A report in New Zealand’s Apple Futures initiative from consultant and think-tank the NZ Institute of Economic Research (NZIER) has found the low residue programme earned the industry up an extra NZ$113m (US$91m).
The Apple Futures programme, which began in 2008, was aimed at reducing chemical residues on New Zealand apples to less than 10 per cent of the maximum allowable residue levels (MRLs) in Europe. Around 65 per cent of the industry’s output was grown under the programme in 2011.
The NZIER report focused on the impact of the Apple Futures programme on exports to Europe and the UK, where it was credited with maintaining market access for New Zealand at a time when requirements were tightening and competition was increasing.
“We estimated that, in each year of the programme, industry net incomes would have been between NZ$25m `US$20.1m` and NZ$35m `US$28.1m` lower without Apple Futures,” said NZIER principal economist Bill Kaye-Blake. “Totalled over the four years `2008-2011`, the economic benefit of Apple Futures was NZ$113m `US$91m`.
NZIER’s analysis was based on the assumption New Zealand would have lost market access in Europe and the UK to varying degrees for non-Apple Futures fruit, varying from 25 per cent to 100 per cent in different scenarios.
The report stated the Apple Futures programme benefit to cost ratio (BCR) was estimated at 4.68 to 35.39 in best and worse-case scenarios respectively.
“Because the BCR is greater than 1.0 regardless of the assumptions used, the programme is almost certain to have produced significant benefits to the industry,” said Kaye-Blake.