NZ honey peak body could cost $2m, but who pays?
By Suze Metherell
June 24 (BusinessDesk) - A proposal to create a single body representing New Zealand's beekeepers and honey product sellers could cost $2 million a year, but doesn't yet have agreement on how it would be funded.
The industry concluded its four-day conference in Taupo amid expectations China will impose standards on the lucrative manuka honey trade, which has drawn criticism in the UK after a number of false claims to manuka pedigree from what were just blends. Asian demand for manuka honey has seen the price across all New Zealand honey increase, stoked by a global shortage of honey. Bees produced $187 million of exported honey in the June 2014 year, up 8 percent by volume and almost 30 percent by value on the previous year.
The Apiculture Industry Unification Project's interim working group told the conference that to be profitable and sustainable the industry needed formalised administration and a single peak body, which could be paid for by a commodity levy, although it didn't have the mandate to decide on funding.
"The industry has outgrown us," said Allen McCaw, a working group member and chair of the Honey Packers' Association, who said he has been calling for unification since 1983.
After consultation the working group has recommended an interim governance board of 12, with a goal to launch a formal national body for the $5.1 billion industry next April. It would grow out of the National Beekeepers' Association and would represent commercial and hobby beekeepers, exporters, packers, food manufacturers and health product makers.
The Federated Farmers Bee Industry Group would be wound down, while the Honey Packers' Association and the Bee Products Standards Council would come under the national body's umbrella.
The working group proposed a "wish list" to launch a $1.9 million peak industry body, budgeting $484,000 towards administration, $515,000 to further research into honey, which it expects could be more than matched by government research grants, and $950,000 to fund extended market access.
A levy per hive or kilogram of honey was possible, said Dennis Crowley, vice-president of the NBA and a member of the working group. The NBA was funded by commodity levies during the late 1990s, but members voted against renewing the levies after their expiry in 2002, and membership to the association also became voluntary.
In 1996, before it moved to a per site charge, levies were $1.61 per hive and the average honey price was $2.20 per kilogram. The average price of honey is now $15 per kilogram, he said.
In one scenario outlined, if the industry was charged $1 for each of the country's 482,856 commercial hives plus a levy of 1 cent per kilogram of honey it could raise $632,856, based on 15,000 tonnes of honey produced. If hobbyists' hives were included there would be a further $21,195. If hive fees were $2.50 and the levy rate was 15 cents per kilo that would be $3.5 million, Crowley said.
Those paying the levies could also direct where the funding went and how it was used, Crowley said. The working group said it would be unlikely that hobbyists would be chased for levies, but the interim governance board would also review what constitutes a hobby beekeeper. Currently fewer than 50 hives is considered to be a hobby, however, members from the floor argued that with 10 to 15 hives a hobby keeper can produce enough honey to be commercial.
In the meantime, the working group said the interim governance board would be funded by a voluntary subscription. It would be headed up by an independent chairman, with representatives voted on by their sectors. Commercial bee keepers would get four seats, export packers and marketers two seats, while hobbyist beekeepers, domestic packers and marketers, food manufacturers and health products would take a seat each. This was also a possible model for the final body.
In April, John Hartnell, chair of the Fed Farmers' group, Ricki Leahy, NBA president, and NBA chief executive Daniel Paul told Parliament's primary production select committee that government support would be needed to introduce commodity levies to help fund a unified body.
The NBA and the Fed Farmer's bee group hold their annual meetings tomorrow and will vote on the issue of unification.