Tears of joy for onions
Onion growers will be saving $6.5 million on tariffs once the free trade agreement (FTA) with its number one market – the European Union – is ratified next year.
That is the message from Onions New Zealand chairman Michael Ahern, and from their partners in the Ministries of Primary Industries and also Foreign Affairs and Trade (MPI and MFAT).
"We're really serious about working together to open up opportunities, and consolidate on the position we already have in countries like Japan, Hong Kong, Taiwan, Malaysia, Indonesia and Singapore," says Ahern. "We are exporting over 70,000 MT each year already to Asia, but it could be significantly more".
The good news for onion growers and exporters is the working relationships developing with MPI and MFAT. In part, this is a benefit of onions being a significant export crop bringing in $90 million per annum in export revenues for New Zealand. However, the new Strategy for New Zealand Onions 2013-2020 now provides a roadmap for the industry.
"Policy people and trade officials can see where we want to get to, and this helps them to help us," says grower and exporter Kevin Wilcox. This is an important step for a group that has truly been a quiet achiever in the horticultural sector over the last decade.
Another major plank of the strategy is the desire to access new markets in Asia which have historically been closed to New Zealand onions. Developments in free trade agreements are very positive, but there is still considerable work to be done in "the fine print".
"It's an issue for us that markets including China, Vietnam, Philippines and Thailand have not been directly accessible. New Zealand produces very high quality onions, with a reputation for food safety and product integrity. These markets have increasing demand for those attributes".
This direction is not without its challenges, and not just concerning trade policy. A historical focus on sending onions over a relatively narrow timeframe to Europe has shaped the structure of the supply chain in New Zealand. The increased focus on Asian markets is more likely to require a longer supply period, putting even greater emphasis on quality outcomes for stored onions. This also links in with initiatives to ensure the delivery of premium quality onions through adopting improved supply chain technologies.
So far the industry is still working through these challenges. This partly comes down to the choices of individual operators, but Onions New Zealand has a clear role in facilitating industry initiatives where all members can benefit. There are tentative plans in that direction, and Onions New Zealand is exploring potential partnerships according to Michael Ahern. Things are definitely moving.
