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The court sequel to the outbreak of kiwifruit disease Psa draws to a close

Kiwifruit farm in Tauranga. Photo/Getty Images

Don Hyland lost his legs to diabetes and fought a lifelong battle with profound dyslexia. But what finally beat him was Psa. The infestation of his orchard with the kiwifruit disease forced him to sell it at a ruinous loss, and he holds the Ministry for Primary Industries (MPI) responsible.

Hyland sold his kiwifruit property in 2012 for $875,000. At the time Psa was first detected in 2010, he says, it had a market value of $500,000 a hectare, or more than $3 million.

“I had been beaten by Psa and I needed to get out,” the Tauranga 73-year-old says in his brief of evidence for the lawsuit that 212 kiwifruit growers have taken against the Crown.

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In 1991, Hyland was 48 and a successful dairy farmer when he was diagnosed with diabetes. He and his wife Judith decided on a change of lifestyle, so they leased out their farm and bought a Te Puke orchard.

In the almost two decades before Psa, or Pseudomonas syringae pv actinidiae, appeared, Hyland became a kiwifruit champion, achieving yields of up to 22,000 trays of gold kiwifruit a hectare compared with an industry standard of 8000 trays.

With fellow grower Russell Baker, he pioneered techniques such as alternate-row cropping (ARC) and he joined a select group of growers trialling new varieties for Zespri, including the current champion SunGold, or G3. He was one of three “high-performing, innovative orchardists” involved in a Zespri-funded trial with HortResearch scientists on innovative growing systems.

Hyland saw gold kiwifruit’s potential when it first emerged here in 1998. He planted the gold variety Hort16A and set about doing his part to transform the industry.

Don Hyland and Russell Baker. Photo/NZ Kiwifruit Journal

“I’m motivated by money and success,” he says. “I put my heart and soul into everything I do.”

Hort16A was all but wiped out by Psa and Hyland, forced to sell in 2012, missed out on kiwifruit’s remarkable comeback, led by SunGold. In the year to August 31, 2017, the value of kiwifruit exports rose 13% to a record $1.8 billion. Zespri enjoyed a 19% gain in global sales in the 2016/17 season.

The latest MPI projections are for kiwifruit export revenue to rise 21% by 2021, reaching $2.2 billion. University of Waikato researchers say the industry will generate 29,000 new jobs between now and 2030, by which time its contribution to annual GDP will have increased by $3.5 billion.

It helps that kiwifruit is New Zealand’s superfood – a somewhat woolly description that it earns because of its nutrient density. The country ranks third behind China and Italy for overall production, but most of China’s crop is eaten domestically, so Zespri accounts for about 30% of global sales.

Zespri’s SunGold kiwifruit has a nutrient adequacy score of 18.8, based on an assessment by Plant & Food Research that has been accepted into the USDA National Nutrient Database for Standard Reference. Green kiwifruit scored 11.4, oranges 8.1 and blueberries just 2.9. It’s also the key ingredient in Kiwi Crush, a household remedy for constipation, and contains compounds that may ward off heart disease, based on a University of Oslo study. Researchers at Taipei Medical University say it may help with sleep problems, too.

But in 2012, all that was cold comfort to Hyland. His orchard was close to ground zero for Psa: a neighbouring property, called RP1 (Restricted Place 1), was where the bacterium was first detected. He was 67 when his orchard became infected. He fought it for 18 months, “out of bed before daylight, seven days a week” – pruning, burning, spraying, grafting – but his health suffered as a result.

The straw that broke the camel’s back, he says, was when his vines, regrafted from Hort16A to SunGold, also became infected.

“When Psa struck Te Puke, we were heartbroken, disappointed and angry. We were angry because something so destructive to our industry had been allowed into the country by MPI and it didn’t seem like serious efforts had been made to keep it out,” he says. “I hold MPI and the Government responsible for my losses.”

Former Zespri chair John Loughlin. Photo/Wayne Tait

Suing “counterproductive”

Hyland’s story is quite at odds with the industry narrative. In 2014, Zespri chair Peter McBride urged growers not to support the lawsuit, which is now before the High Court at Wellington, saying it would compromise the industry’s relationship with the Government.

Zespri’s single-desk seller status is underpinned by regulation and McBride said the industry structure “is a privilege granted to us by government” that creates “huge value to New Zealand kiwifruit growers”.

The Crown’s witnesses have included outgoing Zespri chief executive Lain Jager, who told the court it was “counterproductive to sue your partner”, especially now the industry’s performance is “better than it has ever been”. Jager also acknowledged that some growers suffered loss and haven’t benefited from the current cycle.

The 212 growers in the $376 million lawsuit, led by Strathboss Kiwifruit and Seeka, claim the Ministry of Agriculture and Forestry – which became part of MPI when that ministry was formed in 2012 – was negligent under the Biosecurity Act when it allowed kiwifruit pollen anthers to be imported from China in 2009, because regulations forbade the entry of plant parts, and it failed to inspect the consignment at the border. The anthers allegedly carried Psa bacteria.

John Loughlin, who was Zespri chair from 2008 to 2013 and is still chair of kiwifruit packers EastPack, says there are “multiple perspectives on this”.

“The people bringing the litigation feel there was a poor performance on the part of the Government on biosecurity, that the decision to allow the pollen to be imported was a poor one made without consultation with industry and it should be held to account,” he says. “The other view is that nature is bigger than all of us and the Government can’t guarantee biosecurity. I can’t imagine the Government will back down and settle this.”

Hyland’s mate Russell Baker isn’t so sure. The 72-year-old took a different route out of the kiwifruit industry after his final harvest of Hort16A gold kiwifruit in 2011. Now he grows kiwiberries, another member of the Actinidia family, grape-sized fruit that are eaten skin and all. It is a second cousin of the kiwifruit and doesn’t succumb to Psa. The fledgling crop hasn’t yet been assessed as a “new superfood”.

Baker’s small Bay of Plenty orchard is at a higher altitude, away from the main growing area, but it tested positive for the rapidly spreading Psa in December 2010. The kiwiberry is currently excluded from the Chinese market – where it is popular – under our free-trade agreement, because its edible skin puts it in a different category from kiwifruit.

Baker says Zespri’s opposition to the lawsuit may also be to avoid scrutiny of its own performance as a monopoly body, having been “fully aware” at the time of the disastrous impact Psa had on its growers in Italy and playing a key role through its science and research arm in how New Zealand responded. In fact, Zespri’s offshore operation, Zespri Global Supply, was researching Psa in Italy in 2009 because it was affecting its gold kiwifruit growers there.

The Government’s financial statements for the year to June 30 have a contingent liability of $93 million related to the lawsuit, which is based on second plaintiff Seeka’s assessment of its losses.

The MPI excuse – that it can’t be expected to prevent every possible biosecurity incursion across porous borders – doesn’t hold water, Baker says, because in 2009 when it rubber-stamped the consignment of kiwifruit plant anthers from China that the litigants claim carried the Psa bacteria, it was in breach of its own biosecurity regulations.

“It appears somebody slipped up and it was allowed in when it shouldn’t have been. MPI ignored its own legislated rules,” he says. “I think we could definitely win.”

Update: The Kiwifruit claim has now been heard and is awaiting the judge's ruling.

This article was first published in the October 21, 2017 issue of the New Zealand Listener.