Oct 12 2018

Monthly Update October 2018

Submission on the latest Emissions Trading Scheme review

In September we submitted on the government’s “improvements to the New Zealand emissions trading scheme” consultation.

We agreed that improvements to the scheme are needed to provide certainty and transparency, and supported opportunities for New Zealand to transition to a net zero emissions economy while ensuring that the impacts on domestic vegetable producers were understood and managed.

Following is an extract from our submission.

Growers of fresh tomatoes, capsicums, eggplant and cucumbers currently have access to free allocations via the Emissions Intensive Trade Exposed (EITE) scheme. These offset the ETS costs to varying degrees depending on location.

In the South Island, where coal is the primary source of heating for glasshouses, growers incur a higher ETS cost and these costs are not fully recovered by the free allocations they receive.  For example, at the current NZU price of $25, we calculate the average net cost of the ETS (after the free allocation) on heating costs for a South Island tomato grower is $26,693 per hectare. At an NZU price of $50, this rises to a net cost of $53,386 per hectare. 

In theory, the current free allocation system, which is based on yield instead of energy use, should have given a price signal for incentivising fuel source changes, however this has not occurred due to constraints including lack of suitable alternatives and the capital costs of conversion. We therefore strongly advocate for retaining free unit allocations for Emissions Intensive Trade Exposed industries until this problem has been resolved and there is viable alternative technology available for growers throughout New Zealand. 

Whilst growers have made significant gains in yield and energy efficiency over the past 10 years, much of the current infrastructure is reaching its limits and there are not many opportunities for future improvements without significant re-investment in new greenhouses. This will not happen without certainty around ETS settings, and technological advances in terms of alternative, cost effective fuel sources.   

As one of our members put it “there are no low hanging fruit here”, as there are no straightforward, obvious or cheap answers to how this industry can transition to low or zero carbon fuels. 

NZ consumers are unlikely to be willing to pay higher costs for produce. In 2012 Statistics New Zealand pointed out that “Fresh tomatoes had an average retail price of 1 shilling and 1 penny per pound in the March 1949 quarter. That’s about $9.10 per kg in today’s terms, allowing for general food price inflation. By comparison, the weighted average retail price in the March 2011 quarter was $4.40 per kg.”3   During that same quarter (Jan-March) of 2018, the weighted average retail price of fresh loose tomatoes measured weekly by Statistics New Zealand across seven regions of New Zealand ranged from $1.93 to $5.80 per kilo and averaged $3.54 per kilo. This illustrates that growers face ongoing downward price pressure. Retaining a fixed price ceiling or fixed price option for ETS units would prevent production costs rising so high that growers are put out of business, particularly in the South Island, because they cannot pass on the cost.

The alternative is that in the future these vegetables will not be grown in New Zealand for substantial periods of the year and instead be imported, which we believe would have negative social and economic consequences. For example people would no longer have access to locally grown produce that is fresher than imports; biosecurity risks will increase from the imported products; jobs and export income will be lost; and New Zealand’s own food security (ability to provide its own fresh vegetables) reduced. Additionally, those countries that the produce is imported from may not face the same carbon charges that our growers face, or they may pay a different price. Therefore, New Zealand ETS prices should be linked to international prices, via direct international purchasing of units.

The full submission is available on www.tomatoesnz.co.nz/hot-topics/ets/ 

 Potato Mop Top Virus (PMTV)

This unwanted organism was recently discovered in stored potato tubers in Canterbury. It is soil borne and vectored by the potato disease Powdery Scab.  Our literature research to date has produced no evidence that it affects tomatoes. However, if you see any unusual symptoms please report them to the MPI disease hotline 0800 80 99 66.

Import figures

The three months to the end of August saw almost 516 tonnes of Australian imported tomatoes arrive, which is 2.5 times the volume for all of 2017. Last year the imports occurred from July through to October.   

Commodity levy application submitted

Our application for a new fresh tomato commodity levy order to fund TomatoesNZ activities from 2019-2025 was submitted to the Minister of Agriculture in late September.  We expect the new levy order to take effect from 1 April 2019, replacing the current levy order.

Grower’s bug scouting expedition

Tomato grower and board member, Anthony Tringham, along with his wife Angela from Curious Croppers in Clevedon, recently hosted Professor Steve Wratten and PhD student Morgan Shields from Lincoln University at their greenhouses.

Together with Chris Thompson from Bioforce, they conducted a bug scouting expedition at their site.  Anthony has a tunnel house with an old crop in it that has not had insecticide applied for many months.  Differing to standard practice, he lets weeds grow plentifully around the houses to increase ecological complexity.

 The group did some sweep netting around the greenhouses, however as the weather was cool they not find too many bugs. A few TPP were identified which were quite small in size. Anthony hopes this indicates that they are being eaten before they mature.  Whitefly was being parasitised by Encarsia Formosa, and European red mite was found.

 They also picked leaves and checked them under a binocular microscope. Few beneficial insects were found outside the glasshouses given the weather, but they did find some predatory brown lacewings. 

 Morgan gave a protocol to Anthony and Angela about how to set up ‘banker plants’ comprising TPP and Tamarixia in enclosed cages in the older houses so that they can ‘trickle’ Tamarixia into the main houses at the desired quantities and intervals buy breaking off leaflets as needed.  Morgan advised this is cheaper than buying them every week and gives the growers more control over and understanding of the system.  Professor Wratten advises this protocol can be made available to all NZ tomato growers if they are prepared to not spray everywhere.

As the weather warms Anthony and Angela wait to see how their ecosystem develops.

Olivia and Morgan