The issues facing Māori Freehold landowners are well acknowledged. Lack of access to capital and dedicated expertise, governance challenges, fragmentation of land, and a need to consult widely before making investment decisions are all factors holding back development on Māori land. In addition to these challenges is the retention in the value of the land as the business grows; access to capital is constrained because the land cannot be sold with the enterprise (outside of the ownership).
In 2015, Te Tumu Paeroa and Quayside Holdings committed to piloting and testing a unique approach to helping address the difficulties faced by Māori landowners when looking to develop their whenua. Through this process, unique engagement and investment models were developed:
All land blocks looking to potentially participate in a Huakiwi orchard development take part in the Poutama process. It’s a proven process, designed to ensure that all owners have a chance to participate and ask questions before the Trust potentially enters into an agreement with Huakiwi. If the development does not have the support of owners – then Huakiwi will not proceed. These early meetings help form the cornerstones of a long-term relationship between the Trust and Huakiwi, and provide a forum for owners to ask any and all questions. Time invested at this stage is hugely important. And, at the conclusion of these hui, if for any reason either party feels that the relationship will not thrive, then no development will occur.
The investment model that Huakiwi developed started with the following requirements:
- The investment should be “risk free” from an owner perspective.
- Owners should receive a lease income while the orchard is developed and managed.
- The whenua should never be put at risk.
- Whānau should be provided with employment opportunities.
- Owners should take control of the business as soon as possible, and should have the ability to take over the business whenever they are able.
We refer to the model as “E tip, E rea, Kia puawai - Build, Operate, Transfer”, and it’s a one-of-a-kind approach to developing high performing businesses on Māori land. Here’s an overview as to how it works in kiwifruit:
E tipu - Build
Huakiwi provides 100% of the finance required to locate and secure water, buy licenses, and get the kiwifruit orchard up and running. Landowners aren’t required to provide any capital contribution, and will receive an annual lease income from Huakiwi. Effectively Huakiwi bears 100% of the risk of establishing and running the orchard.
E rea - Operate
Huakiwi will (vin conjunction with Southern Cross Horticulture) operate the orchard in order for Huakiwi to recover costs and to make a fair return. While the orchard is operating Huakiwi will help whānau develop the skills so that when the time comes they are confident to run and govern the business - on the ground, on the books, and in the boardroom. He waka eke noa is our approach - acting as a collective, working in unity and leaving no one behind. If the industry suffers a downturn, and / or the orchard does not perform as expected – then the worst case scenario for the Trust is that it will take longer for the business to transfer to the Trust.
Kia puawai - Transfer
Our goal is to be able to transfer ownership of the orchard to the trust as soon as possible. The exact timeframe will depend on the performance of the orchard, and of domestic and international prices for the fruit. However, the goal is approximately 15-17 years. At that time the Trust will 100% own and managed the orchard and its assets, and receive 100% of the benefits.