The kiwifruit sector is smarting at a decision by the Court of Appeal to uphold a ruling that will more than double the rates bill for many orchardists in the Gisborne district.
The Court of Appeal upheld an earlier High Court decision allowing Gisborne District Council (GDC) to include the value of SunGold kiwifruit licences in property valuations for rating purposes.
The court ruling left the sector contemplating the wider implications of the decision across the entire country, amid fears of significant rates increases that will accompany the licence’s inclusion.
Gisborne kiwifruit grower Tim Tietjen led the pushback against the proposal, with support from NZ Kiwifruit Growers Incorporated (NZKGI).
He said he had been hopeful the appeal would be successful but is now contemplating a doubling of his rates bill from about $4000 to $8000 on his 5.8ha orchard, which includes 3.1ha of SunGold fruit.
With SunGold licences valued at about $800,000 a hectare at the last tender round, including them in his property’s valuation is an additional $2.5 million on its capital value.
“And that comes when the average Gisborne District rates increase has been about 7%.”
The action by Gisborne District Council commenced three years ago. But Tietjen said the economic landscape was significantly different then, when returns were higher, costs lower and the area had enjoyed a good run of growing seasons.
He said he knows of a couple of SunGold orchards that have had only two seasons’ harvest history and are still to reach full potential, and have been severely impacted by Cyclone Gabrielle with flooding and silting.
“This is hard when we are told as horticultural growers we are a valued part of the primary sector here in Gisborne,” he said.
He said the likes of apple growers may also need to consider whether their licence values will be capitalised into their property values in coming years.
NZGKI CEO Colin Bond said the group will continue to push back against the proposed rates hike. He said NZKGI is busy working through options for the sector in coming days.
Farmers Weekly understands other district councils with ratepaying kiwifruit orchards have been watching the legal to and fro closely before following GDC’s decision.
Last year Western Bay of Plenty District Council’s acting finance manager told Farmers Weekly that his council will be communicating with ratepayers the process once final wider revaluation decisions have been made.
Western Bay of Plenty District Council’s catchment accounts for almost 80% of the national crop.
