Fishing

Prior to the early 1960s, the New Zealand fishing industry was largely limited to a small number of high-value inshore species such as crayfish, with only one-quarter of the catch being exported (Bollard and Pickford, 1998). In 1963 the government started offering incentives for the industry to expand, in the form of subsidised loans for fishing and processing, and inexpensive access to fishing grounds.

Expansion was given a boost in 1978 with the establishment of New Zealand’s Exclusive Economic Zone (EEZ) under the United Nations Convention on the Law of the Sea, and the Territorial Sea and Exclusive Economic Zone Act, which saw New Zealand’s waters extended from 12 to 200 nautical miles. The government facilitated joint ventures between local and foreign industry, with these joint ventures leading to a rapid expansion of deep-sea fishing.

Government assistance, motivated largely to encourage New Zealand fishers into deep-sea operations, continued up until the early 1980s. New offshore fisheries grew, particularly through joint ventures. However, government assistance also encouraged more effort in inshore fisheries. This began to cause sustainability problems for many stocks (such as snapper and tarakihi), and this eventually led to the introduction of the Quota Management System (QMS) in 1986.

Under the QMS a Total Allowable Catch (TAC) is set each year for each stock, based on information on the biological state of the stock. Allowances for customary and recreational catch are made from within the TAC, leaving the Total Allowable Commercial Catch (TACC) for commercial fishers. The TACC is managed through an Individual Transferable Quota system involving perpetual property rights that can be bought and sold.

The QMS provides the Crown with a strong management tool to ensure sustainability of fisheries. If the health of a species is threatened, the TACC can be adjusted downwards, and fishers’ entitlement to catch is reduced accordingly. The QMS also provides much greater certainty for fishers about their property rights. Fishers are allowed to take their catch at any time during the year, reducing the “race to fish”, and the resulting overcapitalisation, that can occur when there are less well-defined property rights. The combination of a perpetual tradable property right and sustainable stocks also allows fishers to plan their business over the long-term, which encourages investment.

Since the introduction of the QMS, the fishing industry has grown in absolute size and the number of companies has reduced (within the limits on quota aggregation set under the Fisheries Act[25]). This has allowed economies of scale to be exploited, including through the use of larger vessels in the deep-sea fleet, many of which have processing facilities onboard. The main players in the New Zealand fishing industry are Sealord, Sanford, Talley/AMALTAL, Vela, Moana Pacific, and the members of the Seafood Industry Consortium. (SeaFIC, 2005).

The 1990s saw the development of a number of new and high value fisheries, most notably scampi and the expansion of tuna. Also in evidence has been the continuation of sustainability problems in some key stocks, such as orange roughy and hoki, which have been addressed through reductions in TAC levels with resultant impacts upon the industry. The 1990s also saw the introduction of cost recovery, whereby quota holders are charged levies to contribute to the costs of Crown management of the QMS, particularly scientific research activities.

Other trends from the 1990s include a growing focus on the environmental impacts of fishing, for instance the incidence of seabird bycatch; development of aquaculture and the farming of shellfish such as mussels, which is discussed more in Annex Two; and increasing Māori influence in the industry through, for instance, the 1992 fisheries settlement.

Horticulture

Horticultural production in New Zealand has a long history. Māori produced crops such as kumara for subsistence and trading purposes, and with European arrival, this production increased. Production benefited from the natural fertility of the land, and the productivity of horticulture improved, aided by mechanisation of processes for sowing and harvesting

Crops such as apples and pears were developed, and there was a considerable market for this produce in the United Kingdom. Horticultural production spread particularly in the 1970s and 1980s, with the development and commercialisation of the Hayward kiwifruit variety, the introduction of berries, and the expansion of citrus. Sales were expanded into North America and the European Union.

New Zealand has been producing wine since the mid-nineteenth century, though production volumes and quality have increased significantly from the 1970s. Wine exports have grown, particularly focused on the Sauvignon Blanc variety, with around half of these exports going to the United Kingdom. By 2003/04 wine exports were earning around $300 million per annum, or 14% of horticultural export revenue. These exports represented around 25% of total New Zealand production; the remaining 75% is consumed by the domestic market.

In a similar way to dairy and meat, exporting activities for horticulture have traditionally been organised through marketing boards with monopoly power, to coordinate activity and exert power as a seller on international markets. The key horticultural producer boards have been the New Zealand Apple and Pear Marketing Board and the New Zealand Kiwifruit Marketing Board.

As part of the producer board reforms in the late 1990s and early 2000s, the Apple and Pear Marketing Board was restructured into an independent regulatory board and a company (ENZA). The board has subsequently been abolished, and ENZA has merged with the Turners and Growers group.

The Kiwifruit Marketing Board was restructured in the late 1990s into an independent regulatory board and a company (Zespri). Under the Kiwifruit Export Regulations 1999, Zespri has a monopoly over kiwifruit exports, and the Board’s role is confined to regulatory functions and enforcing non-diversification rules (ensuring that Zespri keeps to its core business of buying New Zealand-grown kiwifruit for export).

Stiff competition on international markets and reasonably static prices have provided the impetus for innovation in horticulture, particularly in developing new strains of product. Research and development effort has led to the introduction of a range of new varieties recently: apples such as Pacific Rose and Jazz, and the new Zespri Gold kiwifruit. These market conditions have also led producers to find other ways of competing – on product quality through strict quality control, through developing temperature and humidity controlled environments to ensure a consistent quality product throughout the year.