An economic adjustment study of the Nelson pip fruit industry : a thesis presented in partial fulfilment of the requirements for the degree of Master of Horticultural Science in Horticultural Economics and Marketing at Massey University

Abstract

For many years the Nelson Province has been the major region involved in the production of New Zealand's export pip fruit crop. However, in recent years there has been a severe decline in the income of Nelson Pip Fruit Producers. An economic survey of New Zealand pip fruit producers revealed that 44 percent of the growers producing on the infertile Moutere Hill soils near Nelson recorded negative net farm incomes in 1974/75. The failure of these orchardists to adjust to changing economic and technological conditions is reflected in orchards consisting of a large number of old trees with a high percentage of less preferred varieties. In order to derive feasible adjustment strategies a ten year intertemporal linear programming model was constructed. This model was based on an orchard, representative of those experiencing adjustment problems. The model allowed for the adoption of new enterprises in addition to a variety of replanting, reworking, interplanting and tree removal activities. The results obtained from experimentation with the model included optimal patterns of tree replacement and intertemporal cash flows. These results indicated that the financial position of Moutere Hill pip fruit producers would continue to deteriorate over the next decade with considerable borrowing being required to finance maintenance and/or developmental expenditure. Positive cash flows could be expected towards the end of the 1980's after which the benefits of orchard restructuring would continue to accrue. While it was shown that considerable potential exists for increased incomes to be generated from Moutere Hill orchards it was recognized that the extent of the delay might necessitate a withdrawal from the industry of those growers who could not, or did not, wish to persevere with fruit growing. Accordingly, two new policies were suggested as possible measures which could supplement existing rural policy in order to alleviate problems of poverty on the Moutere Hills.