NFGA President David Blewden Urges Growers to 'Be Prepared'

According to NZFGA President David Blewden it pays for growers to be thinking ahead on how to best handle the challenges predicted to come in the 2014 season and beyond. The following constitutes a report from David on what he sees as critical considerations for growers looking to the future.

"The recent increase in the minimum wage to $14.25 and the ever strengthening New Zealand dollar are not the type of news to bring joy to flower grower's hearts. By now growers should have checked their employment arrangements with their staff and ensured that in addition to the minimum wage increase, which takes effect on 1 April, they are also complying with all other aspects of employment law such as Kiwi Saver and the Holidays Act.  All members of NZFGA receive free membership of the Employers and Manufacturers Association (EMA). The weekly bulletins provide example after example of employers who discovered too late, and at considerable expense, that their employment arrangements with staff were deficient.  No matter how good you think your relationships with staff are, never underestimate how quickly things can go bad when money is involved and there are lawyers prepared to take on personal grievance claims on a no win, no fee basis.  Don’t forget that even if you successfully defend such an action the cost in terms of time and money are likely to have been significant."

"With the Cymbidium Orchid season just around the corner, the record-high New Zealand dollar must be of extreme concern to growers and exporters alike.  After last year’s disastrous export season, a repeat this year is something the industry can ill-afford. It is hoped that cymbidium growers and their marketers will have in place a plan to deal with this season’s crop which will maximise the export opportunities and where not possible there is a structured approach to selling the surplus on the domestic market.  Our domestic market is so small, that its ability to absorb unsold export crops is extremely limited.  A repeat of pallet after pallet of cymbidiums arriving unexpectedly on the local auction floors, as we saw last year, is in no-one's best interest, (with the possible exception of the packaging suppliers and transport operators)."

"With many of our nursery inputs imported, (think fuel, fertiliser, sprays and even planting material), the high dollar is helping to keep nursery costs down for many.  A significant drop in the dollar would almost certainly result in significant and sudden price increases in many key products.  Although there is little growers can do to protect themselves against sudden changes in the value of the dollar, they should nevertheless ask themselves what the effect on their budgets would be, should a significant change in value occur.  With the currency at record highs any significant correction is likely to be downwards, but with rising interest rates and commodity prices applying upward pressure, any significant change does seem unlikely in the short to medium term."

"The high dollar will make flower imports attractive again this coming winter. The economic viability of many imports last year was marginal at best and it remains to be seen to what extent they are a feature of the domestic market this year. Never-the-less imports are likely to become an increasingly significant factor, coupled with a declining local grower base, and growers should be considering how they will compete and distinguish their product from an imported equivalent.  Cutting costs and by extension quality cannot be the answer.  There is no way local growers can compete on price with overseas growers, who in many cases are enjoying significant subsidies and tax breaks in addition to significantly lower land, wage and compliance costs. It  is ironic that on the one hand the Government wants New Zealand businesses to pay better wages, but on the other hand encourages and facilitates imports from countries which provide subsidies that we can only dream about. While we must accept this as an unfortunate consequence of globalisation, what is totally unacceptable is the lack of action by our own Ministry for Primary Industry when illegal imports occur.  It is now almost 9 months since a flower importer was outed as engaging in illegal import practices and yet we are still waiting for MPI to conclude their investigations.  We say to MPI and Minister Nathan Guy that this is not good enough and that we expect far better from those charged with protecting New Zealand’s Primary industries and our environment.  The flower industry might be small by comparison to many others, but the potential for imported flowers to introduce new pests and diseases is enormous.  That an importer can allegedly flout the law and 9 months later there still be no resolution by MPI can be simply described in NCEA terms as a “Fail” by all concerned."

For further discussion contact:

David Blewden on [email protected]