The Hawke’s Bay horticulture sector needs at least $410 million in additional funding to recover to its pre-cyclone state by 2030, a report says.
The Boston Consulting Group (BCG) report says the short-term, critical response to the cyclone was a success, but at least $345m more is needed for replanting and reinstatement and $65m more for orchard clean-up.
BCG New Zealand managing director and partner Phillip Benedetti said Hawke’s Bay growers are still facing extremely tough economic conditions a year on from Cyclone Gabrielle.
“The new report has shown growers are facing tightening margins with increasing production costs and challenges that have been exacerbated by Cyclone Gabrielle’s impact on harvests and infrastructure. SMEs in particular have struggled to bounce back post-cyclone,” he said.
“The horticulture sector is struggling to attract and retain talent, with young people leaving the sector and the region. Limited funding for horticulture education further adds to this challenge, and with the cyclone worsening business prospects in Hawke’s Bay horticulture, the sector could lose even more talent.”
Apples and Pears New Zealand chief executive Karen Morrish said BCG’s report confirms what the industry body is hearing anecdotally.
“The cyclone hit at a time when the industry was already facing pressure on profitability due to inflation, and replanting orchard blocks requires significant time and money.
“Replanting also requires water and right now, many of our growers are facing significantly reduced water allocations from the Hawke’s Bay Regional Council. Also, we have other growers who have the funds to invest and develop new blocks but can’t find land with the appropriate water consents.”
Growers are critical to the Hawke’s Bay community and are deeply enmeshed, with their lives and families in the region, she said.
“They don’t want to take unnecessarily from the environment. However, for them to re-establish what was lost, they must be provided the right environment to work within, and currently this is not the case.”
Benedetti said that initial assessments by BCG estimated the sector would face $3.5 billion in cumulative losses from 2024 to 2030, with over $920m needed for critical response and replanting efforts.
“Since May 2023, the government has provided $240m in grants and concessionary loans to support the sector’s recovery. This funding has enabled the sector to project an annual economic value of $1.7bn by 2030, compared to a projected $1.5bn without additional support.
“Effective clean-up activities and favourable growing conditions have reduced initial economic losses and replanting costs, reflecting a slight positive deviation from initial forecasts.
“To strengthen the horticulture sector and achieve long-term resilience, there needs to be targeted support for those most in need, investment in replanting and orchard-based technologies, and the long-term risks posed by climate change need to be addressed.
“Continued collaboration between the government and the private sector is essential to ensure the long-term sustainability and growth of the Hawke’s Bay horticultural sector.”
