Kiwifruit plan criticised

Press, 28 September 1988, Page 4

Kiwifruit plan criticised

PA , Wellington Taxpayers are likely to have to guarantee $9O million over two years to the planned Kiwifruit Marketing Board in a venture Treasury officials say is risky, unbankable and likely to lead to trade retaliation against New Zealand. The board needs the guarantee to raise $2OO million next year to buy the kiwifruit crop. A Treasury report to the Government criticised the board proposal. It said it was a high risk strategy which “suggests that the risk of costly mistakes and less than optimal behaviour is high.” The board was proposed by the Kiwifruit Authority to counter falling prices and a crisis among growers. Falling prices and increased production have put more than half of kiwifruit growers in financial difficulties and a quarter are likely to be forced to quit this season. But two leaked documents — one from the Treasury and one from the Kiwifruit Authority — raised doubts about the soundness of the proposal. If carried through, the new kiwifruit authority would reverse Labour’s free-market philosophy