Grower co-operation the key
Is navels’ future sweet or sour?
Many Gisborne navel orange growers are barely breaking even and for producers of a world-class product, that is not good enough, Nick Pollock believes.
What to do about it is the subject of his report, The Future of Gisborne Navel oranges: Sweet or Sour?, written as part of the Kellogg Rural Leadership Programme he recently completed. It looks at Gisborne navel orange production, explores why production fails to deliver reasonable returns and presents a couple of options for improvement.
Though the subject matter is close to his heart Nick has only a few orange trees on his own orchard at Muriwai, 30 kilometres south of Gisborne. Nor does his employer, Leaderbrand, grow them.
So why navels?
“I've worked with navels before and they're a fantastic product that Gisborne does better than anywhere else in the world,” he said.
“But we’re in a situation where they’re failing to provide decent returns so growers are looking to other product categories, and I think we need to do something to arrest that.”
And he believes his findings can also be applied to other primary products such a range of fruit, timber and wool.
“Over the years they've all faced challenges around returns,” he said. “Sometimes the old way of working just doesn't work any more and we need to be open to change.”
For Nick working the land is in his blood, as from the 1960s until the early 1980s his father, Paul, was a horticulturalist in Gisborne. Nick studied landscape architecture but after finishing was keen to hit the workforce running, so used the horticulture component of his degree to get into the industry.These days he’s a farm production manager, dealing mainly with sweetcorn and maize, for Leaderbrand, with added responsibility around farm environment and irrigation plans.
“The company supported me into the Kellogg scholarship because they knew it would bring benefits wider than the core subject I was exploring,” he said.
“And I got some real insight by sitting down and talking with [founding director] Murray McPhail about the approaches that had worked for Leaderbrand, and how that might be applied in other product sectors.” A key point Nick makes in his report is the market weakness created with a number of growers all working independently. There’s strength in volume and smaller growers may have to band together to achieve that, he said.
“Leaderbrand works to a verticallyintegrated model to try to get 50 percent of volumes into supermarkets, which means they are in a position to sit down with buyers and work out a fair deal.A single grower is not likely to be able to do that on their own but it could be an option if they form cooperative groups and work together.”
He points to the example of the Gisborne Citrus Growers Co-op Ltd group, formed in the late-1990s, in which a group of growers got together, shared information and contracted to one packhouse.
“Then other packhouses went into competition with them and among themselves and it all fell to bits,” he said.
“If there’s no co-operation, then everybody loses.”
Working together could give growers the strength to negotiate with supermarkets on price, while guaranteeing smoothness of supply.
“With that critical mass behind them they could become genuine partners with supermarkets and work together on things like a supply programme, where communication is a big part of making it work,” he said.
“That could actually limit those big dumps of imported fruit on the market, further strengthening the position of local suppliers.”
Central to everything is the quality of the fruit and Nick said early harvesting by growers desperate to get the jump on the market causes huge reputational damage.
“If clients are getting fruit that doesn't taste good they aren’t going to forget that experience so they need to be getting the product at its absolute best.
“The New Zealand Citrus Growers Association is doing its best but, at the moment, maturity standards are still voluntary. NZ growers can’t compete against markets like the United States on how the fruit looks, but we can totally beat them on flavour. The more local growers who are on board with that, the stronger the industry will be.
“The industry needs to work together from grower through to consumer, and the consumer needs to be central to any actions.”
Four years ago retiring NZ Citrus Growers head of oranges and tangelos, David Ingoe, said he was pessimistic about the future of navel oranges unless growers fronted up and took control.
“The current domestic market situation, dominated as it is by the supermarkets will cut the throat of the navel orange component of the citrus industry unless change happens,” he said.
“The price structure must change to make it more viable to grow them.”
He was involved in the Gisborne Growers Co-op and said it was time to again look at that idea. And he also identified the problem of rushing fruit to market before it was mature.
However, Nick said unless the industry hits rock bottom he’s not optimistic that the majority of growers will come together to a great enough extent to form a functional co-op.
“I still think with a decent bloody shake-up there is good potential for navels, but there doesn't seem to be a lot of appetite for change,” he said.
“Getting whole industry agreement is unlikely so a group of growers is likely to have to pave their own path. Growers need to be courageous and push for real change [so] they can deliver a sweet consumer experience that will see consumers pay a sweet price.”