Land Use Fact Sheet
Covered cropping
Greenhouse production grew significantly during the 1980s, and expanded during the 1990s and early 2000s with larger structures, technology advancements and higher producing cultivars.
Products grown using covered cropping systems include:
- tomatoes
- capsicums
- cucumbers
- herbs and micro herbs
- lettuce
- berries including blueberries, blackberries, raspberries and strawberries
- cherries
- beans
- courgettes
- melons
- flowers
- native shrubs.
Commercial groups are also investigating production of medicinal cannabis in high tech greenhouses.
Overview
Regions
Covered crops can be grown anywhere in the country as long as you provide the right amount of heat and light for your crop.
Growing conditions
Different crops have different requirements for light and heat. Covered crops can use supplemental heat and lighting.
Climate
New Zealand has plenty of natural light to support most crops. Supplemental lighting can increase yields, especially in winter.
Commercial scale
Commercial scale depends on the crop you are growing. The average size of a covered crop in NZ is 1.8 ha.
Getting started
Greenhouses and tunnel houses are expensive to build, but allow excellent returns to be achieved from small blocks.
Skills / employment
Covered cropping provides a steady amount of work year-round, which makes it easier to find and keep workers.
Regions
Covered cropping can be used in all regions. Crops such as capsicums and blueberries can be grown anywhere in New Zealand under cover. Others, such as tomatoes, are more prevalent in regions with higher levels of natural light, such as Auckland, Bay of Plenty and Nelson.
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Commercial scale
Covered growing operations in Aotearoa can range in size from 0.05ha to as large as 34ha. The average size is around 1.8 hectares.
New technologies like supplementary lighting can improve production intensity and commercial viability of smaller areas, making it possible for growers to make a sound living from even a small area.
Getting into the industry
You'll need:
- strong finances to support the high cost of development
- a reliable source of irrigation water (capturing rainwater can help with this)
- to identify the right crop
- to find a market to supply (some growers might supply large distributors or wholesalers, and larger growers might deal directly with supermarkets or export)
- to work out the right type of structure (plastic and glass are the most popular, but vary a lot in price)
- a good source of power to run required systems — sometimes including heating.
Greenhouses need to be level. If there's any slope, the greenhouse will be warmer on the higher side and cooler on the lower side. This will affect water use and can lead to production and crop health issues.
Skills and employment
Operating a greenhouse requires a manager with a high level of technical ability, horticultural experience and people management skills, including the ability to manage changing seasonal labour demands.
The complexity of the role depends on the greenhouse setup and the crop being grown.
Some operations with crops such as tomato, capsicum, cucumber and eggplant will plant their crops during the summer to harvest in autumn, winter and spring. This avoids the need for extra labour during the busy summer period.
Although this reduces production, it's offset because product that is harvested in winter often gets double or triple the summer price.
Compliance
Food safety
All growers must meet the requirements of National Programme 1 under the Food Act 2014 to ensure the produce you’re supplying to the market is safe to eat. The requirements include rules about how the crop is handled, managing spray residue, and withholding periods.
New Zealand Good Agricultural Practice (NZGAP)
NZGAP is a system that helps growers with all the overheads involved in keeping up with compliance requirements. Becoming NZGAP certified:
- gives you confidence that you're meeting compliance requirements
- makes it easier to find out when regulations have changed, and therefore
- makes your product more attractive to buyers.
Compulsory levies
Many product groups/associations have compulsory levies determined by ‘gate sale value’. These levies are used to pay for things like research and compliance issues facing the industry. Different crops have different levies and some have no compulsory levies at all, so be sure to check with the industry organisation.
Licencing
As with levies, it is best to check with the association or nursery you are purchasing plants from to see if there are any licence requirements for particular varieties. For example, with some berry varieties charge royalties for each plant sold.
Emissions
The Ministry for Business, Innovation and Employment (MBIE) estimates that the covered cropping industry in New Zealand created about 221 thousand tonnes of carbon dioxide emissions from heating in 2018. MBIE defines this type of heating as 'process heat'. More information about process heat in covered cropping and other New Zealand industries can be found on the MBIE website.
MBIE - Process heat in New Zealand
Process heat is usually generated by burning fuel. The fuel provider needs to purchase carbon credits to cover the emissions from the fuel they are selling. The cost of these carbon credits is passed onto the grower in the price of the fuel, so the growers pay for their emissions when they purchase the fuel for their heating system.
Fuels with higher emissions include higher costs because the fuel provider needs to buy more carbon credits. This means that growers will pay more in carbon costs for using coal than for gas. There are no carbon costs if you are using geothermal energy or burning recycled oil.
Growers of tomatoes, cucumbers, capsicums and roses can claim free carbon credits every year. This is called an industrial allocation. Growers who submit an annual return to claim these credits will get back, on average, around 60% of the carbon costs from process heating. If your allocation is higher than the amount of credits used, you can sell the extras. More information about claiming your industrial allocation credits can be found on the Environmental Protection Agency (EPA) website.
Council regulations
Many councils require consents for access to irrigation water and for other activities related to changing land use.
Talk to your local council before for your whenua.
Meeting council compliance obligations
National policy statement for freshwater management (NPSFM)
The National Policy Statement for Freshwater 2020 gives local authorities direction on how they should manage freshwater under the Resource Management Act 1991. As such, some local authorities require growers and farmers to create a Farm Environment Plan (FEP). Make sure you're familiar with the FEP expectations in your region. Check with your local council about the requirements for your whenua or planned development.
Even if your region doesn't yet require an FEP, it's good practice to put one in place for your whenua as part of your business plan. The Foundation for Arable Research (FAR) provides templates you can use to create an FEP.
Growing conditions
New Zealand offers fantastic opportunities for crops to be grown in greenhouses throughout the country.
High areas which have cooler climates may be suitable for growing crops that need winter chilling. Heating can be used to offset cold weather particularly in winter. However, in areas that constantly reach over 30 degrees for long periods, it will be difficult to grow high producing crops. It's important to check historical local temperatures, especially for the summer.
Greenhouses should be constructed on flat land, avoiding waterlogged or swampy areas. This helps to avoid a range of issues including variations in temperature and subsidence. Areas that need little or no earthworks are preferable for vegetable, nursery and flower growing operations but not necessary for some berry crops, which can happily grow on undulating land (although it does help to be as level as possible).
Climate
As a guide, winter greenhouse vegetable crops typically have an average 24 hour temperature in the range of 16-19 degrees. During summer it’s approximately 18-22 degrees. Crops will survive in lower or higher 24 hour temperatures but productivity and disease could become issues.
Sunlight hours, temperature and intensity of light are all important. These can be manipulated in a greenhouse with heating and sodium or LED lighting. Warming the environment and providing more light through the winter period will result in better productivity during those colder, darker months.
Many greenhouse growers welcome frosts, which can be great for suppressing insect pressure from outside, while inside the crop is protected with heating and curtains.
Water
Irrigation water is applied via tubes or drippers which emit a certain amount of water per hour. Water is dispensed in a 'cycle', with each cycle commonly delivering 100ml. The total amount of water used depends on the crop and the time of year. Generally the rate is between 8 cycles (for a low requirement crop in winter) and 30 cycles (for a high requirement crop in summer).
The planting density and requirements of your variety will determine how many drippers and how much water you’ll need.
When irrigating, start and stop times vary from season to season because of crop strategies and needs. Irrigation is generally triggered by light accumulation sensors. Some properties now have water content sensors to trigger irrigation when required.
You can recycle water and fertiliser. Most properties collect and store water in manmade, lined storage ponds. Rain water is collected from the greenhouses and/or from bore water. Gutter collection from the roof is a sustainable way to secure water in areas where there is no more ground (bore) or surface (pump into a river or stream) water allocation remaining.
Market
There are an estimated 300-500 hectares in greenhouse or rain-proof structures in Aotearoa, with an estimated value of $300-$600million. This does not include blueberries or raspberries which would likely increase these numbers significantly.
Domestic markets
Most greenhouses are located near Auckland, Hamilton and Christchurch. Other vegetable greenhouses are dotted around NZ.
Flower growers are concentrated around the Auckland and surrounding provinces as well as Christchurch. Berry growers are concentrated around the Waikato and Hawkes Bay, many using low-tech tunnel houses to protect crops.
Major cities in NZ have auction or distribution centres. Growers who are large enough to supply big volumes of product may deal directly with major supermarkets and deliver direct to their distribution centres.
Large wholesale merchants have a lot of influence over product distribution channels. Supplying a merchant like Turners & Growers opens market opportunities for both domestic and export supply. There's a list of other merchants in the resources section.
Export markets
For information about export opportunities, contact the individual fruit and vegetable product groups or wholesale merchants. Many merchants already have existing export markets.
Future industry
The future for covered cropping industries is bright. As demand for traditional and diverse food crops increases, there will be opportunities for growth.
Following the success of kiwifruit, other industries have established or are establishing new crops and markets.
The Fresh Facts publication produced annually by Horticulture New Zealand is a great place to find information about industry markets and trends across a range of crops. Your industry product group will also have good information.
Operational costs
Costs vary depending on the crop.
To get more information about a particular crop including set up and running costs, start by contacting the industry body for the crop you are considering.
Grower returns
Grower returns are dependent on the crop and grower system.
Whatever you decide to grow, it starts with understanding the industry, how it works and where the most successful and profitable growers are placing their focus.
You'll need to select the right site and have access to capable and focused people. Successful operations will have been developed correctly, have the right technology and have a focus on establishing the business.
The hard yards begin after the greenhouse is built. Having a unified strategy and business plan can help trustees and management to drive towards a shared set of goals. This is extremely important as it will be up to the trustees to monitor the performance of the management team against set key performance indicators (KPIs). These should be established around clear industry performance benchmarks with a goal to be the top 25% of growers and beyond.
Seek advice
Seek advice early, before you invest in any design or development.
Talk to your local Te Puni Kōkiri office to see how they can support you through your decision-making process. They will be able to provide advice and find out whether your project qualifies for funding.
Most established crops have an existing industry group that can provide additional support and resources for people thinking about becoming growers. Horticulture New Zealand has a list of product groups on their website. If your crop is not listed, they can still help to put you in touch with the right organisation.
If possible, seek out advice from people who grow covered crops in your area as well as knowledgeable suppliers.
Talk to qualified consultants who are experienced in covered crops and other land developments in your area. They will be able to provide detailed, impartial advice on what will (and won't) work on your whenua.
About this fact sheet
This fact sheet provides general information to help start and inform conversations. It is not comprehensive enough to support detailed decision-making.
The information in this fact sheet has been contributed by Grower2Grower, Horticulture New Zealand, TomatoesNZ and Te Puni Kōkiri kaimahi. Data that has not been credited in the body of the fact sheet has been sourced from StatsNZ or provided by the contributors.
You can provide feedback on the content on this or any fact sheet by emailing us at TPKinfo@tpk.govt.nz
