Report to show degree of Psa-V pain

The kiwifruit industry is bracing itself to get a more accurate picture of the impact Psa-V has had on the national crop.

Zespri’s annual crop estimate, which is drafted from information supplied by growers, is due next week.

KVH Inc general manager John Burke says some close analysis of the kiwifruit industry is needed to determine what help growers need from the government.

Kiwifruit Vine Health Incorporated general manager John Burke is focused on gathering the data for an impact-analysis report.

“Then we can start measuring the impact Psa-V has had on national production.

“We’ll be able to ascertain how much Gold has actually been cut out to date, so essentially: what Gold will be cut out prior to harvest.”

The date will feed into the impact-analysis report that KVH is drafting with Lincoln University, which may be presented to the government in a bid to get financial aid for growers, which is all part of the recovery pathway.

“We’ll be able to ascertain what sort of problem we are really dealing with; how are the banks intending to deal with it? Do we need to talk to government about it – and if we do what are we talking about with government?” says John.

He says all kiwifruit growers have been impacted one way or another by Psa-V, but the growers that are under the most pressure at the moment are those that have cut out their vines already.

“So there is a lot of Gold growers trying to get through to the 2012 harvest – and a lot of them will succeed hopefully – in that they’re a fair way through the season already – and if they can harvest a reasonable 2012 crop, that will provide cash flow for them to cut off their vines and rework to a new variety this coming winter.

“The growers with the most issues are the growers who have already cut off their vines – so they have no 2012 crop harvest and no income.

“And they’re going to hit the wall with cash flow in the coming months.”

John says the crop estimate will help them know how many growers are in that position and consequently, how many are going to face real difficulties.

“Knowing of course that there is another cycle of growers that are going to have difficulties going into the future, but the most immediate are with those guys that have already cut off.”

For a grower to start from scratch, to re-graft them in winter and get their orchard back to a production where it is producing a positive cash flow – they’re going to have to spend between $40,000 and $60,000 a hectare, says John.

“That cost includes everything; to run the orchard over about a three year period, but excludes debt servicing.”

One option to cover those orchard recovery costs is a possible government loan.

“We have been looking at the impediments for growers to get back on track and one of the biggest hurdles they face is raising the money,” says John.

He says this expense will be a struggle for some growers to cover – and could delay any recovery or lead to a loss of industry intellectual capital by forcing orchardists out.

“So it’s looking at how growers may get hold of that cash.”

John says one option KVH may ask the government is to consider offering loans to help orchardists.

He says there could be a business case for some government assistance if KVH can show there will be significant attrition and delay in the recovery if orchardists cannot access this money.

“It would need to be something that would be repaid like a student loan – but if it provides this leg-up and if there is a really strong business case, we will certainly be talking to the government about this.”

John says Lincoln’s economic analysis is looking at this and where the $700m in debt among kiwifruit growers lies so they have a clear idea of the number of growers likely to face difficulties.