Fresh capsicums

Summary of submissions and consultation process

  • In response to the December 2009 consultation document, two submissions were received regarding production of fresh capsicums. One submission was from Horticulture New Zealand (Hort NZ), the industry body representing New Zealand capsicum growers, and was submitted on behalf of growers.  Officials understand that all commercial capsicum-growers in New Zealand are members of Hort NZ. The other submission was from a capsicum-grower.
  • Because of the comprehensive coverage of Hort NZ, and because officials understood it to be the preference of the industry, consultation on the draft activity definition for production of fresh capsicums was conducted through Hort NZ. Officials provided the draft definition to Hort NZ on 15 March 2010. Hort NZ provided the draft definition to their 12 product group directors representative of all hothouse growers, which is the process that Hort NZ usually follows for consultation. The product group directors are representative of a significant segment of the industry in terms of size and experience. The draft activity definition was also sent to the individual capsicum grower who had made a submission in response to the December 2009 consultation document.
  • In response to consultation on the draft activity definition for production of fresh capsicums, one submission was received, from a capsicum-grower. The submission did not request any changes to the draft activity definition. The submission indicated that the draft activity definition did not explain clearly enough that growing capsicum plants from seeds to seedlings is not part of the activity.  

Summary of analysis

Input

Officials propose that the activity begin with the input of a capsicum seedling. The activity should not extend upstream beyond this point (for example, to include growing capsicum seedlings from seeds) because capsicum seedlings are a tradable commodity (and are currently traded in New Zealand). Following receipt of the submission in response to the draft activity definition, the activity definition was amended to further clarify that growing capsicum plants from seeds to seedlings is not part of the activity.

So that the starting point is clearly identifiable, the activity definition specifies that the activity begins when the seedling is transferred from the seedling propagation area to its final growing position. Different growers transfer seedlings into the final growing position at different stages of maturity, but officials and industry agree that the impact of such discrepancies are likely to be negligible because the emissions associated with raising seedlings are relatively minor and that a pragmatic approach is needed.

Output/Product

The output and product should be defined as ‘fresh capsicums’ rather than simply ‘capsicums’. This is because there are material differences between the commercial activities of growing tomatoes for fresh consumption (‘fresh capsicums’) and growing tomatoes for processing (‘capsicums for processing’):

  • Fresh capsicums must meet a range of quality standards that are not required of capsicums for processing, including specifications for size, shape, colour, appearance.
  • The uses of fresh capsicums and capsicums for processing are substantially different and thus they are subject to different market demands.

The proposed activity definition is technology neutral (for example, it does not distinguish between using greenhouses and not using greenhouses) and could capture the growing of fresh capsicums outdoors. In practice, fresh capsicums are typically grown in New Zealand in greenhouses, whereas capsicums for processing are not.

The distinction between ‘fresh capsicums’ and ‘capsicums for processing’ is found in the Commodity Levies (Vegetables and Fruit) Order 2007 and is well understood within the industry.

The activity description specifies it applies to fresh capsicums grown ‘for commercial purposes’ in order to clarify that non-commercial growers, such as households, are not covered by the definition. Non-commercial growers should not be covered because they are not trade-exposed.

Inclusions/exclusions

Emissions associated with grading, packing, storing and freighting should be excluded because they are not integral to the process of growing fresh capsicums and this approach is consistent with the approach taken for other activities.

Emissions associated with off-specification/reject production (i.e. fresh capsicums that do not meet the quality standards for sale as fresh capsicums) should be included because some off-specification production is unavoidable when undertaking the activity. This is approach is consistent with the approach taken for other activities.

Matter Analysis
The requirement to define each activity by reference to a physical, chemical or biological transformation of inputs into outputs. The activity is described as a biological transformation from inputs to outputs.
The undesirability of activities being defined by reference to the technology employed, the fuel used, the age of the plant, or the quality of the types of feedstock used when the activity is carried out. The proposed activity definition does not reference any technology, fuel, age of plant, or quality of types of feedstocks.
The desirability of defining activities:
  • consistently and equitably across industries.
  • in a way that takes into account the impact that definitions may have on business investment, geographical location, and the structure of activities.
  • in a way that takes into account the potential for intermediate inputs produced when the activity is carried out to be substituted for bought-in inputs.
 The proposed activity definition takes in account consistency and equity with other activity definitions, particularly production of fresh tomatoes and production of cucumbers, because these are very similar activities. It is also consistent with the approach taken for other activities with respect to off-specification production and associated packing, grading, storing etc.
The proposed activity definition takes into account the potential to impact on business investment, geographical location, and the structure of the activity.
The proposed activity takes into account the potential for intermediate inputs. To avoid including an intermediate input in the activity, the activity input is ‘capsicum seedlings’.  
The desirability of there being no overlap between activity definitions. The proposed activity definition does not overlap with others.
Any other matters the Minister considers relevant, including activity definitions proposed to be used in Australia. No definition for this activity has been developed by Australia.

Recommendation

Officials recommend that you approve the attached activity definition for production of fresh capsicums.

Last updated: 24 May 2010