Falling tariffs are slowly boosting incomes for horticulture growers who would otherwise be buffeted by difficult trading conditions such as supply route problems or economic fluctuations in target countries.
But the improvement is slow because tariffs often reduce only gradually under the terms of free trade agreements (FTAs), signed between New Zealand and its export partners.
This information comes in the latest two-yearly publication by the Horticulture Export Authority, called Barriers to our Export Trade.
This document put the total annual cost of tariffs to the horticultural sector at $135 million, down from $168 million two years ago.
Averaged across 5000 growers, the loss of income from tariffs was $27,000, down from $30,400 in 2022.
This progress has been welcomed by the Minister of State for Trade and Associate Minister of Agriculture, Nicola Grigg.
“The Government has made good progress on some of the barriers impacting our horticultural exporters,” she says.
“I know that working together, we will continue to see trade barriers resolved.”
The report put the total annual value of horticultural exports at $4.9 billion, up from $1.7 billion 20 years ago, and up 2% in the past two years.
As usual, Kiwifruit exports dominated the trade, with 58% of total value. Apples were second, with 19% and onions came third.
The horticultural trade has been a positive one for years, but the story is mixed. In some cases, volumes declined, and the disruption of trade by non-tariff measures (NTMs) was persistent. For example, many countries prohibit imports of new horticultural products until a risk analysis has been carried out and import requirements established. This is expensive and can take years or even decades to complete.
In addition, pest control measures are often not justified by actual risks, or are outdated, and slow to implement.
There are restrictions on which overseas ports can be used for specific products, creating uncertainty for exporters. Ports will also sometimes impose costly requirements on shippers such as licences, prior notice and pre-shipment inspections.
New Zealand inspection systems are not always accepted and international protocols are sometimes not followed.
Shipping is another problem. One issue was the closure of the Red Sea to sea freight due to armed attacks on vessels, which often necessitates a lengthy detour around Africa. In addition, global demand for shipping which peaked in 2021 has peaked again in 2024, with serious port congestion in Europe, North America and Asia.
But falling tariffs have eased the pain, albeit at varying speeds. Overall, the cost of tariffs on the entire horticultural sector fell by 20% over the past two years, due mainly to the elimination of tariffs on kiwifruit sales to the European Union in May.
Despite this gain, tariffs charged by the EU were still half of all tariffs paid by the sector. India was responsible for 43% of total tariffs. By contrast, many trading partners have eliminated tariffs completely.
The report shows growers exporting almost 40 different products including persimmons, passion fruit and garlic. Values varied from kiwifruit in the billions to a useful $28,000 for nectarines.
China is the most valuable export market, worth $1.05 billion, followed by the EU with $837 million in value. Japan was third, followed by Australia, Taiwan, USA, South Korea, Viet Nam, Hong Kong and Thailand.
Post Brexit the UK has slipped to 12th slot.
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