Declining land values make crops other than grapes more commercially viable and could prompt a move away from the region's vineyard monoculture, says a Marlborough horticulturist and horticultural real estate agent.
Paeony grower Richard Harvey said it was not viable to plant many crops other than grapes during the boom years of high land prices and high returns on grapes.
However, as land prices and returns on grapes fell, it was becoming feasible to return to more traditional Marlborough crops such as apples, cherries, and apricots and expand into new products, such as hazelnuts, which grow well in the region's climate.
"The best thing I can say about land prices returning to a more realistic value is that we will be able to see more flexibility in our local economy and not just a huge area in grapes," he said.
Some of his real estate clients seeking a rural section did not want grapes on site, he said.
"I've sold a couple of smaller blocks where we influenced the people [the vendors] to pull out the grapes and return them to just grass, so someone could come in and do whatever they wanted to do."
The infrastructure on grape-producing land, including irrigation systems, would save costs for buyers if they wanted to grow other crops, he said.
The demand for small sections between five hectares and 15ha with grapes growing was low, especially if vendors did not have a contract with wineries, he said.
Banks now "don't want to know" about small blocks of grapes, he said.
Marlborough's grape industry could be compared to the kiwifruit industry, he said.
"It [kiwifruit] became the latest thing to grow and you saw the industry grow about 30 per cent each year, but what happened was the production exceeded the infrastructure and the demand," he said.
The passing in of 23ha Gravitas vineyard at $2 million at a liquidation auction two weeks ago was symptomatic of the market, in that people were taking a wait-and-see approach.
He believed the receivers would be expecting a reserve price just over $2m for the property which was valued at $3.6m in 2008.
New Zealand Winegrowers chairman Stuart Smith said crop diversity in Marlborough would be a positive thing, but it would be up to individual landowners to decide what they planted.
The wine industry had seen more investment and grapes planted than was sustainable, he said.
Primac Horticulture owner Murray Neal, who grows apricots, nectarines and peaches, said a variety of crops had always done well in Marlborough.
High land values upset the economics of growing anything besides grapes, but there was no doubt that was changing.
"The trouble is that it's the individual's decision as to what they want to plant," he said.
"You've got to want to grow the crop you're growing, if there's no passion, then the economics are never going to work."
HOW TIMES CHANGE: The average price for grapes a tonne in 2009 was $1629, but this year it was $1292. A hectare of grape-producing land in Marlborough cost about $70,000 in 2000, $155,900 in 2003, and peaked at about $255,600 in 2007, but is estimated to be about $150,000 now, depending on where the land is in the province and the quality of the conditions for grape production.
By SIMON WONG - The Marlborough Express
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