofthe mustard, the breeding cohort of the pest iseradicated at just the right time to avoid problems

later in the season. Some growers are experiment-ing with additional strips of mustard which theywill harvest well after crop emergence. Given thatno organophosphate pesticides (which do notdiscern between harmful and desired insects) areused on organic properties, organic growers standto take greater advantage of a wasp parasite ofGVB which has been present in New Zealand formany decades, but was recently re-released byCrop and Food Research funded by VegFed andHWL.

There are a range of pests that affect sweetcorn for which biological control mechanisms arenow available or in development. A parasite hasbeen released for the Argentine stem weevil(Listronotus bonariensis), while biological controlmechanisms have recently been developed forcosmopolitan armyworm (Pseudaletia separata) andcorn ear worm (Heliothis armigera conferta). Headsmut (Sphacelotheca reiliana) – a soil borne fungaldisease – can only be prevented on organic prop-erties by crop rotation, but this is also the situationfor conventional growers. One major challenge isgreasy cutworm (Agrotis ipsilon) which is a com-mon pest for both organic and conventionalproperties. Currently, organic growers attempt tocontrol cutworm using a restricted mix of garlicand pyrethrum which appears to sicken ratherthan kill the pest. Cutworm has caused significantfinancial damage recently on both organic andconventional properties (Interviews 17, 18, 19, 20).Investigations into better organic control mecha-nisms for this pest are currently in progress(Interview 1). In the meantime, it is the mostsignificant pest problem for organic sweet corngrowers.

3.3.3 Extension of organic sweet cornmethods to other crops

Crop rotation is the best long-term solution forboth pests and weeds, so HWL was particularlyinterested in establishing secondary crops whichcould be grown on organic sweet corn properties.For its part, HWL has encouraged its growers togrow peas. Peas have a shorter, 80-90 day, growingperiod and an average crop removes fewer nutri-ents from the soil than sweet corn, with the addedability to fix nitrogen when soil conditions arefavourable. They are a relatively easy crop togrow, with few pest problems. A number of soil-borne fungi (eg. Fusarium oxysporum) affect peasbut, once again, they affect conventional andorganic peas similarly and the best remedy is croprotation. Similar weeding solutions to thosedeveloped for sweet corn can also be used onpeas. Consequently, in recent years, the greenmanure crop and mechanical weeding combina-tion that was initially developed for sweet cornhas been extended to pea production. While theproduction of organic peas in Gisborne is still in

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its early stages, initial harvests suggest thatorganic peas may actually grow better in Gisbornethan in Canterbury. Consequently, organic peashave the potential to become a vital aspect oforganic crop rotations for Gisborne. While it istechnically feasible to grow a conventional peacrop followed by sweet corn in one season(thereby providing the growers with two lots ofrevenue), both BIO-GRO and HWL are in agree-ment that this practice is not permissable fororganic producers (Interview 1).

Many of the organic sweet corn growers haveseen that their newly developed methods could beapplied to squash production, which like sweetcorn and peas, does not require major revision ofits production system to become organic. As oneagronomist put it, squash “is virtually organicanyway” and “few chemicals have been used onsquash in the past” (Interview 6). Nevertheless,soil fertility was a barrier for those attempting toproduce organic squash. Both sweet corn growersand those who have grown squash for decadeshave been quick to adopt the use of green manurecrops, as developed for sweet corn growers, forsquash production. Indeed, the same mix andprocedures for green manure crops tend to beused. Before the adoption of methods used byorganic sweet corn producers, squash growerscarried out a considerable amount of hand weed-ing. Although some hand weeding is still re-quired, the suitability of spider weeders importedfor organic sweet corn have also helped to reducethe amount of labour time invested in squash.

Another method – disease infection periodforecasting – has been adapted specifically fororganic squash production. It is derived fromanalysis of weather conditions and helps growerspredict fungal problems on squash. The mostdetrimental of these is powdery mildew (usuallycased by the organism Sphaerotheca fuliginea onsquash) which, increasingly, is treated with sul-phur both conventionally and organically becausein the 1990s it has developed a resistance toagrichemicals on some properties. The develop-ment of organic squash has provided lessons forall squash growers. No nitrogen is applied toorganic squash in such rapid-impact forms asurea. Subsequently, it has been found that theabsence of this form of nitrogen has led to longershelf-storage times, and conventional methodshave been appropriately altered. One problem fororganic squash production has recently becomeevident. Japanese authorities have repeatedlycalled for the fumigation of all squash enteringtheir country as a phytosanitary precaution. Thiswould mean that organic squash could not carrythe BIO-GRO label into Japan. At present, how-ever, systems are being put in place to circumventthis and the outlook for organic squash growers isreasonably favourable.

3.4 The relationship betweenlocal and export organicindustries

The lack of any substantial domestic organicindustry in Gisborne has already been identifiedas a major factor influencing the way in whichorganic production has developed in the regionduring the 1990s. This section will examine thereasons why there was no domestic industry andthe evolving relationship between export anddomestic sectors.

3.4.1 Accounting for the lack of adomestic organic industry in GisborneDistrict

There is a common assumption in literatureabout the organic industry – both of the academicand popular varieties – that the export/commer-cial organic sector will have a pernicious effect onthe domestic/philosophically-committed sector.Three stakeholders in the domestic organic indus-try, all having an involvement from the mid 1970s,were interviewed to evaluate this assumption.These informants (Interviews 12, 13, 14) recall thatnobody advertised produce as organic in the localmarket before this time. As far as they were aware,only four growers had attempted to grow organicproduce in Gisborne for the local market in thelast 20 years. Some grow for the New Zealandmarket, but cannot find a market for their producewithin Gisborne District. At present, only onefamily produces goods for consumption withinGisborne itself but, while their fruit is BIO-GROcertified, most of their vegetables are labelled as‘spray free’ (Interview 12, 13). Two health foodshops occasionally sell organic fruit and vegeta-bles, and then, mainly, to tourists or three regularlocal customers (Interview 14). All of these factorspoint to an inherent lack of realised demand forthe purchase of organic produce by Gisbornepeople. Further, it appears that this has been thesituation for a lengthy period of time leading tothe relative lack of any domestic producers in thedistrict.

Nevertheless, it is premature to suggest thatbecause there is no realised demand for organicproduce that there is no latent demand. The threestakeholders, as well as many other interviewees,highlighted four factors as explanations for thecurrent position:

• Growing conditions are so good in the areathat anyone interested in ‘healthy’ living willgrow organic vegetables for themselves;

• There are many people in the area who are inlow-income households, so many who areinterested are too poor to pay a premium for

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organic food and either go without, grow theirown or source them from the informaleconomy through barter;

• (Conversely) poor people are usually noteducated on the merits of organic food andcannot pay for it – a fact which, according tosome interviewees, was strongly related to thelarge number of Maori in Gisborne who were,supposedly, less interested in healthy food;

• Gisborne people were portrayed as conserva-tive: “It’s a rural area that loses its young andhas lots of old families who have lived here along time – a recipe for disaster if you’re tryingto set up an organic industry” (Interview 14).

While the general demand for organic producethroughout New Zealand is very low by worldstandards (Saunders et al. 1997) – particularly asNew Zealand consumers exhibit a strong belief inthe ‘safety’ of conventional food in New Zealand –these four factors may explain why demand islower in Gisborne than in most regions. There areother factors, however, which point to a possiblelatent demand for an organic industry. People inGisborne have recently formed the Tairawhitiorganic producers and consumers group – partlybecause it was felt that it might have gained aregional tour from the IFOAM conference atLincoln University during 1994, but also because itwas perceived that interest in organics was in-creasing (Interview 13; Russell 1994). Interest inorganic produce was said to notably increase aftera 1995 campaign concerning the spraying of 2,4D– a herbicide used to eradicate Californian thistle(Cirsium arvense) and other weeds on pastoralfarms (Interviews 12, 13, 14). Members of theTairawhiti organic producers and consumers groupwere also prominent in the Gisborne chemicalawareness group which raised over 8000 signaturesand succeeded in having aerial spraying of 2,4Dprohibited under the District Plan (Scott 1995a,b;Spense 1995). The chemical group highlighted thesuccess of organic exporters, as well as theirsusceptibility to spray drift, as reasons to abandonconventional sprays and subsequently elevatedthe knowledge of, and interest in, organics in thearea.

3.4.2 Effect of exports on the localorganic industry

However, the important fact is that this in-crease in the potential demand and interest inorganics occurred well after the establishment ofthe export organic industry. Indeed, intervieweespoint out that the growing export industry islikely to foster growth in its domestic equivalent.Several reasons for this view were given:

• Some of the export growers could be convincedto sell organic produce in the local market.

Some organic produce which falls into thiscategory has recently been sold in Gisbornesupermarkets;

• Produce grown for the export market, but notmeeting export requirements (‘rejects’), wouldbe sold on the local market. This, as well asproduce falling into the previous category,would satisfy the problem of a lack of supply,which has frustrated many potential organiccustomers in Gisborne and secure their long-term custom;

• Those conventional growers who had con-verted to organic production for pragmaticreasons would themselves seek out organicfood: partly out of interest, but also because ofincreased personal knowledge of the effects ofchemicals;

• The premium for organic produce that can beobtained in the domestic market is less thanthat in the export market and this restrainslarge companies from selling organic goodslocally. It also provides no incentive for suchcompanies to interfere with, or out-compete,individuals or cooperatives who would selllocally;

• The involvement of large companies such asHWL as well as promotional campaigns suchas GOWW have also brought a sense of legiti-macy to organic consumers, leading others tofollow the now-fashionable lead of thoseconsumers.

It might also be argued that the involvementof large companies has helped solidify BIO-GRONZ as the legitimate certifier of organic produce inNew Zealand, helping acquaint New Zealandconsumers with the idea of ‘third party certifica-tion’. This may have overcome the long-standingtendency for consumers to accept organic trading‘on trust’ and only within tight networks whichhas excluded many potential consumers. How-ever, the reasons listed above highlight that alimited supply is the fundamental concern forthose already consuming organic produce inGisborne District. Any move that might increasethe consistency of supply or the diversity ofavailable goods is perceived positively by suchpeople. Some northern hemisphere researchers areconcerned that large companies may, throughtheir superior marketing and economies of scale,force small/local producers out of business but, inthe Gisborne case, few such producers exist.Therefore, the immediate effect of a growingexport organic industry is a positive influence onits local equivalent.

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Chapter 4

Emerging issues

By the 1995/96 season a degree of stabilityhad formed in Gisborne’s export organicindustry. HWL had found reliable sources

of both demand and supply and, while the latterremained considerably smaller than the former,there was a momentum of grower conversionswhich seemed irreversible. Many technical barri-ers had largely been overcome and those farmerswho had initiated the process of conversion in theearly 1990s had increasing areas of fully certifiedland. Extension of organic methods from sweet-corn to other crops had begun and growers whohad initially started with sweet corn had diversi-fied into peas and squash. This diversification,however, has been accompanied by potentialinstabilities in the structure of Gisborne’s exportorganic sector and these as well as other emergentissues are the foci of this chapter. While the out-look for organics is undoubtedly more favourablethan it is for Gisborne’s conventional sector, thereis some evidence presented below which indicatesthat it may not be immune to many of the prob-lems typical of conventional food productionsystems.

4.1 Complementary andcompeting firms: the impact of anincreasing range of companiesinvolved in organic exporting

The first set of issues concerns the nature ofinter-firm competition in Gisborne’s exportorganic industry. Although HWL dominatedproceedings from 1992 to 1995, firms that alsoestablished organic production around 1992 haveexpanded that production in recent years and anumber of other firms have entered the industrysince that time, further diversifying the array oforganic foods available for export. Some of thesefirms have proven complementary to HWL’s

agenda; others have directly competed with HWLfor growers and the supply of produce.

4.1.1 Synergies between companies inorganic production

Gisborne is one of the largest export regionsfor squash in New Zealand. However, becausesquash are simply packaged in boxes prior toexport, most of the companies that export squashfrom Gisborne District do not have significantplant or offices locally in the region. Under the1987 Horticultural Export Authority Act, the NewZealand Buttercup Squash Council was given the“authority to enforce conformity to an approvedmarketing plan amongst growers, packers andexporters of squash” (Perry et al. 1997:293). How-ever, this authority does not give the Council anexport monopoly, and squash exporting compa-nies have a relatively high degree of freedom.Generally, companies involved in the exporting oforganic squash tend not to compete with compa-nies that export organic sweet corn. Five compa-nies have become involved in the exporting oforganic squash from Gisborne: S.C. Murphy Co.,Fresh Co., Strongmore Exports, Cox Co. Ltd andSunrise Coast NZ. Only Sunrise Coast and CoxCo. have an office/packhouse in Gisborne itself.The other companies all use local agronomists andagents to obtain contracts from local growers. S.C.Murphy – the company that exports the mostorganic squash from Gisborne – uses AgricultureNZ for crop procurement and monitoring. In1996/97, it exported 200t of organic squash grownin Gisborne, almost all of which was sent to acooperative supermarket in Japan (Interview 4). Italso exported organic squash from the Bay ofPlenty, Manawatu, Hawke’s Bay, and Canterburyregions. All of the companies that export organicsquash from Gisborne source product from morethan one area (Interview 6).

The price premium for organic squash isshown in Table 4.1 and is higher than that fororganic sweet corn (see Table 3.1). However, withadditional costs in terms of hand weeding and aless reliable yield, the gross-margin premiums for

squash and sweet cornare in a similar range.Like HWL, the fivecompanies involvedshow a marked ten-dency to source squashfrom long-establishedgrowers who convert toorganic production(Interview 6), but theyalso show a desire tocontract produce fromorganic sweet corngrowers who seek arotation using squash.

Conventional 330 – 255 –

Organic 680 106% 350 37%

Price premiumover

conventional

Gross marginpremium overconventional

Price per tonne Gross marginper tonne

Regime

Table 4.1: Average price paid (in $NZ) and gross margins for squash, GisborneDistrict, 1996/97. (Data supplied in Interview 7 and relates to a study of theprices paid by the three largest exporters of organic squash which source pro-duce in Gisborne District.)

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These growers have achieved comparable yieldsto established organic squash growers (Interviews4, 7).

According to the export managers and agrono-mists interviewed, HWL and squash-exportingcompanies have cooperated in determining themedium-term organic strategy for GisborneDistrict (Interviews 1-8). A mutual understandinghas developed wherein it is accepted that the idealproperty will have roughly equal areas in organicsweet corn, peas and squash. This cooperationreflects the fact that sweet corn and squash pro-duction are mutually compatible. The advent oforganic squash exporting has helped HWL over-come rotational problems with its growers. It hasalso helped HWL attract growers who are worriedabout supplying only one processor or packer.Growers who are fearful that HWL Gisborne mayclose are less concerned about entering organicproduction given that they will have more thanone crop to grow and more than one buyer fortheir harvest. Even though the pool of BIO-GROcertified land is small, HWL and squash exportersdo not always compete for the same plots ofland23. As one grower states, “After you’ve grownsweet corn for two or three years on the samepaddock, its either squash or fallow so with thoseoptions we’ll always have at least 20-30% of theproperty available for squash” (Interview 18).While the move to organic pea production forHWL has increased these options, a number ofgrowers commented that HWL agronomists stillrecommend that they grow squash for anothercompany (Interviews 18, 20, 21).

4.1.2 Competition between companies inorganic production

These types of synergies also developed in theother two case study areas, but perhaps thisreflects the fact that few organic exporters in eitherCanterbury or Bay of Plenty are in direct competi-tion with each other for established growers. InBay of Plenty, for example, the organic industry isdominated by Zespri International Ltd. which, asit has a monopoly, experiences no local competi-tion from kiwifruit exporters. In Canterbury, anumber of synergies developed, as is especiallyevident in the relationship between HWLChristchurch and Only Organic NZ Ltd. HWLregards the difficulty in constructing a full organicrotation for its growers as a significant barrier to

the long-term viability of its organic strategy. OnlyOrganic has utilised the pool of growers devel-oped by HWL Christchurch and has created newcrop options for those growers to incorporate. Thisstabilises the supply base for HWL’s key crops byproviding growers with a more secure outlookand the ability to rotate crops, a situation which isalso beneficial for Only Organic. That companyalso purchases a small amount of HWL rejectswhich have failed visual quality criteria forexporting, but can be successfully processed intobaby food (Interview 1). While these kinds ofsynergies are characteristic of the other casestudies, Gisborne provides one example of directcompetition between organic exporting compa-nies. For the coming season, competition overland certified for organic sweet corn will be part ofthe local dynamic in Gisborne’s organic industry,due largely to one company’s desire to furtherdiversify its strategy for organic production.

Sunrise Coast is a Gisborne business whichformed in 1982 to sell oranges within the domesticmarket, but it has since emerged as an importantexporter of a number of horticultural products. In1986, it started to export squash and five yearslater it exported its first consignment of organicsquash grown in Gisborne. In other seasons, thecompany has also exported organic potatoes andcarrots which were sourced from other parts of thecountry. By 1997, 90% of Sunrise’s activities werein the export market (Interview 6) and it hascreated a secure niche as a counter-seasonalexporter. Its strategy has been to develop a systemof contract horticulture, which incorporates someof the logic of the ‘just-in-time’ approach, so as toreduce the time between orders being placed inJapan and the fulfilment of those orders by grow-ers in New Zealand (Interview 3). The companyhas committed itself to flexibility, especially interms of discovering new market niches thencontracting appropriate growers to produce forthose niches on an annual basis. A significantproportion of the food supplied to Sunrise Coast isgrown on leased land: a flexible form of tenurewhich reflects the company’s emphases on flex-ibility and responsiveness to changes in consumerdemand. Part of this strategy is to dovetail withthe system of direct sourcing favoured by its Asianclientele. For this reason, the company gives itsclientele as much say as possible over the natureof the product and the way it is grown, andSunrise Coast imports Japanese seedstock so their

23 Some squash growers have employed MAF Quality Management field officers to act as quality control agents for theorganic standards which the Codex Alimentarius Commission is presently finalising for organic production. The commission is apart of both the World Health Organisation and the Food and Agriculture Organisation and is an auditing and standard settingbody which aims to harmonise inter-governmental standards for trade. The inter-governmental debate on the Codex organicstandards is currently deadlocked. However, with the significant role given to the Commission by the Uruguay Road Agricul-tural Agreement and especially the World Trade Organisation Agreement on Technical Barriers to Trade (see Campbell andCoombes forthcoming), its standards are likely to become increasingly important for the global trade in organic products. Al-though they are slightly less stringent than BIO-GRO NZ’s organic criteria which follow closely IFOAM standards, it is believedthat a gross-margin premium which is close to that for BIO-GRO certified squash can be obtained by organic growers producingsquash under the draft Codex standards.

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produce more accurately reflects Japanese foodtastes.

This system has led the company to have agreater interest in organic products, which theyexport to Japanese cooperative supermarketchains. Sunrise Coast’s interest in cropping in-creased and diversified through the marketingand exporting of processed corn powders forCedenco in the early 1990s. Later in the decade,Sunrise sought to further develop its own process-ing facilities and invested considerable assets indeveloping a process for retort pouche packagingof carrots and sweet corn. Retort pouche productshave an outwardly similar appearance to vacuumpacked foods. However, the significant differenceis that they are cooked in their flexible plasticpackaging, with equal pressure applied inside andoutside, resulting in a shelf-stable form thatremains fresh for twelve months. Although theprocess yields relatively expensive and individu-ally-wrapped corn cobs, Sunrise Coast has ex-ported over eight million pouched cobs in the lasttwo years (Interview 3). There are a number ofdifficulties involved in the process. First, pouchinghas to occur within twelve hours of harvest,leading to a special need for coordination ofgrowers, harvesters and the processor. Second,because the product is sold as a whole cob intransparent packages, crop quality has to be highand there is a relatively high rejection rate (Inter-view 6). Whereas HWL break down cobs intokernels and can therefore manage cobs withseveral GVB-spoiled kernels, Sunrise Coast rejectcobs that have more than two such kernels. Asecond factor is that Sunrise Coast uses bi-col-oured supersweet varieties which reduces thepossibility of developing synergies with HWL.Because HWL’s markets demand uniformlyyellow kernels, there is no potential for HWL topurchase rejects from Sunrise Coast to use inprocessed products.

The pouching process has recently beenregistered with BIO-GRO NZ, and Sunrise Coastactively courted organic growers during thespring of 1997 (Interviews 17, 18, 20). Therein liesthe potential for competition in Gisborne’s organicindustry. In the 1998/99 season, Sunrise Coast’sorganic operation is set to increase, and it isalready the second largest organic exporter in theGisborne area. But it is less the size of the compa-ny’s organic plans than its desire to obtain organicsweet corn growers that will engender this compe-tition. The company faces the same difficulties

that HWL experienced in 1992 in terms of convinc-ing conventional growers to convert, but has oneoption that HWL did not have when it started itsorganic sweet corn operation: to attract growersalready established in organics. Sunrise Coast arerelatively open about this being part of theirstrategy to increase their pool of organic suppliers(Interview 3), but also argue that their long-termstrategy for increasing the number of contractedsweet corn growers who are BIO-GRO certified isto convert their existing conventional growers.While HWL will not perceive the latter strategynegatively, the company believes that the formerstrategy is largely unfair, with companies “free-riding” on HWL’s investment in research and theGOWW campaign (Interview 1). One HWLagronomist argues that “Sunrise aren’t assistinggrowers to convert with a technology transferprogram and they aren’t putting anything backinto the industry” (Interview 8).

In contrast to this, Sunrise Coast claims that itsstrategy reflects “ordinary competition in the foodindustry” because it is “doing little more thanoffering growers a better contract”24 (Interview 3).Because the pouching of sweet corn demands thatthere are no visual blemishes – whereas thecriteria for processed sweet corn are more tolerantof cosmetic variation – it is also true that therequisite skills for growing for each process aredifferent enough for some growers to specialise inone but not the other. Nevertheless, the initialreactions of sweet corn growers who are alreadycertified suggest that most new and establishedgrowers will sign contracts with both companiesand it remains to be seen what the outcomes ofthis situation will be. Furthermore, it is necessaryto remember that sweet corn is just one of anumber of BIO-GRO (and SunGreen25) organicproducts that Sunrise exports. More significantly,however, the company also counters the claim thatthey are not providing a technology transferprogram. While little of Sunrise’s R&D expendi-ture is targeted directly to BIO-GRO organicproduction, growers producing under the BIO-GRO label will undoubtedly benefit from researchfunded by Sunrise for its SunGreen project. Forthat project, Sunrise has established researchfarms and has evaluated varieties and techniquesto grow crops without chemical fertilisers. This issignificant because, as is shown later in thisChapter, organic growers now perceive soilfertility to be the most substantial threat to thelong-term sustainability of organic sweet corn

24 In reality, Sunrise offers a similar price for organic sweetcorn to that of HWL. However, some of thesweetcorn growers who were interviewed believed that Sunrise’s pouched sweetcorn was a better advertisementfor organics than HWL’s frozen sweetcorn because it emphasises some of the reported marketing advantages oforganic food, especially its brighter colour and “fresh” image. Even if HWL and Sunrise offer the same price fororganic sweetcorn, growers commented that they would offer some of the their produce to Sunrise because “we’dlike to help grow Sunrise’s organic effort as more organic sweetcorn buyers means more security” (Interview 17).

25 See Section 4.1.3.

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production.The issue of technology transfer vis-à-vis

competition for organic suppliers is very impor-tant in terms of the future for organic productionin New Zealand. The competition for certifiedgrowers has many similarities to the perennialproblems of other highly competitive systems forhorticultural commodities, but organic supply isunique in one important respect: its basis in highlyskilled production which takes some time to learnand establish. Consequently, issues of skill devel-opment may become increasingly salient in thefuture evolution of organic production inGisborne. As competition for supply and certifiedland increases, companies might consider it to beno longer prudent to engage in technology trans-fer without some more formal control over pro-duction26. Alternatively, the local industry mightbegin to reproduce the pattern in Canterburywhere grower networks are a major locus of skilldevelopment (see Liepins and Campbell 1997), butso far there is little evidence that this will be thecase.

Whatever the outcome, the introduction ofcompetition between Sunrise Coast and HWL forthe procurement of organic sweet corn raisesimportant issues for the future. The immediateimpact of the two companies’ activities inGisborne is that growers have more choice andpossibly a better bargaining position. However,this comes at the cost of a slightly reduced level oftrust and cooperation between the growers andthe purchasers of their product. While increasedcompetition for supply will impact on the proces-sors/exporters (as was negatively instanced by theimpact of Cedenco on other horticultural proces-sors) it is not known whether HWL are able toincrease the price for organic sweet corn in over-seas markets to offset higher payouts to theirgrowers. While competition for supply has impor-tant implications, should Sunrise Coast, or otherfirms, start competing in the same destinationmarkets with the same products, the implicationswould be much more serious. Even without anydirect competition in destination markets, how-ever, the competition for organic growers has thepotential to cause instabilities in the structure ofthe Gisborne industry. It may substitute mistrustfor the close working relationship between grow-

ers and processors which has, thus far, proved tobe a requisite for the successful development ofexport/commercial organic production.

4.1.3 SunGreen: towards alternativecertification systems for organicproduction

One of Sunrise Coast’s more recently formu-lated strategies for organic production may provemore controversial. For several years, the com-pany has experimented with low-input produc-tion regimes, certifying squash under the Codexsystem and using low-residue produce to dovetailwith the ‘green’ labels of the Japanese supermar-kets that it supplies. However, its managersbelieve that a highly marketable product is onethat lies between the low-input/IPM approachand the essentialist stance adopted by BIO-GRONZ on organic criteria. While the company isexpected to further increase the amount of BIO-GRO certified squash and sweet corn that itexports from Gisborne, it has also established itsown certification system for “organic” food – theSunGreen label – and has invested considerableresources in its development. 1997/98 was the firstseason in which the label was used, withSunGreen squash and sweet corn being exportedto Japan. SunGreen is both a stand-alone organiclabel and a scheme which certifies produce thatcan be absorbed within the green labels of super-markets in Japan. There are a number of similari-ties and differences among the criteria forSunGreen and BIO-GRO organic production:

• Both BIO-GRO NZ and SunGreen insist that nochemical fertilisers, fungicides, insecticides orherbicides are used on crops. Thus, both sets ofcriteria include a list of naturally occurringsubstances which can be used as substitutes formanufactured chemicals (eg. garlic and pyre-thrum mix as a substitute for a conventionalpesticide). This list forms part of a written codefor organic production which Sunrise Coast,like BIO-GRO NZ, distributes to contributinggrowers.

• Whereas BIO-GRO NZ uses its own inspectorsto audit growers, Sunrise Coast uses inspectorsfrom MAF Quality Management (MAFQual)27

26 A solution for organic processing companies could potentially be found in lease arrangements. In someforms, leasing may remove the potential for “leakage” from significant investments in human resources. Somecompanies may prefer to lease land and have their own employees grow crops. Employees trained in organicproduction by their company are less likely to migrate to other companies than annually-contracted growers/independent land owners who benefit from the technology transfer programs of one company and then signcontracts with another on the basis of higher prices. See also Sections 3.3.2 and 4.4.2

27 MAFQual is a state owned enterprise formed out of the pre-existing inspection services provided by theMinistry of Agriculture and Fisheries (MAF). MAFQual earns revenue by providing ‘quality’ management andinspection services. While there is still a tenuous relationship between MAFQual (a state-owned enterprise) andthe remaining divisions of MAF (a government ministry), this will cease in the near future with the full privatisa-tion of MAFQual.

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as a third-party auditor for SunGreen. Theauditing process includes visits to the proper-ties of growers in the scheme, contributingpackhouses and Sunrise Coast itself. It alsoincludes checks of the necessary documenta-tion and chemical residue testing in order forMAFQual to verify that the crop meets thecriteria set for the SunGreen program.

• BIO-GRO NZ certifies growers not only on thebasis of their land and produce but also on thebasis of their commitment to organics. Conse-quently, growers have to convince BIO-GROinspectors that they intend to eventually certifyall of their property. Conversely, the SunGreensystem is a seasonal certification of a grower’scrop, rather than a label which requires a long-term commitment to organics.

• The main difference between the two systemsis that, whereas BIO-GRO NZ insists on a 2-3year transition/conversion period betweenconventional production and full registration,there is no such transition period for SunGreen.When a grower either loses certification ordecides to pull out of BIO-GRO, they will beforced to endure another transition period for asubsequent re-certification. Because SunGreenis a seasonal certification system, growerswould be allowed to apply a conventionalfertiliser in order to restore soil fertility afterharvesting of the main crop. Furthermore,growers are given a considerably greater levelof flexibility to decide which of their paddockswill be used for SunGreen or conventionalproduction. Thus, a typical supplier to theSunGreen label may annually rotate paddocksfrom SunGreen to conventional production inorder to maintain soil fertility and crop yields.

Sunrise Coast’s desire for a range of organiclabels reflects a number of forces which are moti-vating the company:

• Supposedly, there are “degrees of organic” inJapan – 100%, 70% and 50% organic thresholdswith which consumers are familiar (Interview6). In turn, these thresholds are said to reflectthe expressed food tastes of contemporaryJapanese consumers which are influenced lessby a broad environmental philosophy andmore by food safety issues (Interview 3). Thismeans that there is the potential to market anarray of “organic” lines, and produce grownunder the SunGreen criteria will be sold inJapan as “organically grown”. BIO-GROorganic produce is believed to satisfy only onesegment of the Japanese ‘organic’ market.

• The use of MAFQual to underwrite the pro-gram is revealing. The Japanese importationbureaucracy is wary of any label which is notsupported by an exporting government’sagricultural ministry28. Therefore, “BecauseBIO-GRO isn’t government supported there isonly a limited opportunity to market its labelon our produce in Japan. People over therewould like to see ‘MAF’ stamped on theirorganic food – but they don’t” (Interview 3).

• A considerable advantage of the SunGreenlabel for Sunrise Coast is that its growerswould not have to go through a 2-3 yearconversion, as is the case under BIO-GRO NZ.Rather, contracts could be made which reflectthe company’s desire for flexibility and ‘or-ganic’ output could be more easily increased ordecreased to meet market demands on anannual basis. Likewise, as so much of theproduce exported by Sunrise Coast is grown onleasehold land, there was need for a greaterdegree of flexibility than is evident in BIO-GRO’s criteria for certification29.

• In Section 4.2.4, it will be shown that a numberof BIO-GRO organic sweet corn growers areconcerned about the sustainability of theiroperations. Initially, the prospect for weed andpest infestation formed the most significantperceptual obstacles for the conversion ofconventional growers. More recently, thepotential for declining soil fertility on organicsweet corn and squash properties has worriedgrowers who are close to converting. Theability to apply conventional fertilisers overwinter months and to alternate yearly betweenSunGreen and conventional production may behighly appealing to growers wary of BIO-GRO’s more strict requirements. While only sixGisborne growers were contracted for theSunGreen program for 1997/98, this representsa more promising start than HWL’s first year oftheir plan to convert conventional sweet corngrowers to BIO-GRO production.

Several aspects of Sunrise Coast’s plans willconcern other stakeholders in the organics indus-try. The SunGreen label is only one of a number ofrecent approaches which companies have used tosell produce as “organically grown” in the Japa-nese market but without BIO-GRO certification.Some companies have taken advantage of therelatively loose definition of organics in Japan byselling Codex certified squash to supermarketswhich then claim it to be organic. Given that theJapanese government is planning to develop anational standard for the use of the term ‘organic’

28 BIO-GRO certified produce has only been allowed access to Japan because of the organisation’s establishedlinks with IFOAM and because it has been known in Japan for several years. Nevertheless, continued access to theJapanese market in the absence of governmental backing is periodically questioned by Japanese importing officials.

29 See Section 4.4.2.

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– partly in response to pressure from consumers’groups and cooperatives who are concerned aboutthe looseness of the use of organic labels – thisstrategy might be a better reflection of the currentstate of the Japanese market rather than its futureform. Nevertheless, it is unlikely that the Japanesegovernment will adopt an essentialist definitionfor organic production, so food produced underthe SunGreen label may still pass through Japa-nese food and border regulations. Although foodgrown under Sunrise Coast’s eco-label would fallwell short of the strict requirements of BIO-GRONZ, it may, therefore, be considered a legitimateorganic product in Japan. Sunrise Coast bothadmitted and desired that SunGreen would bemore flexible than BIO-GRO’s standards.

One of New Zealand’s larger frozen vegetableprocessing companies also attempted to create itsown organic label for the 1997/98 season. BecauseBIO-GRO and the Organic Products ExportersGroup30 are presently petitioning the Minister ofAgriculture about this case, few details can bedisclosed. However, because of restructuringwithin MAF over recent years – which has de-creased the Ministry’s regulatory powers andincreased its role as a facilitator of ‘market ori-ented’ agriculture – there is some doubt as towhether it will attempt to limit the proliferation oforganic labels. Indeed, the fact that MAFQual haslegitimised SunGreen in the view of Japaneseconsumers by auditing the label shows that onepossible direction for MAF is already apparent. IfMAFQual agents continue to underwrite alterna-tive certification schemes with the blessing ofMAF RA, the Ministry may become a force whichnot only allows the proliferation of organic labels,but actively encourages it.

One difficulty with such a stance is that therange of organic labels in Japan may confuseconsumer groups. Interestingly, when asked iftheir plans might cause confusion in the Japanesemarket over the ‘legitimacy’ of individual labels,managers from Sunrise Coast replied that, “Asexporting is a system of relationships betweenexecutives, you don’t necessarily have to be BIO-GRO certified to be known as organic – you justhave to be trusted” (Interview 3). The companyalso claims that the differing perceptions of‘organics’ in Japan will absorb a number of alter-native organic labels, each with a different inter-pretation of organic production in its certificationcriteria. It remains to be seen whether theseinterpretations are ultimately valid.

There are two other difficulties with theproliferation of organic labels which are poten-tially more serious. First, the solidification of BIO-GRO NZ as the main certifying agency in NewZealand has been a context within which conven-

tional growers have more easily taken the stepacross the ideological divide between conven-tional and organic production. If a new range oforganic labels undermines the legitimacy of BIO-GRO NZ in the view of New Zealand farmers,uncertainty may again prevail and the momentumof grower conversions may diminish. It may alsobe true that many conventional growers willwelcome “looser” organic standard and wouldgratefully convert to schemes similar to theSunGreen example. This would also imply that themomentum of conversions to BIO-GRO NZ willbe reduced, yet it has a worthy claim to being themost “legitimate” of potential certifiers for organicfood.

Second, access for organic products to theJapanese market is, and always has been, tenta-tive. This is no better exemplified than by theremoval of access for Chilean organic kiwifruitgrowers to Japanese consumers in 1995. Testing ofcertified organic Chilean kiwifruit revealed fruitwith chemical residues. Consequently, all Chileanorganic kiwifruit was banned for two seasonsuntil the integrity of organic certification andlabelling was re-established. There is considerablepotential for a competing range of New Zealandorganic labels to bring about conflict which mayalso lead to the removal of access for New Zea-land’s organic producers to Japan. This potential isparticularly apparent in the case of “seasonal”labels, under which there is a possibility forresidues in the soil from previous applications ofagrichemicals to contaminate food, even if noagrichemicals are applied directly to the crop.Although Sunrise Coast will, through MAFQual,utilise testing for residues to mitigate this poten-tial, this direction involves far more risks than thealternative practice of 2-3 year transitions em-ployed under BIO-GRO NZ.

In many respects, companies like SunriseCoast are not at fault for their desire to formalternative labels. The main source for confusionlies with MAF. The lack of security for access tothe Japanese market has been brought aboutpartly because that Ministry has not publiclysanctioned one particular certification scheme.There have been several efforts to enlist MAF tounderwrite the BIO-GRO label, but the Ministryfinds itself in an ideological context wherein anyintervention in the market is not a popular direc-tion. The Ministry’s new emphasis on a profit-oriented consultancy service has also limited thepossibility of it legitimising BIO-GRO NZ. Atpresent, MAF will not support BIO-GRO NZunless it receives a financial reward but organicgrowers already complain about the level ofcertification fees and these would have to rise ifMAF insists on such financial rewards. Yet, Japa-

30 A group set up to foster the exportation of organic food. The OPEG is partly funded by industry and partlysupported by government as a Tradenz Joint Action Group (JAG).

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nese consumers would be less wary of organicproduce grown in New Zealand if the NewZealand government legitimised a national stand-ard. In the view of this report’s authors, industry,governmental and academic support should betargeted to BIO-GRO NZ. The independence ofthat organisation from market or political interfer-ence and its strong links with IFOAM render itslegitimacy with international consumers relativelyunquestionable. Such legitimacy will becomeincreasingly important if the international trade inorganic food is to continue.

4.2 Grower concerns relating toGisborne’s organic industry

In many respects, sweet corn growers wel-come the competition between HWL and SunriseCoast, believing that it may increase organicpremiums. However, growers have several otherconcerns about the direction that the industry istaking and these relate to:

• Opportunity costs of organic production aswell as the costs of organic inputs and, giventheir limited availability, contractors specialis-ing in organic methods;

• Falling returns brought about by reductions inthe organic premium, and the variability oforganic yields;

• Long-term issues concerning whole propertyconversion and whether or not they shouldabandon one year’s returns in favour of afallow;

• The extent to which organic growers caninfluence processors/marketers and the or-

ganic market.These concerns apply mostly

to sweet corn growers and, as thatgroup represent the significantproportion of growers, theseissues are examined in detail.However, all such issues haverelevance for the other organicsectors in Gisborne District.

4.2.1 Contractors, inputsand costs

The first concern was raised byseveral growers and involves thecost of organic inputs. In theory,the premium offered by HWL iscalculated in a way which com-pensates the average organicgrower for increased input costs.

Thus, growers are largely buffered from theincreased cost of organic inputs. Yet, as onegrower comments: “Why should growers put upwith input prices that are higher than they shouldbe. Sure the grower gets a premium but the largestpremiums seem to go to suppliers of organicpesticides and fertilisers” (Interview 22). Giventhat organic growers evaluate all costs in relationto conventional production a comparison is madeof the two cost regimes in Table 4.2.

As is indicated in Table 4.2, total costs perhectare are, on average, higher and amount to a40% greater cost for organic compared to conven-tional production. Such averages, however, masksome of the specific input problems experiencedby growers. The most frequent complaint relatedto the price of fish fertiliser which is relativelyexpensive, but at least one grower claimed that ithad: “Almost no noticeable effect compared tourea, so isn’t worth the money” (Interview 17).The garlic and pyrethrum mix used as an organicpesticide provides the largest single input cost.The average application is 8l/ha with two spraysper season and current prices of $320 for a 20ldrum. This compares with the much lower appli-cation rate and lower price of a typical conven-tional pesticide, though on a conventional prop-erty as many as four spray applications occur in aseason. However, the main cost problem of or-ganic pesticides and fertilisers relates to escalatingcosts in poor seasons. All the organic sweet corngrowers interviewed noted that, while conven-tional properties have to apply little extra fertiliseror chemicals in a cold/wet season some organicgrowers feel they have to double their applica-tions31.

Increasingly, as some sweet corn growers

Table 4.2: Typical Costs per ha (in $NZ): Organic vs ConventionalSweetcorn Production (Sources: HWL Gisborne Gross Margin Re-port on 1997 Crop; Interviews 1, 8, 18). *Where appropriate, theseinclude labour time at standard rates per hour.

Cost item * Conventional Organic

Cultivation 508 740

Seed and Planting 232 218

Fertiliser 238 484

Weed Control 164 80

Pest and Disease Control 43 176

Other 0 36

TOTAL 1185 1734

31 It may well be obvious that there is need for extra fertiliser applications when plant growth is stunted bypoor growing conditions. However, in cold weather, plants remain at a growth stage where they are more suscepti-ble to attack from pests for a longer period of time, requiring extra organic pesticides.

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convert a higher percentage of their property,there is a need for specialist machinery for organicproduction. Three growers have already boughtinter-row weeders costing over $10,000 each and asimilar price is paid for spider-weeders. Somehave found their tractors unsuitable and havereplaced them with specialised or newer models,and others complained of apparent duplication ofequipment, especially the need for separate spraygear to apply conventional and organic mixes ondifferent parts of their property. A small numberof contractors specialising in organic methodshave become established in Gisborne District.Such contractors – especially those that applyorganic pesticides – usually have to be BIO-GROcertified and given that few have gone throughthe process, those that have charge high hourlyrates. It may well be that as more growers enterorganic production the cost of contractors andspecialised inputs and machinery will reduce. Atpresent, however, growers believe that the returnon their investments is relatively poor.

Most growers agreed that labour time effec-tively doubled, largely because of extra cultivationand mechanical weeding. Again, this was particu-larly the case in bad growing seasons, whengrowers not only had to weed more often but hadto spend a considerable amount of time monitor-ing their crops for pests. While the organic pre-mium appears to make up for these costs in thelonger-term, growers repeatedly highlighted theextra costs in both labour and inputs that occur inbad years as being difficult to manage. They alsopoint to increased stress levels, which are causedby a greater degree of uncertainty, that are notnecessarily experienced by conventional growers.There are also problems with opportunity costs.Some growers believe that they are not adequatelycompensated in the organic price structure fortheir inability to graze stock over winter. Onegrower will leave the industry this year, partlybecause he is able to obtain $500/ha for wintergrazing if he abandons organic production (Inter-view 22).

4.2.2 Variability of yield and reductions inpremium

Of course, in a bad year conventional produc-tion also declines and growers who produced bothconventional and organic sweet corn pointed outthat yields decreased by about the same amount(Interviews 17, 20). Some were surprised that thishad been the case and had expected organic yieldsin a bad season to reduce by a considerably higherproportion vis-à-vis conventional yields. However,even if yields for organic and conventional grow-ers reduce by equivalent proportions and costs per

hectare do not increase disproportionately for theorganic properties during a bad season32, thereduction in profit is larger for the organic pro-ducer. This is because costs are (at best) fixed at aconstant rate per annum and for organic growersthey are fixed at a higher rate (Table 4.2). So, in ayear with reduced yields, costs are a dispropor-tionately higher percentage of total revenue onorganic properties.

The notion of the ‘average year’ also plays apart in growers’ evaluations of their progressunder an organic regime and this has at timesbecome a contentious issue. While some growershave been able to obtain close to or above theaverage of 14t/ha for organic sweet corn, onegrower’s yields have decreased each year to thepoint where he had a yield last year of only 6t/haand he will abandon organic sweet corn for 1997/98 (Interview 22). Yet another problem in poorseasons is a higher rejection level at harvest, eventhough HWL rejects few cobs (Interview 17). Themore crucial discussion of expected yields occurswhen HWL agronomists meet on a face-to-facebasis with growers. Nevertheless, ‘average’ datafor organic versus conventional production –which is now published in the form of a five-yearly cumulative mean because the HWL sweetcorn operation has lasted for long enough for asuitable collection of data – has been reportedtwice by HWL in GOWW newsletters. In bothcases, however, the data were for single seasonsand evaluated a relatively abundant harvest.Growers contend that there are two issues ofconcern:

• The variability among organic sweet corngrowers is more marked than is the case forconventional production;

• Inter-seasonal variability is greater for organicproduction.

The first issue probably relates to the fact thatsoil fertility is much more important as a deter-mining factor in sweet corn yields than it is forother organic crops. Under a conventional regime,urea and other artificial fertilisers can level-out thediffering skill levels among growers and thediffering levels of natural fertility on individualproperties, reducing variability so that conven-tional sweet corn properties tend more closelytowards the average of 18t/ha. Because thesmoothing function of artificial fertilisers cannotbe used on organic sweet corn properties, andbecause organic fertilising systems take both timeto establish and skill to perfect, there is a muchgreater potential for variability from the mean,especially at such an early stage of HWL’s organicsweet corn operation.

32 As has already been suggested, there is some evidence that organic costs do increase relative to conventionalcosts in a bad season.

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This problem is further accentuated by the factthat the sample of organic sweet corn growers issmall and, with two of the largest Gisborneproperties also being highly productive comparedto the rest, the resultant mean may be skewedtowards the maximum. In time, with the solidifi-cation of systems for organic fertilisers and withgrowth in the number of suppliers, the problem of‘averages’ may reduce, but it is likely that therewill always be a greater degree of variabilityamong organic growers as compared to the casefor conventional growers. The conventional meandoes not mask variability among conventionalproducers to the same extent that the organicmean obfuscates variability among organic pro-ducers. Because this logic is not particularly clearto growers, an ex-conventional grower who hasfor a long time produced under conventionalconditions will expect to come close to the meanfor organic production after conversion, but this isnot assured. Now that HWL has moved to a meancreated on the past five seasons of data, inter-seasonal variation will be better accounted for inthe data that it publishes. Furthermore, some ofthe concern about inter-seasonal variation can beaccounted for by the fact that the season immedi-ately prior to interviewing was particularly coldand wet.

Nevertheless, some growers have claimed thatthe averages which were initially published anddiscussed by HWL agronomists have been thebasis on which they converted. Consequently,when some growers failed to reach an expectedaverage, they begin to question their continuedparticipation in organic production. While thesame problem of ‘averages’ probably exists for

conventional growers who fail to produce averageyields, the remedies for organic growers require amuch longer-term development of managementtechniques and skills rather than the short-termcontingency of increased inputs common toconventional production. Consequently, the issueof ‘average’ production levels has become a sourceof frustration for some organic growers.

In most respects, growers make decisions onthe basis of gross-margin analysis, rather thanonly on price information and simple averages. Agross margin (per hectare) analysis of organicagainst conventional production is presented inTable 4.3. The table shows that despite changes in1996/97, there is still a significantly higher grossmargin for organic sweet corn production com-pared to that for conventional production. With agross margin per hectare premium of 38% in theperiod 1992/93 to 1995/96, organic growers withrelatively poor land could afford to grow at underthe 14t/ha average yield.

However, the single most significant com-plaint from growers relates to the reduction inprices for organic sweet corn for the 1996/97season and the effects of that reduction are alsoevaluated in Table 4.3. For that season, HWLreduced its organic price per tonne by 18% to$210/ha, but it also reduced its conventional priceby the same percentage. While many growersrecognised that currency movements had ad-versely affected market prices, what most con-cerned them was that both organic and conven-tional prices decreased by the same amount. Thekey difference between conventional and organicsweet corn was that world demand for conven-tional sweet corn was declining relative to organic,

Table 4.3: Gross Margin (GM) Analysis of HWL Sweetcorn: Organic Production vs Conven-tional Production and 1996/97 Price Reductions. (Sources: HWL Gisborne Gross Margin Re-port on 1997 Crop.; adjusted for longer-term conditions with information from Interviews 1, 8,18, 20, 22) * See Table 4.2

Yield (t/ha) 18 18 14 14

Price ($) per t 140 115 255 210

Change in price per t -18% — -18%

Income ($) per ha 2520 2070 3570 2940

Costs* ($) per ha 1190 1190 1735 1735

GM ($) per ha 1330 880 1835 1205

Change in GM per ha -34% — -34%

GM premium per ha over conventional 38% 37%

Conventional Jubilee Organic Jubilee

Average1992/93-1995/96

Average1992/93-1995/96

ExpectedAverage1996/97+

ExpectedAverage1996/97+

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yet both prices were reduced for growers. Whilethe price setting process in a large corporation iscomplex and opaque, there were two identifiablefactors behind this decision to link the prices.First, organic and conventional sweet corn areoften linked in HWL’s marketing strategies forJapan, making a price slump in one influential onthe pricing of the other33. Second, the primarydifficulty influencing HWL revenue was not onlychanging demand but fluctuations in the NewZealand dollar. The latter declined dramaticallyrelative to the yen in 1996/97, leaving HWL withtwo options: either increase prices in destinationmarkets (which they believed would compromisethe long-term market position) or reduce pay-ments to growers.

Despite these explanations, many growerswere not convinced and were understandablydissatisfied. One suggested that:

“Watties had no reason to reduce thepremium because they still get the same pricefor organic sweet corn in Japan. Sure, they hadto reduce the conventional price because theprices they receive for it went down, but theydid not have to reduce the organic premium –they’re just taking more profit from it”(Interview 18).

Regardless of the validity, or lack thereof, inthis argument the premium for organic producersrelative to conventional production is almostidentical in the period after organic price reduc-tions. While the average gross margin per hectarefor organics reduced by 34%, the relative premiumfor organic produce remains almost the samebecause of the equivalent reduction in grossmargins for conventional sweet corn (Table 4.3).HWL suggests that these trends will continue intothe future – both sets of prices will fluctuaterelative to demand for sweet corn lines but therelative advantage in organics will be retained(Interview 1, 8).

Nevertheless, the organic price reductionshave partially soured relations between HWL andits growers34. Consequently, despite the relativepremium remaining the same, these reductions innet income, and also the uncertain future for theHWL Gisborne plant, have reduced the loyalty ofsome of the core organic growers to HWL. Onegrower refused to accept a contract with SunriseCoast because of the assistance that he receivedfrom HWL to establish his organic sweet cornproperty (Interview 19). Others said that theywould have been similarly loyal to HWL – mainly

because of the degree of technical and, occasion-ally, financial assistance given in earlier years –but, because of the price reductions, would acceptoffers from Sunrise Coast (Interviews 17, 18, 20).Growers also point to other factors to justify theirreduced loyalty to HWL. Several stated that thelevel of technical assistance from the companywas once exemplary but has since reduced to whatthey consider unsatisfactory levels. Many repeatedthe notion that “Watties only offered us a highlevel of support at the start to get us hooked intoorganics…Since getting us hooked we haven’tbeen helped at all” (Interview 18). This concern isperhaps acting as an outlet for other deeper issueslike net income, as HWL offers all growers free-on-request access to an agronomist, but admit thatpro-active advice is targeted towards new growers(Interview 2).

This situation reflects the evolution of organicproduction in both Canterbury and Bay of Plenty.In both those regions, companies engaging in theinitial development of organic processing and/orexport enjoyed considerable grower loyalty forseveral years, especially when the initial marketwindfalls for organic products were passed on.Then, with a reduction in premiums and/or thedevelopment of alternative outlets for organicproduce, growers either parted company with theoriginal businesses or protested over a range ofgrievances. For the NZ Kiwifruit MarketingBoard, this phase was seemingly short lived as itspremium and net returns for organic kiwifruitincreased markedly in the 1996/97 season, effec-tively silencing most critics and perhaps pinpoint-ing the real source of their discontent. However,the Board is a monopoly and in sectors wherecompetition is more open, the long-term loyalty ofgrowers – which is very important given thesizeable investments in human resources (“up-skilling”/technical transfer) required for organicproduction – may become an important issue. InCanterbury, the best example of this dynamic isactually a grower cooperative/processor andthese issues remain unresolved as grower pay-ments are still a matter of contention betweengrowers and the processor.

In conclusion, it is evident in the Gisbornecase, as well as in the other study regions, thatthere are positive aspects to the relationshipsbetween organic growers and their processors,with the potential for considerable good ººwill todevelop, particularly in the development of neworganic growers and technology transfer. How-ever, these relations are not immune to many ofthe stresses and pressures that characterise the

33 See the comment on organics as ‘keyhole’ products in Section 3.1.1.34 This was, of course, also the case with conventional suppliers. However, it might be argued that they are

more frequented with such fluctuations. This was the first major reduction in price for organic sweetcorn producersand their dissatisfaction probably relates to their initial beliefs that organic prices would be more stable than thosefor conventional production.

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production and processing of other, conventionalcommodities. This becomes particularly evidentwhen financial returns for organic productsdecrease. While the results from the differentregions are similar in that all growers react nega-tively to declining returns, the long-term out-comes of this disenchantment seem to vary byregion. Gisborne is particularly significant as it isthe first region where growers have mobilised toattempt to control returns35. Possible explanationsas to why the Gisborne growers differ from theircounterparts will be discussed in the next section.

4.2.3 Grower involvement in processingand marketing

A tendency which is related to concerns overfalling prices for sweet corn is that organic andconventional sweet corn growers are increasinglylooking for new outlets for their produce. Somehave shown interest in forming their own compa-nies to take on more responsibility for arrangingdownstream processing and marketing, and this isnot only restricted to sweet corn growers. Forexample, Leader Brand Products Ltd. developedlargely out of the success of one grower whoproduced a range of vegetables – capsicums,potatoes, onions, broccoli, tomatoes and squash –for both fresh-market and processing industries(Interview 5). Through the 1990s, the manager ofLeader Brand became the largest single horticul-tural grower in Gisborne District, owning 1000haand leasing a further 2000ha. He was New Zea-land’s largest tomato grower and had a closerelationship with Cedenco but, when Cedenco’stomato processing facility closed, the companysought to diversify its options36. It has initiatedplans to convert land to organics, with the inten-tion to grow organic squash on 30ha, and has alsoshown interest in producing organic broccoli inthe off-season. Previously, Leader Brand’s squashhas been exported by Sunrise Coast, but it has alsoat times exported some of its own produce andbelieves that there may be further potential toexport its own organic lines to Japan under theLeader Brand label. Whether this occurs or not, itis the manager’s belief that scale economies willenable the company to get a better deal withexporting companies (Interview 5).

While Leader Brand provides an example ofhow conventional growers have recently restruc-tured their activities, similar developments hadalready occurred locally in the organic sector.Managers from the three largest organic sweetcorn properties, along with a new entrant tohorticulture, formed the company Kiwi Organics

in 1996. Like Leader Brand, Kiwi Organics wasalso formed with the belief that scale economiescould provide leverage in the organics market.Indeed, the company has already had somesuccess in obtaining such leverage. Its memberssuccessfully negotiated a higher rate for thetransitional squash grown on all four properties inreturn for selling fully certified squash on two ofthe properties to the same exporter. With organicsupply limited, the pooling of produce from anumber of farms into large consignments providesan added incentive for exporters to give KiwiOrganics special attention. The aims of the com-pany are:

“To have it driven by the grower. We’retrying to get some power back to the farmer. Imean we are price setters rather than pricetakers – that’s going to be a basic principle ofthe group because so many farmers just takewhat’s given. We want to have a bit of controland we’ll only grow things if we know whatwe are going to get for them” (Interview 21).

While all four growers intend to maintain theirrelationship with HWL, the formation of thecompany has led to increased diversification ofthe types of produce grown. The group is about toinvest in equipment for pressing organic linseeds(Linum usitatissimum) to oil and for making pow-ders and purees from organic kumara (Ipomoeabatatus), sweet corn and squash. This will allow itsmembers to add value by processing their ownproduce in the winter. They have already suc-ceeded in pooling equipment, with one growerowning a much-valued but highly expensiveharvester which he also uses on the other proper-ties (Interview 20).

There is a degree of naive optimism in thesuggestion that growers can be “price setters”. Inthe history of capitalist agriculture, growers’cooperatives have seldom been able to influencethe market, although well organised groups cansometimes exert leverage on the returns generatedby processors and exporters of high value goods.What currently distinguishes Kiwi Organics fromother attempts to organise growers into ‘pricesetting’ structures is that, because the company’smembers own the major part of certified organicland in Gisborne, they have some control over thesupply of organic sweet corn and squash – pro-duce which requires a considerable skill-factor forits production. Consequently, it is difficult forpurchasers of their products to easily substitutefrom other sources. Evidence from wider agricul-

35 There have been episodes of organic grower rebellion against the NZ Kiwifruit Marketing Board in the early1990s, but these have since subsided.

36 Leader Brand now grows no tomatoes, but the land on which tomatoes were grown is now devoted to othercrops.

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tural developments suggests that, in the longterm, a proliferation of suppliers to market nicheseventually undermines these kinds of attempts tocontrol the ‘price setting’ process. On balance, thedevelopment of this type of company reflects thefact that organics is slowly heading in the samedirection as other agricultural spheres, withskilled growers increasingly attempting to co-operate with each other in response to limitedpower in the market. Their long-term success inmaintaining such attempts remains to be seen.

4.2.4 Long-term issues: fertility vspremium and total conversion of property

As a case study area, Gisborne can be usefullycompared to the developmental path taken inother regions. This section highlights three signifi-cant differences between Gisborne and otherregions, all stemming from the fact that no signifi-cant organic industry existed prior to the develop-ment of exporting. These three issues are:

• Relations between growers and BIO-GRO NZ;• The need to balance returns against fallowing

periods;• Whole conversion of properties.

The latter two issues apply, in particular, tosweet corn growers. While their motivations forconverting to organic production will be discussedin detail in Chapter 5, for the purposes of theimmediate discussion it is important to note thatorganic sweet corn growers appear to be morepragmatic and driven by the desire for premiumsthan some of their colleagues both in Gisborneand in other regions who do not produce sweetcorn. This is especially so in the case of a smallgroup of growers. While this group is not numeri-cally large, they represent a large proportion of thetotal volume of organic food produced inGisborne and, therefore, their position requireselaboration.

The first of these issues is the relationshipbetween growers and BIO-GRO NZ. In everyother region, some growers expressed discontentat some aspect of BIO-GRO NZ’s operation. Thislevel of discontent has become an accepted featureof the industry37. To date, Gisborne growersappear to have had good relations with BIO-GRONZ, and commented that the BIO-GRO certifica-tion procedures were simple to follow andstraightforward to grow under. This raises anintriguing question which cannot be elaborated onhere, but warrants further consideration at a laterdate. Namely, to what extent is lingering discon-tent with BIO-GRO NZ in other regions attribut-able to long-term debates and conflicts overorganic growing in each region? As a region,

Gisborne was a blank slate in terms of organichistory and BIO-GRO NZ is perhaps able tooperate there unfettered by past conflicts. Thepositive tenor of current relations may not lastforever. As an independent certifier, BIO-GRO NZmay be called on to make decisions in the futurewhich greatly displease some growers, and thefollowing two issues will warrant close attentionin forthcoming years.

The first is the possibility that pragmaticallyoriented sweet corn growers – primarily interestedin premiums – may exploit soil fertility for short-term profits, rather than protect their soil forlonger-term sustainable production. Because ofthe pioneering nature of organic sweet cornproduction in Gisborne District, there is somedebate as to how long growers can produceorganic sweet corn in individual paddocks beforethere is a requirement for a summer fallow (eg. inclover). In Section 3.3.1, it was explained thatsweet corn depletes nitrogen from soils at arelatively high level for an organic crop and thatthere had been some controversy over the fallowrequirements for organic sweet corn. This contro-versy quickly receded after the first two seasons asgrowers succeeded in using a green manure cropover winter. However, with some growers havingnow produced organic sweet corn in the samepaddock for five seasons, the issue has once againbecome salient. Although rotational options arenow available, some growers were reluctant toutilise them because they would not receive thesame revenue as they do for organic sweet corn.Furthermore, it is possible that there will come atime when a summer fallow will have to be builtinto the medium-term plan, because rotation ofcrops alone will be insufficient to protect soilfertility. One grower, having noticed progressivereductions in yield on some areas of his property,has already placed three paddocks into clover forthe 1997/98 season (Interview 19). Nevertheless,while they recognise the need for this require-ment, other sweet corn growers are delaying sucha fallow until it is either absolutely necessary, oruntil BIO-GRO NZ compels them to in order toretain certification. Given the level of the organicpremium, they would miss out on a considerableamount of revenue, but this will surely lead tosome conflict with BIO-GRO NZ.

A second issue that relates to the longer-termstrategies of growers is the requirement underBIO-GRO NZ for total conversion of properties toan organic regime. One of the significant changesin the practice of the BIO-GRO board in the early1990s was the acceptance of partial conversion ofproperties as a stepping stone towards full conver-sion. Although there are no rigid time-criteria set,and while it is allowable to certify paddock bypaddock, it is the stated intention of BIO-GRO NZ

37 In fact, some would argue that this was also the case in the 1980s.

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that individual growers should be in the processof converting their entire property. While mostGisborne sweet corn growers appear satisfied withthis situation, some have no intention of doing so:

“We are really using the organic thing –because of the premium – to get the farm ingood order before my son takes over. Youknow, we’ve also expanded with more [stock-grade] maize production over the hill. Youcan’t get an organic premium for [that] sothere are parts of the property that we neverintend to convert. Then you’ve got to think ofthe hill sections where we have stock. Maybeone day you could get a premium for organicbeef, but not today. There’s no way an owneron a mixed property would want to certify thefull property. We aren’t even intending tocertify all the sweet corn land…” (Interview20).

BIO-GRO NZ were aware of this type ofproblem and suggested that out of all of theregions it was most prevalent in Gisborne Districtand especially with sweet corn growers (Interview25).

In combination, the issues of fallowing andwhole-property conversion concern only a portionof the sweet corn growers, but because of theirpreeminence within the local organic industry thatgroup warrants further discussion. Three possi-bilities are open to these growers. The first is thatthey will respond to declining returns caused byfertility depletion by exiting from organic produc-tion. Chapter 5 discusses this option in moredetail. A second possibility is that growers that arecurrently pragmatically oriented will undergo‘progressive conversion’, adopting more of thewider goals of organic production as they con-tinue to participate in the industry. This hascertainly happened to many growers who wereinitially pragmatists in other regions, particularlythe Bay of Plenty. Indeed, there is some evidencethat this has in part occurred in Gisborne. Whilethis possibility exists, BIO-GRO NZ will not, in theshort term, initiate punitive measures againstthese growers. However, initial signs are thatsome sweet corn growers in Gisborne are resistingwider changes in their outlook. Should thissituation persist into the medium term then thethird option will take force: BIO-GRO NZ willprobably revoke their certification.

It is difficult to pinpoint exactly why thissituation has emerged in Gisborne. Three factors,however, might need to be addressed by the localindustry to avoid a conflict over certification inthe future:

• The lack of any organic history obviouslycontributes to this situation. Unlike otherregions, Gisborne has only recently formed an

organic grower body and a lack of growernetworking in the past needs to be remedied. Itis revealing that few of the commercially-oriented sweet corn growers have joined theTairawhiti organic producers and consumers group,even though some of the other export growershave become members.

• The importance of premiums is a contestedissue among companies, growers and BIO-GRO NZ, and even within the promotionalstrategies of companies like HWL. In Canter-bury, GOWW details on premiums and averageyields did not result in growers adoptingpragmatic responses to issues of long-termsustainability. In Gisborne, the same GOWWmaterial resulted in the opposite outcome forsome sweet corn growers, with the organicpremium perceived by them as the main reasonfor conversion. This may hold wider implica-tions for the extension of organic developmentto other regions with no prior history of or-ganic production.

• The issue of ‘progressive conversion’ – inwhich initially pragmatic growers start toadopt wider organic goals – is vital for allorganic producing regions and must play amajor role in determining the rapidity withwhich the BIO-GRO inspectorate acts to with-hold or revoke certification. The degree towhich Gisborne growers experience a level of‘progressive conversion’ will become apparentin the next few years.

Whatever the case, it appears that the notionof an organic premium as it has come to be under-stood by Gisborne growers is a dynamic whichhas encouraged some growers to exploit soilfertility in the short-term, possibly at the expenseof longer-term sustainability. This may be animportant lesson for companies desiring to estab-lish an organic program through the conversion ofits conventional producers. It appears that the waythe organic premium is initially sold to andperceived by growers is a crucial element in long-term sustainability of the organic industry.

4.3 Emergent organic industriesin Gisborne DistrictPotential conflicts over the process of BIO-GROcertification are also noticeable in some of theemergent organic industries in Gisborne District,but these stem from very different causes to thosefor sweet corn. Although BIO-GRO NZ has a“catholic attitude to all production spheres” thatcan be incorporated under its auspices (Interview25), it has thus far tended to deal mainly withvegetable producers and with some fruit growers,particularly kiwifruit orchardists. Perhaps for thisreason, its organic criteria are sometimes difficult

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to apply to potential organic industries that falloutside of this norm. In this section, three emer-gent industries – deer, wine and ‘exotic’ fruits –are examined. Local innovation and near sub-tropical growing conditions, which were exploredin Chapter 2, make the Gisborne District a site forthe evolution of new primary industries. It isnotable, however, that the first people to attemptcertified organic production in Gisborne were adeer farmer and a viticulturist. Yet, it is those veryindustries which have had the most stuntedevolution of all the production sectors to experi-ment with organics.

4.3.1 Venison and velvetAlthough this series of reports mainly con-

cerns horticulture, organic venison farmers in thedistrict were interviewed because of the relativeuniqueness of their operations38. Generally, themeat production sectors have been the slowest toadopt organic production methods in New Zea-land. Consequently, the BIO-GRO standards formeat production are still evolving. However, thevenison industry has, since its inception, beentargeted to niche markets, so it is likely to moveinto organics more quickly than other meat sec-tors. In Gisborne, two farmers made movestowards organic husbandry of deer, representingsome of the first primary producers to considerthe export of organic meat. Significantly, boththese farmers have since abandoned their theirattempts to produce certified organic venison.While one still hopes to continue under an organicregime and awaits changes in the industry whichwill permit re-certification, the other has aban-doned deer farming altogether. Difficultiesbrought about by the structure of the deer indus-try as well as difficulties meeting the BIO-GROstandards were seen as the prime reasons for thefailure of organic deer farming.

The first farmer to attempt the production oforganic venison was also HWL’s first organicsweet corn grower39. Generally, this farmer has aphilosophical commitment to organics, but he alsodesires to prove that organic deer farming can beconducted in a profitable manner (Interview 23).The second farmer decided to convert to organicproduction because of a concern about the effect ofdrenches on overall stock health and also becauseof the influence of a business partner who wanteda high-value and niche-oriented agriculturalinvestment to which he could apply a marketingdegree (Interview 24).

For both farmers, three barriers need to beovercome: parasite control, industry infrastructureand problems with taking velvet under organic

certification. Given that parasites only occur inone year out of a deer’s lifespan – after weaning –there is some hope that the first problem can beovercome. Both have experimented with a mixtureof cider, garlic concentrate and seaweed which,while administered in the manner of a drench,does little more than act as a tonic. In the initialseasons, both had concerns about convincing MAFveterinary staff that they were not being undulyinhumane to stock. Under MAF legislation andthe BIO-GRO standards, farmers can be pros-ecuted or de-certified for failing to come to the aidof distressed stock, including stock badly infestedwith parasites. Because the general health of theirstock was good, neither had encountered thisdifficulty, but this issue highlights some of theinfrastructural difficulties for farmers of organicstock which do not apply to organichorticulturalists.

After considerable research on how deer werefarmed in Europe during the 1930s, the secondfarmer decided that “old fashioned managementtechniques of keeping clean, good quality pasturein front of the deer” adequately countered theeffects of not using drenches (Interview 24). Forthe long-term, the first farmer wants to experi-ment with a mixture of wormwood (Artemisiaabsinthium), black walnut (Juglans nigra) andcloves (Syzygium aromaticum) that will act as a trueorganic drench. This would be permitted underBIO-GRO NZ rules. Initially, however, bothgrowers found it difficult to apply BIO-GROcriteria to their operations. Because of the relativenovelty of organic deer farming and the amount oftime devoted by BIO-GRO NZ to developingstandards for major organic products, it is possiblethat the BIO-GRO standards for pastoral farminghave not evolved as far as those for horticulture.For this reason, one farmer only certified hisproperty under BIO-GRO after abandoning thedeer industry to grow crops.

While many technical issues appear to havebeen overcome, the inability of the farmers tomarket their venison as organic has been theirultimate difficulty. Like other producer marketingboards, the Game Industry Board has a monopolyon marketing. The two growers involved suggestthat the Board is very progressive compared toother such Boards, but has not yet established anexport organic line. The Board argues that whilethe demand might be sufficient there is not yet thevolume of supply to warrant such a move. Ofcourse, this stance further dissuades farmers fromconverting to organics and so further restrains thegrowth of supply. Both the organic deer farmersinterviewed argued that because the Board isprogressive, it would eventually establish an

38 Initially, they were chosen for interviewing because of their early role in organic sweetcorn production, butthe information they provided on the organic deer industry was too important to leave out of this report.

39 See Section 3.2.1.

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organic line. Nevertheless, in the meantime, theBoard’s ambivalence has severely affected themerit of being organic for the two farmers. Be-cause they could only sell their produce as organicon the national market, they failed to receive thefull premium which is potentially open to themthrough exporting. Not long after the secondfarmer abandoned deer farming, the first pulledout of BIO-GRO NZ certification because “therewas no economic benefit in being BIO-GROcertified if I had to export my venison as conven-tional” (Interview 23).

These infrastructural difficulties are amplifiedfor the case of organic velvet. The market fororganic velvet is potentially large because its mainuse is in health food remedies, and those inter-ested in such remedies show a marked tendencyto buy organic produce. However, MAF criteriastate the need for an anaesthetic to take velvet,and anaesthetics are not permitted under BIO-GRO NZ standards. While there are humanemethods for taking velvet without an anaesthetic,these are as yet not permitted under either MAFor BIO-GRO regulations. The two organic deerfarmers made formal requests to the Game Indus-try Board, asking that it negotiate with MAF toallow these methods. However, there are specificpolitical issues which have prevented the Boardfrom being proactive in this case:

“In most European countries it’s illegal totake velvet: they consider it inhumane, whichis an emotive argument not based on anythingat all – but it’s good for us because it reducesthe amount of velvet on the market. It does,however, provide some ammunition for theanimal welfare lobbyists and potential tradebarriers. It’s a politically sensitive issue andit’s not something you can rush. So with thatas a context, the organic velvet thing is goingto take a long time” (Interview 23).

In the second report from this series(Campbell et al. 1997), it was established that theKiwifruit Marketing Board acted in a mannerwhich accelerated the uptake of organic kiwifruitproduction. However, the opposite can also betrue of producer marketing boards. Those boardswith an ambivalent attitude to organics, especiallywhen they have a monopoly in marketing, caninhibit the growth or organics, as is shown by thecase of the Game Industry Board. Similarly, it isnot always easy to be industry pioneers in organ-ics when the development of organic standards forindividual products is at an early stage.

4.3.2 Wine from organic grapesGiven that it is generally consumed by people

with a high disposable income, there is a strongpotential premium for wine produced from

organic grapes (Vitis vinifera) because such peopleare able to pay an organic premium. Wine produc-ers also have the ability to market the identity oftheir wine unlike many other food or beverageproducts because the product typically travelsfrom winery to table in the maker’s bottle. Conse-quently, there is added scope for marketing anorganic identity for wine. However, this marketpotential is seldom realised because of the difficul-ties of growing grapes, which are particularlysusceptible to fungal and pest infestation. Tradi-tionally, viticulturists have been dependent onhigh quantities of lower-order fungicides. Asresistance has built up to these, however, there hasbeen increasing use of even more environmentallydetrimental chemicals, including the use of sys-temic fungicides. Compared to other horticulturalindustries, there is a relatively higher degree ofscepticism in the wine industry as to the ability ofgrowers to produce organic grapes (Interviews 15,16). Regardless of this scepticism, two growershave succeeded in establishing an organic regimein Gisborne District and have been rewarded withconsiderable premiums.

The first established his organic regime in1984, and was the first certified organic grapegrower in NZ. Utilising some Biodynamic/Steinerist methods, he produces Chardonnay andRiesling on 25ha (Interview 16). He also owns hisown winery and now sells 15,000 cases of organicwine each year, with his largest single buyer beingan English supermarket chain. The other organicviticulturist makes a small amount of organicPinot Noir, but most of his organic grapes areblended with non-organic grapes sourced fromother properties and, consequently, his wine is notsold as organic (Interview 15).

Both argue that strictly they produce “winefrom organic grapes” rather than “organic wine”because it is not yet possible to make wine inGisborne without a preservative, usually sulphurdioxide. International organic standards - includ-ing BIO-GRO - allow for up to 110ppm of sulphurin organic wine. This is a more than sufficientlevel to preserve the growers’ wine, so theircaution about their product relates to their ownperceptions of what organics should be ratherthan their inability to meet specific criteria. De-spite their caution, both sell their product asorganic. Australian viticulturists have recentlypioneered a system of making organic winewithout sulphur dioxide, but have done so onland with a much lower pH level than is evidentin Gisborne District. It is difficult to abandon theuse of sulphur dioxide on soils with a high pH,because high alkalinity will advance the oxidisingprocess (Interview 16). Both growers contendedthat the requirement for less than 110ppm ofsulphur was one of the few specific rules that BIO-GRO has for viticulture. One complained that “the

35

standards for BIO-GRO in relation to a vineyardaren’t that specific, but that actually makes themmore prohibitive” (Interview 15).

Vines are also attacked by powdery mildew(caused by the organism Uncinula necator) andmealy bug (Pseudococcus longispinus). The formercan be managed under an organic regime withapplication of sulphur; the latter can be broughtunder control by use of garlic and pyrethrum, butonly on relatively healthy vines. On vines understress – which is generally the case in the yearsafter grafting of rootstock or in particularly wet ordry years – mealy bug is extremely difficult tocontrol on an organic basis (Interviews 15, 16). Interms of soil fertility, viticulturists have the exactopposite problem to most organic growers. Soilnitrogen must be kept to low levels as the objec-tive is to grow fruit not leaves. Fertility on bothproperties was managed simply by compostinggrass cuttings and prunings. In order to lower thelevel of rapidly available nitrogen in the soil,growers also plant oats and chicory between rowsof vines to take nitrogen away from the roots ofthe vines and also to absorb excess water.

Both were convinced that it was possible toconvert most established vineyards to organicproduction. However, they also contended that itwas extremely difficult to start a new vineyardunder organic criteria. With a larger demand forhis wine than he could supply, the first growerattempted to certify a new vineyard on a hillsidefrom 1989 but could not successfully control aweed problem. He believed that, “In retrospect itwas only economical to run that using herbicides.I tried a line-fed weed cutter but even that did toomuch damage to the vines” (Interview 16). Theproblem of establishing a new organic vineyardrelates mainly to the transplanting and grafting ofrootstock. It is usually seven years before a newvineyard will reach adequate vine health andproduction. Transplanted rootstock comes understress in those years, and, in a stressed state, thefirst grower’s vines were attacked by mealy bug,but the allowable soaps, oils and pyrethrum andgarlic mix failed to make a difference. Frustratedby two years of such problems, he used Applaud –a conventional insect growth regulator – on someof the vines. Reprimanded for this in 1994/95,when he used Applaud again in the subsequentyear, his BIO-GRO certification was revoked – anotable event because the past successes of thegrower with a difficult crop had brought consider-able legitimacy to BIO-GRO NZ on the nationallevel (Interview 25).

The grower’s reasoning behind this breach ofrules is also notable:

“BIO-GRO hardly kicked me out. I

committed ‘suicide’ on purpose. I knew theywould kick me out if I used Applaud again,but by that stage I believed that I no longerneeded BIO-GRO. Success in the winebusiness is based on personal knowledge ofthe viticulturist’s label and winery. I hadgained a good reputation for producing greatwine and everyone knew it was organic. Sowhy bother with BIO-GRO? There was alsothe fact that neither the Wine Institute norBIO-GRO support the development of organicwine. I thought that our reputation wouldcarry us through and I wasn’t going to changethe organic production process because I’mcommitted to Steinerist philosophies. Butwhen the European market found out theysaid ‘Hang on we only bought your winebecause it was certified organic’. So now I’m inthe process of getting the certification back40”(Interview 16).

The other grower also commented on the lackof support from the Wine Institute of New Zea-land as being a fundamental problem. Withouttheir endorsement, and without endorsementfrom any of the large-scale wine producing com-panies, few growers are convinced to go organic.Some wine varieties are made by blending grapesfrom several vineyards, so even though both thesegrowers have their own wineries, they cannotmaximise the throughput of their wineries or thecomposition of their wines. This is particularly thecase for the second grower because he has only8ha of organic grapes but needs grapes from over50ha to derive the best capacity for his winery. Atpresent he sources grapes from eight other grow-ers and while he “offers a premium to thesegrowers to go organic none of them will do sowithout an industry lead” (Interview 15). Becauseof these problems he will not renew his BIO-GROcertification for the coming season but will never-theless continue to produce grapes under anorganic regime. He believed that the fees paid toBIO-GRO provide no financial benefit because itwas difficult for him, a small grower, to market hisproduce as organic overseas without a WineInstitute marketing campaign for organic wine. Hehad also experienced too many problems withspray drift – to which grapes are particularlysusceptible – to continue to be certified as organic.

Both growers have more hope for an Inte-grated Wine Production (IWP) scheme, whichmirrors the low-input approach of Kiwigreen forkiwifruit (see Campbell et al. 1997). The firstgrower has signed up his troubled hillside vine-yard and the second his entire vineyard for thisscheme. It is based on a score-card system devel-oped in Switzerland, and is therefore a voluntary

40 The grower’s certification status has now been restored.

36

system which seeks to reduce post-emergencesprays as well as reduce other fungicide andherbicide residues. Whereas the evolution oforganic wine has floundered, the two growersbelieve that IWP will be successful because thelarge company Montana has encouraged itsgrowers to become involved. Montana have atarget of no herbicides on all its grower’s proper-ties within three years, showing the extent towhich wine producers are prepared to act to meethealth and safety concerns in the market.

In recognition of the potential for marketaccess problems in the long term, the Wine Insti-tute has initiated an industry-wide response. Onecause of this change occurred when its motto –‘the riches of a clean green land’ – received badpress in overseas media, especially in a Canadianpublication which stated that New Zealand wineshad the highest level of residual fungicides in theworld (Interview 16). Nationally, 130 growershave already agreed to the IWP program whichwill start in full during 1997/98. With the prospectof even more growers becoming involved in thisproject, the two organic growers in Gisbornebelieve that they can only stand to benefit. First,they will be able to source more low-input grapeswith which they can blend their own grapes andcan then market the result as an alternative totheir organic wines. They even suggest thatgrowers will use the IWP program as a steptowards full organic production. Second, theybelieve that the IWP program will lead to muchlower levels of spray drift.

Despite the move towards IWP, developmentof organic production within the wine industryhas experienced similar difficulties to the case oforganic venison and velvet. Wider structuralfeatures of the wine industry affect the pursuit oforganics by small and medium sized viticulturists.Although the Wine Institute is not a monopolymarketer, its reluctance to formally endorseorganic production has undoubtedly restrainedgrowers from converting their vineyards. Further,both viticulturists in Gisborne District could notdevelop their wineries to the extent desiredbecause they could not obtain organic grapes fromother growers for blending. In the case of wineproduction, a high level of structurally-necessaryinter-dependence among growers has acted as abarrier to the development of organic production.

4.3.3 ‘Exotic’ Fruits: towards both organicand green labelling

The previous section suggests that someindustries may see a more rapid development oflow-input systems than organic systems. This mayespecially be the case for large industries with aproducer marketing board, such as the kiwifruit

industry. But it may also apply to smaller, niche-oriented industries such as those of exotic fruits.As is the situation for wine, many such fruits areconsumed by wealthy consumers and so they maydesire to pay extra for low-input or organicproduce.

This is already the case for the persimmonindustry on the East Coast. Gisborne is one of onlya few districts in the country where persimmonscan be grown commercially because they requirerelatively hot summers. Generally, the Japanesepersimmon tree is grown in New Zealand, yield-ing a red-orange fruit of high quality and com-manding a high price. The advantage that persim-mons have for organic growers is that the fruit isproduced in a manner which is close to organicfrom the start. Persimmons have relatively fewproblems with pest infestation and so few chemi-cals need be applied (Interviews 4, 10). They arerelatively low-yield and so cause few problemswith soil fertility. Organic persimmon orchardshave proven popular with lifestylers, especiallyretirees desiring a low-fuss and small orchard butwith high profitability to act as retirement income.Consequently, organic persimmon orchards inGisborne District tend to be small. Currently, 3orchardists produce organic persimmons on 16hain Gisborne. They are exported mainly by one firmwhich specialises in niche products.

Mandarins also grow well in Gisborne District.Although there are as yet no organic growers, thepresident of the local branch of the FruitgrowersFederation believed that “some growers are veryclose to converting” (Interview 10). This is forsimilar reasons to those growing organic persim-mons. Mandarins are also grown in a mannerclose to organic production when grown conven-tionally. Except for weed control and the occa-sional use of fungicides, very few chemicals areused. Although Japanese growers produce enoughmandarins for the fruit to be one of Japan’s fewexport crops, the Japanese off-season dovetailswith the Gisborne growing season. Several man-darin growers also grow kiwifruit. Although everykiwifruit grower in Gisborne is now in theKiwigreen program, none are yet organic (Inter-view 4). This is set to change for the comingseason. Kiwifruit production grew rapidly inTolaga Bay during the mid-1980s, but with theclosure of the Tolaga Bay packhouse, only three ofthe original sixteen kiwifruit orchardists remain41.All three of these growers will convert to anorganic regime from next season (Interview 17). Itis inherently costly for them to transport their cropto Opotiki to be packaged. To make up for thiscost, the growers now seek an organic premium.

Many other fruit growers are signing up foranother low-input system, the locally organisedEco2000 initiative. Eco2000 was established toshowcase Gisborne District sustainability pro-

41See Section 2.3.

37

grams for the year 2000 celebrations (Interview11). In that year many executives from globalcompanies will visit New Zealand after the Syd-ney Olympics (Interview 10). It is hoped that thisprogram can merge with other tourism initiativesto advertise local organic and low-input indus-tries. So far the program has gone little furtherthan educative and knowledge-transfer objectives,but has nevertheless proven popular withorchardists. Its objectives are working in parallelto the government and industry funded nationaltrust – Project98 – which has similar objectives offostering low-input agriculture and horticulture.Tradenz is helping to promote Eco2000 and hopeto have it confirmed as a Hanover exhibition(Interview 11)42. Organisers of Eco2000 suggestthat it has been far easier to convert growers to themerits of the project than it is to convert them toorganics because there is not the 2-3 year conver-sion period inherent in BIO-GRO certification(Interviews 10, 11). Undoubtedly, this is because itis far easier to state a preference for sustainableland management than it is to practice it. Never-theless, it seems likely that parallel systems oforganic and low-input horticulture will continueto develop in a mutually reinforcing manner inGisborne District.

4.4 Impediments to the expansionof organic production in GisborneDistrict

Despite the rapid uptake of organic produc-tion by growers in comparison to other regions,especially by sweet corn growers, there are someidentifiable industry-level barriers to acceleratingthe uptake of organic production in GisborneDistrict. Constraints at the grower level will beconsidered in the next chapter. Throughout theinterviews two industry-level impediments wereregularly highlighted:

• The fact that Gisborne does not have a signifi-cant research institute and is isolated fromthose of other centres;

• The general lack of flat land in single titlewhich is accentuated by the difficulties grow-ers experience when attempting to lease landfor organics.

4.4.1 Lack of a research baseThe Eco2000 initiative, which was considered

in the previous section, was established partly outof recognition of a technology-transfer problem inthe Gisborne organic industry (Interviews 10, 11).In both the Canterbury and Bay of Plenty casestudies the influence of local polytechnics or

universities on the evolution of organic produc-tion was shown to be positive. While many of theskills for organic production represent a simpleborrowing of techniques from the pre-chemicalhistory of horticulture, information transfer is akey ingredient in the mix of factors that contributeto a region becoming an important growth centrefor organic production. Lincoln University re-searchers helped growers with such technologicaladvancements as flame-weeders (see Campbell1996). The Tauranga Polytechnic developedseveral biological pest controls and new tech-niques for composting which assisted organickiwifruit growers (see Campbell et al. 1997).

Although Gisborne has its Tairawhiti Poly-technic, that institute is relatively small andcourses in horticulture are limited. No specificcourses on organic methods are offered. Conse-quently, growers complain that they are at adisadvantage compared to growers in otherregions who can hire labourers who have beenwell-trained in organic methods. Some havecircumvented this problem by joining such organi-sations as Willing Workers on Organic Farms(WWOOFers), thereby allowing foreign touriststrained in Europe to work for keep on theirproperties (Interviews 13, 18). Nevertheless, it wasgenerally difficult for growers to attract suitableworkers on a long-term basis. Labour was consid-ered an extremely important issue because, “Youcould have just one ignorant, untrained or lazyemployee ruin your organic status for years”(Interview 15). Gisborne is 300km from the nearestuniversity and 150km from the research station atHastings and some believed that the region’sisolation from research centres was a seriousimpediment to the growth of organics (Interview4). This was especially the case for wine growers:both viticulturists interviewed believed that ifthey had been closer to a research institute orMAF research station then they would haveattracted more research which could have aidedtheir organic regimes (Interviews 15, 16). One ofthose growers has had researchers from MasseyUniversity complete studies on his property in thepast – projects which considered the use of bicar-bonate of soda to control powdery mildew andbiological controls on mealy bug – and foundthese invaluable. However, this research has beencurtailed, partly because of the travel distancesinvolved.

In this context, the technology transfer pro-grams of the larger companies are of immenseimportance. HWL have invested a considerableamount of time and money into organic technolo-gies and biological control measures. Attentionhas been paid by the company to biologicalcontrols and recently it has co-operated with the

42 Hanover is a large expo of sustainability projects from around the world.

38

activities of a Ph.D. student who is examiningmethods of biologically controlling the GVB.However, many of the other companies involvedin Gisborne District are either too small to affordthis level of research commitment, or have not yetapproached any of the government fundingchannels open to small businesses, and the prob-lem of research remains an impediment to thefuture growth of organics.

4.4.2 Leasing and organicsWith the extent of land in multiple ownership,

the issue of leasing for organics has recentlybecome a significant issue in the Gisborne organ-ics industry. Some of the growers who pioneeredorganic production in the early 1990s havereached the point where they can no longer certifyany more land on their own property. Havingbenefited from their early conversion in terms offive or more years of organic premiums, thosegrowers want to expand. However, there is littleland available to buy which could be subsequentlyconverted and leasing is the more obvious route tofollow. One grower who has already certified allthe land on his property is particularly keen tofind land available for lease but has so far beenunable to obtain it (Interview 18). Alongside thesegrowers, HWL itself is showing more interest inleasing land for organics, and at least one othercompany, Leader Brand Produce Ltd., is interestedin registering leased land with BIO-GRO fororganic certification.

There are two difficulties in leasing land fororganics: one concerning the status of leasingunder BIO-GRO NZ and the other concerning theability of Maori with land in multiple-title to leasetheir properties. One interviewee summarises thefirst of these difficulties:

“I think that leasing is a very grey area thatBIO-GRO haven’t made up their mind aboutyet – they don’t know how to deal with it.There’s been a couple of instances lately wherethere was organic land being farmed but notvery well by the landowner. Subsequentlythey’ve lost a lot of money and the bank hassaid ‘well, we’re not prepared to finance youthis year’ and they’ve had to lease the landout. The problem in that case is that when theylease their land they don’t want to lose theircertification. Now, the BIO-GRO certificationis based on property, person and product, soimmediately if you take the person out....You’ve got to find someone who is alreadycertified or can prove that they are suited to becertified” (Interview 12).

The philosophy of BIO-GRO NZ is that organ-ics should be a long-term proposition. Therefore, itis wary of those wanting to lease for organics

because such an arrangement implies a lack oflong-term commitment. One grower has evenexperienced an ambivalent reaction from BIO-GRO NZ to his plans to convert a section that heleases from his wife (Interview 20). Nevertheless,BIO-GRO have some legitimate concerns aboutleasing for organics. It is particularly difficult tosee how the idea of a summer fallow after severalseasons of organic production, or even extensiveuse of crop rotation, could be built into a leasearrangement. Lease contracts are usually depend-ent on a reliable and consistent annual income –there are generally few margins for error in a leasearrangement and land management takes on amore short-term orientation. Therefore, there islittle scope for organic leasing when every fifthyear or so may require a fallow. Consequently, theprospects for leasing are linked to the successfuldevelopment of organic rotations including sweetcorn which may not require a fallow period. WhileGisborne is the first region to trial a sweet corn/pea/squash and green crop rotation it will takeseveral years for it to be confirmed whether it willprovide a viable solution to this set of problems.

These issues are particularly relevant to Maoriland. Under successive Native and Maori Landacts, Maori have only been allowed to alienatetheir land through leasing in certain circum-stances. Under the more recent Te Ture WhenuaMaori Act (1993), restrictions on leasing have beenclarified so that it is now probably easier to leaseout Maori land. However, restrictions still existwhich make the leasing of Maori land for organicsby an alien less than straightforward. Land trustsare not allowed to lease at all and incorporationscan only do so for a maximum period of threeyears. A grower with management control guaran-teed only for three years is only likely to be certi-fied by BIO-GRO NZ if there is evidence that theoverall owning group is committed to long-termorganic production. Furthermore, with the buildup of natural soil fertility – through the use ofRPRs and organic composting – taking about fiveto seven years before peak condition is obtained(Interviews 6, 23), growers would need more thana three year lease to see the merit in committingthe necessary resources to convert. Consequently,there are barriers to successful development ofleasing as a mode of organic development whichare only currently starting to be addressed by BIO-GRO NZ, HWL and local Maori incorporations.

39

Chapter 5

Grower decision makingin Gisborne District

In this study of grower decision making, thegeneral purpose is slightly changed from thatin the earlier studies of Canterbury and Bay of

Plenty. For Canterbury (Fairweather and Camp-bell 1996) and Bay of Plenty (Campbell et al. 1997),the research was unprecedented and generoussamples (43 and 48 cases respectively) of farmersand growers were used to develop decision treesthat represented and explicated how farmers and

growers decide whether or not to grow organicproducts. The decision trees in each study had asimilar overall structure. The results from each ofthese earlier studies have been used to develop adecision tree based on a combination of the twodata sets (Fairweather, ND). Given this priorknowledge of decision making, based on diversetypes of farmers and growers, we expected to findsimilar patterns of decision making in GisborneDistrict since it has a broad mix of land uses whichparallel those in Canterbury and Bay of Plenty.Thus the decision tree should be similar. However,there may be some distinctive aspects of theGisborne District situation which manifest insome modifications to the decision tree. The

general purpose then was tointerview a variety of farmersand growers and identify theirdecision criteria in order toassess how well the existingdecision tree applied toGisborne District. As thefollowing results will show, ourexpectations were justified andthe original decision tree isrelevant to Gisborne District.Some slight amendments werenecessary, and we will showthat these minor changes reflectthe particular situation inGisborne District.

5.1 Existing DecisionTree Applied toGisborne District

The decision tree for theorganic/not organic decisiondeveloped in earlier researchwas found to be relevant to thesituation in Gisborne District,and only minor modificationshave been made. To avoidrepetition of detail from previ-ous reports in this series, thedetails of how this method wasapplied to Gisborne can befound in the Appendix. In thefollowing figures, the decisiontree for the Canterbury study(Fairweather 1996) is repro-duced here. Two new decisioncriteria, which identify addi-tional motivations, are shownin italics. As before, the deci-sion tree comprises three mainparts: the elimination criteria,motivations and constraints.The elimination criteria, if theyFigure 5.1: The organic decision – elimination criteria

1. Don’t know much about organic farming; never really considered it?

[GROW ORGANIC: DON’T](27 cases)

NO (27 cases)

NO (24 cases)

3. Well satisfied with present low inputsystem and not considered organicproduction (not against it either)?

NO (24 cases)

4. Organic farming is not technically orfinancially viable but never really considered it?

5. Organic farming is not sustainable?

NO (22 cases)

NO (22 cases)

Go to FIGURE 5.2

YES(0 cases)

YES(0 cases)

YES(3 cases)

YES(2 cases)

YES(0 cases)

DO NOTGROWORGANIC(5 cases)

2. Well satisfied with present farming system and like or need high yieldsand/or tidy appearance?

40

apply, mean that the grower does not seriouslyconsider organic production and does not groworganic products. The motivations specify themain reason for either growing organic productsor seriously considering growing organic prod-ucts. The constraints identify situations whichmean that growers who want to grow organicproducts are unable to.

Returning to the elimination criteria, Figure5.1 shows that only two were found to be relevantin this study of growers in Gisborne District.Criterion 2 applied to three growers who werewell satisfied with their present farming system,had little need to change it, and therefore had notreally considered organic production. Criterion 4applied to two growers who believed that organicproduction was not technically or financiallyviable even though they had never really consid-

ered it. Figure 5.1 shows also that three criteria(criterion 1, 3 and 5) were not identified amongthe 27 growers interviewed. It is inappropriate toconclude that these criteria are not relevant toGisborne District since the sample is smaller thanin the earlier studies and it may be that a largersample would include growers who would ex-press these criteria. Further, this sample containedlarger proportions of organic growers and proc-essed crop or horticultural growers and smallerproportion of pastoral farmers compared to theCanterbury study. It is amongst this latter groupthat we would expect growers who have littleinterest in, or experience of, organic production.

Moving on to motivations for growing organicproducts, Figure 5.2 shows that all five of themotivations that drive growers to grow organicproducts were identified in the Gisborne District

study. Eight growers adhered toan organic philosophy, onegrower was interested inorganic production as a con-sumer, one grower had experi-enced ill health, three wereattracted to premiums and onehad experienced basic problemswith conventional production.

Figure 5.3 lists criteriawhich, if they apply, drivegrowers to seriously considerorganic production and in-cludes, in italics, the addition oftwo new criteria, (criterion 13and criterion 14). Criteria 11applied to one grower whoused chemicals but preferrednot to use them, while Criterion12 applied to one grower whowas concerned with the soil.New Criterion 13 applied totwo growers who emphasisedthat the market may demandorganic product, even thoughthere may be no actual pricepremium for organic products.New Criterion 14 applied tofour growers who have learnedthat they do not have to sprayso much. This criterion high-lights an important feature ofthe growers’ context inGisborne District: there iswidespread appreciation of thepotential in using fewer chemi-cal inputs. This awareness has anumber of sources. In one case,a grower had kiwifruit and wasaware of the Kiwigreen pro-grams, in another, the wineindustry movement towardssustainable viticulture madeFigure 5.2: Motivations for growing organic

6. Adhere to an organic philosophy and/or concerned for the environment?

7. Interest in organic farming as a consumer; don’t want chemicals in food?

(22 cases)

NO (14 cases)

NO (13 cases)

8. Your self, or member of family or staff,or pet experienced ill health from chemicals?

NO (12 cases)

9. Attracted to premiums or need highervalue products?

10. Experienced basic problems with conventional production?

NO (9 cases)

NO (8 cases)

Go to FIGURE 5.3(8 cases)

YES(8 cases)

YES(1 case)

YES(1 case)

YES(3 cases)

YES(1 case)

GROWORGANIC(14 cases)

41

him realise the potential for reducing chemicalusage. These are examples of industry-levelchanges influencing growers. In another case, thegrower accidentally learned that sprays were notessential at regular and high levels of application,after a contractor failed to apply chemicals. Fi-nally, one grower was a contractor and his obser-vation of organic properties on which he worked

made him realise that organic production shouldbe considered. These four cases all serve to illus-trate an awareness of the potential in using fewerchemical inputs. There are multiple sources of theidea but it is nonetheless a palpable part of thegrowers’ context in Gisborne District.

Criteria 11 to 14 apply to eight growers whohave seriously considered organic production.

However, only three of theseeight go on to grow organicproducts. Criterion 15 applied toone grower who believed thatorganic production was nottechnically feasible, and Crite-rion 16 applied to four growerswho believed that organicproduction was not economic.

Figure 5.4 shows constraintsto the organic farming decision.In the Gisborne District studythere were no constraints appli-cable, so there were no ‘HopefulOrganic’ or ‘Frustrated Organic’growers. This result is notsurprising since the Canterburystudy started with approaches toorganic growers who had con-tacted HWL and expressedinterest in supplying peas. Manyof these enquires were fromorganic smallholders. If similarproportions of organic small-holders were present GisborneDistrict, similar results may havebeen obtained. However, thereality is that the total number oforganic smallholders nearGisborne City is vastly less thanthe number aroundChristchurch, and it would beunreasonable to expect thesecriteria to be an important aspectof decision making in GisborneDistrict. Finally, Figure 5.4 showshow organic growers wouldreact to this hypothetical situa-tion of a decrease in organicpremium. Of the 15 growers forwhich there were premiums,there were three who wouldchange to conventional produc-tion and 12 who would stay withorganic production; two ofwhom would use a combinationof organic and conventionalmethods.

11. Use chemicals but see them as expensive and/or dubious value; prefer not to use them; don’t like sprays?

12. Concerned with soil or increasing humus levels?

(8 cases)

NO (7 cases)

NO (6 cases)

13. Market may demand organic product?

NO (4 cases)

14. Learned that don’t have to sprayso much?

GROW ORGANIC(3 cases plus14 cases earlier)

YES(1 case)

YES(2 cases)

YES(1 case)

YES(4 cases)

NO (0 cases)

CONSIDERED ORGANICPRODUCTION(8 cases)

15. Organic production is not technically feasible

16. Organic production is not economic

YES(1 case)

YES(4 cases)

DO NOTGROW ORGANIC(4 cases)

Figure 5.3: Further motivations and some constraints for growingorganic

42

5.2 Discussion of Decision MakingWhile it is interesting to note that Gisborne

did add two new criteria to the existing decisiontrees, it is equally important to reconcile thefindings from the decision tree with other sourcesof information in the Gisborne District itself. Thefindings from strategic interviews with sweet corngrowers in Gisborne District highlighted concernsabout premiums and a pragmatic approach toorganic production that may cause problems inthe future. In contrast to this, the overall organicgrower group provided a much more familiarpicture with growers generally converting for awider range of reasons.

Two issues, therefore, need to be discussed.First, the unusual features of the wider growergroup, and second, the position of the pragmaticsweet corn growers.

There are two notable responses in the widergroup. Criterion 7 indicates that compared toother regions, there is a low level of demand fororganic food as a motivating factor. This confirmsthe interview findings in Section 3.4 that thedomestic industry for organics did not provide astarting point for organic development. Criterion 8is perhaps even more interesting. All other regions- especially Bay of Plenty - had growers that weresensitive to health concerns relating to intensiveagricultural methods. The low levels of chemical

16. Present occupation takes to muchtimes? (No looking for an organiccrop.)

17. Not yet found organic product or still developing tecnique?

(17 cases)

NO (17 cases)

NO (17 cases)

18. Family commitments and mortgageprevent change?

NO (17 cases)

YES(0 cases)

YES(0 cases)

YES(0 cases)

GROW ORGANIC(17 cases)

20. If premiums decrease in future would you change to convention-al production?

YES(3 cases)

DO NOTGROW ORGANIC

DO NOT GROWORGANIC and STILLLOOKING –

“HOPEFUL ORGANIC”

DO NOT GROWORGANIC –

“FRUSTRATEDORGANIC”

NO (12 cases)

“PRAGMATICORGANIC”

No Premiums2 cases

“COMMITTEDORGANIC”

Figure 5.4: Further constraints for growing organic

43

usage in many Gisborne crops perhaps created afarming environment where health concerns werenot as prevalent.

The pragmatic sweet corn growers are aninteresting exception to the general pattern. Dueto the specificity of answers given in constructingand presenting a decision tree, coupled with thesmall sample size, it is impossible to tag responseswithin the tree by farm type or respondent confi-dentiality would be potentially compromised. It ispossible to comment, that while 3 cases werelisted under Criterion 9 (attracted to premiums)and 2 cases to Criterion 13 (market may demandorganic product), this group was disproportion-ately dominated by sweet corn growers as well asrepresenting a large percentage of the hectares ofcertified organic land in the district. On observingthe decision tree, one industry interviewee (Inter-view 1) suggested that the recent controversybetween growers and HWL over premiums mayhave prompted some growers to disguise theirintentions with regard to premiums, or hadcaused some growers to change their minds aboutwhy they were staying in the industry. While thiscould be construed as a criticism of the decisiontree method, it could equally be argued that itsimply reinforces the need to combine the findingsof the decision tree interviews and the strategicinterviews.

44

Chapter 6

Conclusion: the evolutionof Gisborne’s organicindustry

It is evident from the material presented in thisreport that there are a number of differences inthe evolution of organics in Gisborne District

as compared to that in Canterbury and Bay ofPlenty. Once all four regional case studies in thisresearch program have been completed, a fullcomparison of the various factors working for andagainst the successful development of organicfood production will be presented. In the interim,it is useful to summarise the specificity of theevolution of organics in Gisborne District. Thisgoal is achieved in Section 6.1, while Section 6.2considers some lessons from the Gisborne casestudy that can be applied generally to the organicindustry in New Zealand.

6.1 Key issues specific toGisborne

Some of the factors which distinguish thehistory of organic horticulture in Gisborne Districtcan be attributed to the social, cultural and bio-physical features which were identified in Chapter2. The organic sweet corn growers who are evalu-ated in detail for this report exhibit a distinctivelyautonomous psyche towards organics and it ispossible that the effects of spatial isolation (whichhave – according to some accounts – engenderedself-dependence and initiative in local economicactors) contribute to these attitudes. Likewise,such obvious social problems in the district as thehigh level of unemployment command that anynew form of development is rapidly accepted. Inthis context, it is not surprising that organichorticulture has evolved so quickly in Gisborne: asense of economic frustration, isolation anddesperation is a force which breaks down barriersto what might otherwise be seen as a fringe formof development. In 1991, there were less than 10haof certified organic land in Gisborne, but six yearslater there were over 400ha. Although there hasbeen an increase of certified organic land in allhorticultural areas of New Zealand during thisdecade, the acceleration of conversions inGisborne – despite the lack of any significanthistory of organic production – has been impres-sive. It is highly probable that this trend is alsorelated to the rapidity of agricultural restructuringwithin the district. That restructuring has seen thetransference of land from pastoral to horticulturalproduction, yet it is also associated with a moveaway from mainstream forms of horticulture to

niche production. Although organic horticulturein Gisborne has been largely evaluated in isolationfrom these trends, it is useful to reiterate at thispoint that it is strongly associated with the localmove to niche production.

Above all, however, the form and speed of themove to organic production in Gisborne Districthas been determined by the desires of one particu-lar company: Heinz-Wattie Ltd. Although thedominance of HWL in the local organics industryis no longer as marked as in the period 1991-1995,many of the lasting features of the industry can beexplained by the specific supply and marketingneeds of HWL, especially its need to establishorganic sweet corn production in order to solidifyits overall organic strategy for frozen vegetables.This case study attests to the significant influencethat individual food processing companies canhave on the evolution of organic production, andon the more general trajectories for local economicdevelopment, in rural areas of New Zealand.

Yet, it is also true that the longer-term survivalof organic production in Gisborne – which nowappears to be relatively assured – is also depend-ent on local diversification in terms of organiccrops and fostering synergies among a variety oforganic processing firms. Increasingly, the successof HWL’s organic sweet corn operation is depend-ent on organic squash and pea production. Diver-sification is required for a successful evolution inorganics because it facilitates crop rotation andinspires technological development. AlthoughGisborne’s organic crop industry started from aless advanced position than was the case fororganic cropping in Canterbury, it has alreadyadvanced well beyond the situation in Canterburyin terms of developing a potentially effectiverotation of organic crops. At least in the initialstages of the local evolution of organics, however,diversification has had an even more importantrole: it has led to the establishment of a range ofpurchasers which has, in turn, provided securityfor conventional growers who are otherwise waryabout converting to organic production. Neverthe-less, diversification can – in other forms – lead todestructive forms of competition. Whereas thedevelopment of organics in the other case studyareas has not led to active competition for organicgrowers, there appears to be considerable poten-tial for such competition in Gisborne, principallyfor sweet corn growers.

While the diversification of organic crops,techniques and companies within GisborneDistrict may result in a secure future for organicproduction there, one initially promising form oflocal diversification appears less certain. In theearly 1990s, it may have appeared that local Maorihad a significant role to play in the developmentof organic horticulture in Gisborne: the previoususe and form of management of their land as wellas what some consider to be a collective ethic of

45

sustainable land management may have facilitatedthe Maori adoption of organic production. How-ever, six years of interest shown by local iwi fororganic horticulture have yielded only one exam-ple which can be heralded as a lasting success.Organic farming – like any other form of economicproduction – is not a panacea for the problemswhich face contemporary Maori society. Theseproblems are more structurally rooted, so cannotbe confronted by adopting one form of economicproduction over another: structural change needsto take place in New Zealand society for Maori toadequately take advantage of new economicopportunities in such sectors as organic horticul-ture. In this report, the legal restraint on the use ofMaori land has been highlighted as a particularlydifficult problem for Maori, as it prevents theinnovative use of land in multiple ownership.Given the prevalence of such land on the EastCoast, the resolution of the issue of leasing Maoriland may be a significant determining factor forthe future form of organic production in GisborneDistrict.

Thus far, however, a more significant factor indetermining the characteristics of organic produc-tion in Gisborne has been its terra nullius status interms of organic production at the start of thedecade. In many respects, this is the definingfeature which separates the Gisborne case studyfrom those of Canterbury and Bay of Plenty. Thehistory of organic production in these otherregions was strongly contested and negotiated bya variety of actors – some with a long-standing,ideological commitment to organic productionand others with a more recently-formulated andpragmatic stance. The resultant form of organicproduction in each of these areas reflected bothpositions: a strong emphasis on organic exportingand the need for secure financial returns, tem-pered by an equally strong desire not to compro-mise established principles of organic farming.With an inherent lack of organic production fordomestic consumption in Gisborne, both beforeand after the advent of organic exporting, similarnegotiation and contestation has only occurred toa very limited degree. As a result, a different rangeof attitudes to organics are presented by localmembers of the organic industry in comparison tonewly-converted, conventional farmers in theother case study regions.

This is most obvious in the uniquely localperception of organic premiums, especially interms of the organic sweet corn premium as aprincipal motivating factor in the decision toconvert. In Chapter 5, it was established that thisperception applies only to a small number ofgrowers but, because these growers lead the localorganic industry through the relative size of theiroperations, it has had a significant impact on localattitudes to organics. The terra nullius conditionand the attitude to premiums also account for

concerns over some aspects of organic sweet cornproduction which may cause difficulties betweengrowers and the BIO-GRO inspectorate in future.The highly pragmatic attitudes of some Gisbornegrowers appear to have led them to favour short-term profit over longer-term issues relating to soilfertility. Although growers were initially con-cerned about weed and pest infestation in all casestudy areas, the issue of soil fertility on organicproperties is now more salient and requiresfurther research. Furthermore, some growers havean ambivalent attitude to the issue of whole-property conversion and exhibit less “progressiveconversion” to the wider (philosophical) merits oforganic production than comparable ex-conven-tional growers in either Canterbury or Bay ofPlenty.

6.2 Wider issues relevant to theorganic industry in New Zealand

The way Gisborne growers perceived organicpremiums provides an important lesson forcompanies and institutions with a desire to accel-erate organic production. The process of growerrecruitment and the way growers perceive recruit-ment strategies are both more important, and lesspredictable, than might have been expected.Identical GOWW material produced significantlydifferent results in Gisborne and Canterbury,suggesting that promotion of organics should bemore attuned to regional conditions and localattitudes. Ultimately, the long-term retention ofgrowers will be dependent on a range of factors,not just organic premiums. Satisfaction with, forexample, the level of productivity can only beobtained when growers begin to take a long-termperspective on such issues as soil fertility, nutrient(re)cycling and the nurturing of bio-diversity.Such a perspective implies some form of conver-sion to the wider merits of organic horticulture.Eventually, even the most pragmatic of ex-conven-tional growers will, therefore, have to confronttheir attitudes to horticultural practice. While thepossibility of “progressive conversion” is real, itwould be preferable if this occurs much earlier,even at the recruitment stage. Furthermore,because there is the potential for organic premi-ums to dissipate in the long term, especially iforganic food becomes more mainstream andattracts a greater percentage of growers, premi-ums alone should not form the sole basis of agrower’s commitment to organic production.

This last point leads to the question of whetherorganic horticulture, especially in the highly-commercialised, export-oriented form which isbecoming increasingly important within NewZealand, is ultimately different in its socialmakeup from other forms of horticultural produc-tion. Organic farming has been the recipient of

46

some of the more naive forms of romantic futurol-ogy. Some academics and lay individuals tendtowards the suggestion that organics has someinherent ability to solve all the characteristicproblems of food commodity production: fallingprices, tension between growers/processors,agricultural unemployment, the cost/pricesqueeze, environmental degradation and so forth.While there are undoubted environmental benefitsthat accrue from conversion to organic production,the social organisation of production for organicexporting in New Zealand still closely mirrors thepattern for conventional horticulture. The exportform of organic production in New Zealandretains the basic elements of capitalist commoditysystems which have caused instability in otherfood production sectors. Consequently, it wouldbe naive to suggest that organic production undercapitalism will also be a social panacea for foodcommodity producers.

At present, however, there is one advantagethat organic growers have in terms of their rela-tionships with wider circuits of capital. Given thatdemand for New Zealand’s organic produce ishigh in overseas markets and that relatively fewgrowers who operate on a considerable scale have,as yet, converted to organics, those that have enjoymore downstream control than is typical forconventional farmers. Furthermore, because therequisite skills for organic production – and thefarm-work required for the establishment ofsuitable biological rhythms on organic properties– take a considerable time both to learn and totake effect, the labour of some organic growers is,at present, a highly valued commodity. Thismeans that cooperatives of organic growers, likeKiwi Organics43, have some degree of marketleverage, even though this is not likely to last forlong. There is no scope in this report to considerthe degree to which organics in its export/com-mercial form is different from either domestic-oriented organic production or other forms ofmodern horticulture in terms of its impact onbiophysical systems. However, the short-termattitudes of some growers to soil fertility on sweetcorn properties in Gisborne suggests that there isneed for future research on this issue.

Nevertheless, some of the other fears that haveemerged about the commercialisation of organicsare, in part, allayed by information in this report.Some North American reviewers (see, especially,Friedmann 1993) are concerned about the com-mercialisation and commodification of the organ-ics industry, which was once an inherently localphenomenon. In conventional agriculture’s zenith,those interested in selling organic produce werelargely left alone by large companies and soldgoods to people in their local towns or regions.

With the increasing universalisation of ‘green’ and‘health’ concerns in the 1990s, however, largecompanies have become involved in organicproduction with the express desire to transferproduce over considerable distances to affluenturban consumers. The fear of reviewers such asFriedmann (1993) is that the domestic and philo-sophically-committed movement will be eithersubsumed or deformed by the inherently prag-matic concerns of companies seeking to tradeoutside of local food production areas. TheGisborne case does not fit into this schema, reveal-ing that the applicability of such theories might berestricted to North American or European do-mains. As is shown in Section 3.4, the reasons forthe Gisborne case being an exception to thetheories of overseas researchers relate to the factthat little or no organic farming existed in thedistrict before the advent of corporate actors andtheir export-orientation.

In the next case study of this series – Nelson/Golden Bay – it will be confirmed that the export/commercial sector has not been a parasitic influ-ence on its domestic/philosophical equivalent inNew Zealand. Indeed, it can be argued that thetwo sectors are, to some extent, becoming interde-pendent, with growth in one having a beneficialimpact on the other (Coombes and Campbell, inpress.). That this mutual dependence has devel-oped can be partly attributed to the mediatingfunction of BIO-GRO NZ. Thus far, large compa-nies with an involvement in organics have beenvulnerable to bad press and, consequently, prod-uct failure in overseas markets, so they have beenparticularly concerned that their practice is seen asacceptable to BIO-GRO NZ. This has meant thatthe potential for conflict between agribusinessesinvolved in organics and the more long-standingmembers of the alternative agriculture movementin New Zealand has been reduced. If a prolifera-tion of organic labels occurs – especially in theform of MAF-accredited but firm-specific criteriafor organic production which is already evident inGisborne – then harmful divisions could developwithin the New Zealand organics industry, be-cause the mediating function of a single organiccertifier will be lost. While the expansion oforganic production in Gisborne and, indeed, NewZealand during the 1990s has been successful andrelatively harmonious, there is no guarantee thatthis will always be the case.

43 See Section 4.2.3.

47

ReferencesBlaschke P.M. and Peterson D.R. (1994), Sustain-able land management and the East Coast ForestryProject, Office of the Parliamentary Commissionerfor the Environment: Wellington.

Butterworth G.V. (1991), Nga take i neke ai teMaori 2: he iwi pokai whenua, Ministry of MaoriAffairs: Wellington.

Campbell H.R. (1996), Recent developments inorganic food production in New Zealand: Part 1,Organic food exporting in Canterbury, Studies inRural Sustainability Research Report No. 1, Depart-ment of Anthropology: University of Otago,Dunedin.

Campbell H.R., Fairweather J.R. and Steven D.(1997), Recent developments in organic foodproduction in New Zealand: Part 2, Kiwifruit inthe Bay of Plenty, Studies in Rural SustainabilityResearch Report No. 2, Department of Anthropol-ogy: University of Otago, Dunedin.

Campbell H.R. and Coombes B.L. forthcoming,Green protectionism and the exporting of organicfresh fruit and vegetables from New Zealand:crisis experiments in the breakdown of Fordisttrade and agricultural policies, Rural Sociology.

Conway D. (1990), Optimism mark of 80s middleyears, Gisborne Herald, 6/1/90:8-9.

Coombes B.L. (1997), Rurality, culture and localeconomic development, Unpublished Ph.D Thesis,Department of Geography: University of Otago,Dunedin.

Coombes B.L. and Campbell, H.R. in press De-pendent reproduction of alternative modes ofagriculture: the relationship between export anddomestic organic food production, Aotearoa /New Zealand, Sociologia Ruralis.

Davis S. (1995), Some plant protection issues forWattie Frozen Foods Ltd., Address to the 48th NewZealand Plant Protection Conference, Hastings, 8August 1995.

Friedmann H. (1993), After Midas’s feast: alterna-tive food regimes for the future, in Allen P. (ed.),Food for the Future: conditions and contradictions ofsustainability, John Wiley and Sons: New York.

Hessel J.W.D. (1981), The climate and the weather ofthe Gisborne region, Reed: Wellington.

MAF [Ministry of Agriculture and Fisheries](1968), Commercially grown sweet corn, OccasionalPamphlet 21, Wellington.

McLaren R.G. and Cameron K.C. (1990), Soilscience: an introduction to the properties and manage-ment of New Zealand soils, Oxford University Press:Auckland.

Oliver W.H. and Thompson J.M. (1971), Challengeand response—study of the development of the EastCoast Region, East Coast Development ResearchAssociation: Gisborne.

Perry M., Le Heron R., Hayward D.J. & Cooper I.(1997), Growing discipline through total qualitymanagement in a New Zealand horticulturalregion, Journal of Rural Studies, 13(3), 289-304.

Roche M. (1996), Wattie and Heinz, in R. Le Heronand E. Pawson, Changing places: New Zealand in thenineties, Longman Paul: Auckland.

Russell R. (1994), Tairawhiti organic producers andconsumers newsletter, October, Tairawhiti organicproducers and consumers group: Gisborne City.

Scott B. (1993), Area’s isolation seen as asset,Gisborne Herald, 23/6/93:7.

Scott B. (1995a), Croppers reply to criticism ofchemical use, Gisborne Herald, 11/10/95:2.

Scott B. (1995b), Farmers cannot afford to avoidusing chemicals, Gisborne Herald, 19/10/95:3.

Spense M. (1995), Petition against 2,4-D sprayinggathers weight, Gisborne Herald, 20/9/95:12.

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Appendix

Methods forunderstanding growerdecision making

The results presented in this chapter arederived from an interview programfocussed on a variety of growers44. The

interviews were used to identify key ideas andattitudes held by farmers and growers themselveswhen making management decisions, and fromthese to identify their decision criteria. The princi-pal element of the research design was to comparethe decision making of two distinct groups,namely organic and conventional growers. To thisend, interviews were arranged with a total of 27growers, including 15 who were organic, sevenwho were conventional and five who were chang-ing between conventional and organic (see TableA.1). Since the objective was to identify most ofthe reasons for organic farming or for conven-tional farming it was appropriate to use not arandom sample of growers but a theoreticallyordered sample in which diverse types of growerswere sought and included in the study. Thus, the

full range of farm sizes, farm types, level ofactivity (full or part time) and farm locations wasincluded, where possible, since it is likely thatthese factors have a bearing on decision making.In this way the essential elements of decisionmaking can be identified but not their frequencyin the population.

Table A.1 shows the characteristics of thegrowers in the sample. There was an approximatebalance between the part-time and full-timegrowers. Inclusion of part-time growers recognisesthat for many growers in Gisborne District theirhorticultural operations are frequently comple-mented by off-farm work. In terms of farm type,there were mostly horticultural land uses (21cases) supplemented with some livestock landuses (five cases).

All the predominant land uses in Gisbornedistrict were included, with a relatively largernumber of horticultural and processed cropgrowers (sweet corn, peas, and other vegetables).The selection reflects the significance of organicfruit and vegetable production in Gisborne Dis-trict. It should be noted that the classification hastaken the predominant land use for each grower:in many cases there are a number of different landuses, including cases that have significant live-stock and horticultural activities. The table also

shows the certification status of thegrowers. Most (15) were organic asstated by them and about onequarter (8) were conventional.However, three conventional horti-cultural growers had modified theirconventional management bydecreasing their use of sprays to theextent that they were very close toorganic in practice. They were notplanning to seek formal certifica-tion.

The sample of growers inter-viewed provided suitable diversityin order to obtain a variety ofdecision criteria. However, com-pared to the Canterbury study, therewere fewer conventional growersand fewer conventional land usessuch a pastoral farming.

To obtain names of growers, avariety of techniques were used.The BIO-GRO list for Gisborne wasused to locate 22 organic growersand all except four were inter-viewed. In addition, each growerinterviewed was asked to providethe names of other growers in orderto obtain an extended list of names.They suggested conventional

44 Including both pastoral and horticultural producers.

Farm status: part time 13full time 14

27

Farm type: Livestock: sheep/beef 3deer 2

Horticulture: processed crop 9citrus 3pip fruit 3grapes 3persimmon 3honey 1

27

Certification status: Organic(in part or in whole) 15Changing from organicto conventional 1Changing from conventionalto organic 3Conventional 8

27

Figure A.1: Summary of Characteristics of Growers in the Sample

49

growers, typically with land uses similar theirown. Finally, growers were visited without priorcontact and requested to participate. A total of 29growers were interviewed on their propertiesduring April 1997.

All growers were interviewed in person. Theinterviewing procedure consisted of an introduc-tion followed by a brief explanation of the overallproject and its general objectives. Then an expla-nation was provided for the focus of this study onthe decision making process of organic andconventional growers in an attempt to learn thereasons why, or why not, people farmed organi-cally. The interviewer stated that his expertise wasin social science, not in farming or organic produc-tion. All interviews were tape recorded anddetailed notes were made while subjects werespeaking. Nearly all interviews were located in thesubject’s house and typically at the kitchen table.

The interview began with the subject giving athumb-nail sketch of the farm situation, includinga brief description of the type of farm. It thenmoved on to details of what stock or crops weregrown and why. Then the farmers were invited totalk about why they had their particular approachto farming. A check list of questions was usedoccasionally through the interview, but moretypically at the end of the interview, to ensure thatkey topic areas were included in discussion.However, most of the interviews proceeded intheir own way to cover all of the relevant topics.Growers generally enjoyed explaining their viewsand there was little need to ask any questions.Each interview took about one hour. The objectiveof the interview was to record thoroughly all ofthe main considerations the grower brought tobear on decision making with respect to organic orconventional production.

The ethnographic decision tree model ap-proach was used in order to develop an under-standing of growers’ attitudes and decisionmaking regarding organic production. Decisiontree research examines real world decisions whereany choice is made and, while it is based onindividual interviews, the decisions of a group ofpeople are examined and interpreted to develop adecision tree model. The method uses ethno-graphic interviewing to elicit from the decisionmakers themselves their own decision criteria.Ethnographic interviewing involves approachingfarmers or growers in a way that acknowledgestheir expertise in managing a farm or orchard, andis attentive to what they believe and why theymanage in the way that they do. Interviewsexplore farmers’ or growers’ thinking and recordin their own terms their reasons for actions, andconstraints that determined some outcomes. It isthis kind of approach which distinguished ethno-graphic decision tree modelling from other waysof analysing decision making. Other approacheshave tended to form decision making models

prior to surveying growers with two conse-quences. First, growers are forced to answeraccording to categories that conform to the re-searcher’s expectations, and second, that theresearcher is unable to assess unexpected orunanticipated factors that the growers themselvescan immediately identify.

Once the interviews are completed the deci-sion criteria identified in the interviews are thencombined in the form of a decision tree, or set of‘if-then’ rules. Ethnographic decision tree model-ling seeks to develop a complete decision treecomprising a series of connecting decision criteria.The decision criteria are discrete questions, an-swers to which are either true or false for anyparticular interviewee. The tree must allow eachinterviewee to move progressively through a setof criteria to arrive at an outcome which is true forthat interviewee. In addition the tree must com-bine criteria for all members of the sample groupin a logical way. The tree thus tells why a particu-lar outcome is reached because the outcome ispreceded by a particular set of criteria relevant tothat particular interviewee. However, the criteriaare not imposed by the researcher but are derivedcarefully from analysis of the open-ended inter-views to record what the farmers or growersthemselves state and believe. The interview datamust be carefully examined to learn what criteriamotivate the subjects’ decision making, and thenthese criteria are gradually integrated into acomplete decision tree. In this Gisborne study theidentified decision criteria were compared withthose found earlier using the existing decisiontree.