Newspaper Article – Deciding who owns A. and P. Board

Deciding who owns A. and P. Board

By Geoff Mercer
Staff reporter, Hastings

Sorting out who owns how much of the Apple and Pear Marketing Board and establishing an ownership structure is perplexing Hawke’s Bay pipfruit growers.

About 120 met formally on Thursday for the first time to discuss what Hawke’s Bay Fruitgrowers’ Association pip-fruit sector chairman Van Howard described as “the most important issue facing us at the moment and also the most difficult”.

Clarifying and devising a more appropriate ownership structure was mooted by a few growers about two years ago and support has built since.

There are several ownership options and reasons for pursuing them and the board will post growers a backgrounder we won’t be bringing them up to date on options early next week.

Mr Howard said many believed the issue of deregulating the domestic market was not handled well last year and that growers had been “rail-roaded” into accepting deregulation.

While the board was charged by growers with sorting out what was a difficult issue and was doing its best, growers would not be “rail-roaded” into accepting something they did not fully support.

He said the board’s “ownership roadshow” would visit Hawke’s Bay on October 17 and that growers would be keen to hear the board’s propositions. However, it was too soon to make decisions. Growers had not had time to absorb the relevant information.

Sector group member Phil Allison would head a subcommittee established to look into the ownership issue, he said.

Mr Allison said he hoped Hawke’s Bay growers produced a “definite proposal” regarding ownership by Christmas.

National pipfruit sector member Graeme Jones said the board could not recognise people as owners. Ownership was credited to the country’s 1700 pipfruit orchards.

An orchard’s stake in the board would depend on a division of reserves at September 30, 1988, on the basis of the 1988 pool crop. Capital charges paid between 1989 and 1993 and second tier charges paid in the years 1989-90 would also count.

Applying this formula to each orchard would determine how rights of ownership, whatever that me to mean, were apportioned.

Mr Jones said growers selling an orchard could only benefit from any future ownership dividend outcomes if they noted their interest on their orchard’s sale agreement.

Legislation would need to be passed to exempt orchardists from paying tax at 33 per cent on proceeds that accrued to them through any ownership dividend. The Apple and Pear Marketing Act would also need modifying to provide for ownership to be determined, he said.

Mr Allison said a meeting with senior Cabinet Ministers had indicated taxation would not be a problem.

One grower expressed concern that changing the legislation could provide an opportunity for opponents to further erode the board’s control over exporting. Many growers believe last year’s amendment requiring the board to publish licensing criteria weakened its control of exporting.

Orchardist and former Fruitgrowers’ Federation director Alan Hyde said he would not want any shares in the board to “fall into the wrong hands”. To retain grower control of the industry it should be established as a trust.

Orchardist Martin Pike said he was unconvinced changing legislation was required to achieve an ownership structure. Talk of an Act change was “alarmist”, he said.

Growers at the meeting said a legal opinion should be obtained to clarify whether the Act needed modification. One said the Fruitgrowers’ Federation should employ expert legal and professional advice to spell out options for growers. “We’re not competent to make decisions at the moment, he said.

Fruitgrowers’ Association chairman David Mardon said the meeting would serve a good purpose if it got growers thinking about the ownership issue. Prior to growers meeting the board last year over the deregulation issue association members had believed they could counter any argument to free up the local market. “(But) we were shot down in flames,” he said.

Growers had to do their “homework” beforehand this time, he said.

Mr Allison said Hawke’s Bay growers would not be railroaded this time and if the region was not ready to make ownership decisions by a board deadline in November it would say so. “We have already told them we won’t take a vote on October 17,” he said.

Mr Howard said the Hawke’s Bay sector group would liaise with a Nelson pip-fruit growers’ equity and ownership working group also looking at the ownership issue.

Photo caption – Van Howard…we won’t be rail-roaded this time.