The Kiwifruit Claim – Grower Division

PRESS RELEASE

5 October 2014

The Kiwifruit Claim – Grower Division

IKGA has noted with some concern the position taken by Zespri Chairman Peter McBride and certain sections of the post –harvest industry quick to leap to his support as well as NZKGI in various statements this week. IKGA has the following to say about Mr McBride’s comments and those who have joined with him in opposing the claim:

Mr McBride’s statements were ill judged and premature. All he has done is to force industry participants to take sides on the issue which seems to be something that he apparently fears.

Mr McBride needs to understand that he created a divide when the PSA crisis hit. That is the divide between those who received compensation for removing their kiwifruit vines when PSA first hit Te Puke (IKGA wants to make it clear that it has no beef with those growers who believed they were doing the right thing based on the information given to them at the time) and those who have been affected by PSA after its “escape” from the initial outbreak area in Te Puke who did not and do not receive compensation.s. It was Mr McBride and others who appropriated $25 million of grower money and $25 million of taxpayer money to pursue an “aggressive containment” strategy in a scheme that the late Dr John Young (an acknowledged and ignored expert on pseudomanas syringae ) described as “doomed to fail” before it started. History proved him correct but at great cost to growers and taxpayers.

IKGA has long been calling for proper accountability and transparency in the kiwifruit industry. The National Business Review agrees with us and once said of Zespri that “Transparency is not one of Zespri’s strong suits”. Mr McBride seems to think that growers should just cut the government the same slack they have cut Zespri for many years by allowing Zespri to operate without any effective accountability or transparency. IKGA can do nothing other than support the Kiwifruit Claim because the claim is all about transparency and accountability.

Mr McBride seems to think that because the “industry” needs to curry favour with the government at all costs to preserve the “privilege” of the Zespri export monopsony (or possibly because “the industry” took $25 million from the Government in their “doomed to fail” attempt to contain the spread of PSA – it is unclear which from his statements) that those growers who missed out on getting compensation should just suck it up for the sake of this so called “privilege” and “take it for the team”.

IKGA does not think that is either fair or reasonable and looks forward to seeing the Kiwifruit Claim progress for the benefit of growers and the National Interest . IKGA hopes that growers will make an informed choice and not simply accept what Mr McBride and the others who dine at his table tell them they should think about The Kiwifruit Claim.

END of Release.

Notes for media – questions for Zespri and Mr McBride

• Mr McBride has commented on what he calls a lack of transparency about the Kiwifruit Claim. The board of Kiwifruit Vine Health (who are the unelected and self appointing governors of the “industry vehicle” for pest management that was set up in response to PSA and of which Mr McBride was the founding Chairman) have refused to allow a probity audit to occur at no expense to growers to provide assurance that the $50 million grower relief fund set up in the initial emergency response to the PSA incursion ( $25 million funded by taxpayers) was spent in accordance with the “industry approved” response to the PSA incursion. You should ask Mr McBride why KVH would not allow a cost free probity audit by an independent auditor into how this money was spent.

• Mr McBride was on the board of Zespri at the time in 2008 and 2009 when Zespri paid millions of dollars to Italian growers of Zespri gold as a “relief fund”. In spite of that experience and numerous visits to Italy by Zespri board members and staff to see the severity of PSA Mr McBride and his board, as far as IKGA has been able to determine, did not see the need to commission a scientific literature review, had not engaged in any meaningful way to alert MAF to the risks and press for the borders to be closed and did not even have a contingency plan to roll out in the event that PSA arrived here. It seems that Mr McBride seems to think that either this is acceptable governance or that because he is a fellow sufferer he is excused from accountability for this lack of meaningful action to avoid or prepare for an incursion of PSA and that this shared suffering gives him the added moral right to criticize others for doing something. You should ask him why he did none of these things when Zespri gold growers in Italy acted as a very early warning system of the dangers of PSA which they knew was a bacteria ( ie being a bacteria it is easily transmitted !!) .

• Mr Mc Bride has commented about the benefits to growers of working with the government on biosecurity as a reason for not proceeding with the kiwifruit claim. IKGA believes that a highly significant motivation for the kiwifruit industry getting into bed with the government under the new Biosecurity Government Industry Agreements (“GIAs”) was to curry favour with the government to ‘preserve the SPE’. This would also seem to be a significant motivating factor behind Mr McBride’s statements. Government Industry Agreements have some very positive features but they have an overriding negative feature and that is the shifting of the bulk of the cost of biosecurity onto producers. There are compelling reasons in the NZ context why this is inequitable for producers because of the significant public benefit and public good arising from secure borders. IKGA would argue that kiwifruit growers and other primary producer’s interests in an equitably funded biosecurity system have been compromised by Zespri and NZKGI surrendering the long term interests of growers in a head long race to get “brownie points” from the government. IKGA is sure that Treasury officials were delighted to see some of the government’s contingent liability for biosecurity getting shifted onto kiwifruit growers and especially delighted at the precedent that has been set in their negotiations on biosecurity with other primary producers. You should ask Mr McBride, given that he thinks it is such a good idea to work with the government that individual growers should not join the Kiwifruit Claim, if he can :

(1) produce a cost-benefit analysis demonstrating the long term financial benefit for growers in relation to the funding of biosecurity readiness and response measures under the Government Industry Agreement that they have raced into.

(2) Produce research undertaken by KVH or Zespri on public interest ( ie crown expense) v private benefit ( ie the private benefit to NZ growers only) of the improved and enhanced biosecurity arrangements prior to recommending to growers that the “industry” enter into the GIA with the crown and fund the industry contribution to these enhanced and improved arrangements via a compulsory levy payment on their fruit returns.

• Finally, IKGA notes the irony in Mr McBrides comments about Zespri working with the government on free trade agreements. It seems to IKGA that Zespri is something of a liability to the government in free trade agreements given that it is a monopoly “state trading enterprise” ( as described by MFAT filings with the WTO in response to questions from the EU ) that has been fined for anti-competitive practices in Korea, involved in customs fraud in China and caught up with a similar customs problem in Taiwan. You should ask Mr McBride how he thinks Zespri is helping the government with free trade negotiations given its track record in Korea, China and Taiwan.

Information about IKGA

• IKGA was established in May 2010 by a group of concerned kiwifruit growers.

• IKGA aims to provide an independent voice for kiwifruit growers because it has no confidence in the ability of KNZ or NZKGI to act as effective watchdogs on the activities of Zespri.

• IKGA believes there are questions that are not being asked about the activities of Zespri, the way it operates and how grower funds are dealt with by Zespri.

• IKGA is concerned that Zespri has become another corporate and lacks proper accountability to growers.

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