Government forks out $40m to kiwifruit industry after disease blunder

After more than a decade of fighting to hold the Government responsible for the devastating kiwifruit vine disease Psa-V, growers have settled out of court to the tune of $40 million. 

The kiwifruit claim was due to head for the Supreme Court on Monday, but was abandoned after the $40 million settlement from the Government. Strathboss Kiwifruit Limited, representing a number of kiwifruit growers, had brought a claim for $450 million plus interest.

The sum includes a contribution of $15 million from the Crown's insurers. 

In 2009, the Ministry for Primary Industries (MPI) allowed pollen to be imported into New Zealand but what arrived was kiwifruit plant material harbouring a strain of the destructive vine-killing disease. MPI said the claim was related to actions taken by the Ministry of Agriculture and Forestry, before MPI's establishment. 

It was only a year later that the Ministry was grappling with outbreaks throughout the country that left orchards decimated, costing the industry an estimated $450 million. 

Eight years later, the High Court ruled that the Government had been negligent in its handling of the disease and had breached its duty of care by letting Psa-V in. 

Claim chairperson John Cameron says the settlement will help to provide "some compensation to the growers" after they were left devastated by the disease. 

“What happened to the Kiwifruit industry in 2010 was entirely preventable – MPI knew PSA existed, they knew the damage it could cause if it was let into the country and they breached their own protocols that were in place to keep it out.  

"It is critical our primary industries can rely on our Government to perform their biosecurity role with reasonable care and skill; we don’t want to ever see this happen again."

MPI Director-General Ray Smith said all parties agreed it was time to move on and bring the legal challenges, running since 2014, to a close. 

“This payment to settle is a sensible one on a per-head basis given the number of claimants in the class action, and their legal and litigation funder costs," he said.

“But the settlement acknowledges the grievance felt by the kiwifruit sector plaintiffs.”

Just last year in April, the Court of Appeal ruled that while MPI was responsible for the outbreak, the Government wasn't liable for the losses.

“In its decision of April 2020, the Court of Appeal found it would not be fair, just or reasonable to make the Crown legally responsible for losses of this kind, and that therefore, no legal duty of care was owed by the relevant MAF staff to the plaintiffs," Smith said.

"Since that time, much work has been done to enhance and improve the way we manage pre-border risk, import processes at the border and incursions that inevitably occur."

The 212 farmers involved in the Kiwifruit Claim will now get 62 per cent of that settlement. 

Eleven years onwards since the first reported case in Te Puke, the industry is worth more than $3 billion.

Pseudomonas syringae pv. actinidiae, or Psa-V, doesn't risk human, animal or other plant health other than kiwifruit vines. It causes leaf spotting and can cause vine death.