$10,000, $12,700 or $30,000: the number that decides who is inside the system

What the exemption does now

Section 138 of the Act lets regulations exempt a class of persons from the requirement to be approved as an operator. Regulations 132(1) and 132(2)(b) of the Organic Products and Production Regulations use that power for anyone whose turnover from the sale of the product does not exceed $10,000 in each 12-month period in which it is sold while restricted by an organic standard.

Being exempt from approval is not the same as being outside the rules. An exempt person must still meet the Organic Standards Regulations, must still keep records demonstrating that the product complies, and must not use ingredients sourced from another exempt person. Under section 58 of the Act, they must also provide MPI with their name, contact details and any other prescribed information, and keep it current, despite the exemption.

What they do not do is appear on the public register of approved operators.

What approval costs

MPI sets out the numbers plainly, which is to its credit. For an individual approval:

• approval is a one-off cost of $375 to $525 plus GST payable to MPI, and
• independent verification is estimated at $950 plus GST as a minimum, payable to a verifier, initially annually and reducing to once every three years over time.

For a group scheme, which needs at least 3 operators all trading above the exemption threshold, each operator pays the same approval cost, plus $62.50 plus GST to join the group, plus independent verification at set intervals, for example years 1 and 5, at the same estimated $950 plus GST. In the intervening years group members check each other through the group's internal control system.

MPI's worked example is the sharp end of it. An operator with $13,000 of turnover holding an individual approval would pay an average of $645 plus GST a year. In a group scheme, $524 plus GST. And here is the part worth sitting with: those costs are identical whether the operator turns over $13,000 or $29,000.

The three options

The asymmetry that matters

MPI's own analysis contains the number that should shape any submission on this question. Under Option 2, assuming all 153 operators are at $29,000 of turnover, up to $4.4 million of organic product would be supplied to the domestic market without being approved or verified. Against OANZ's domestic retail market figure of $382 million, that is around 1.16 percent of value, leaving 98.84 percent still subject to approval and verification.

So: around 10 percent of operators, carrying around 1.16 percent of value. That is almost nine times more operators than value.

Read one way, that is the argument for the change. The oversight forgone is trivial in dollar terms, and the cost saved is real and concentrated on the smallest businesses in the sector, some of whom are paying $645 a year on turnover that would not cover a part-time wage.

Read the other way, it is a caution. Consumer trust is not distributed by turnover. A market stall, a farmers' market baker and a small online seller of infant food each carry the word "organic" to a shopper who has no way to tell them apart from a $2 million operation. Nine times more operators is nine times more points at which the claim is made.

Neither reading is dishonest. The submission question is which risk you would rather the system carried.

One presentational note if you are working with these figures: MPI's $382 million is OANZ's domestic retail figure. OANZ's 2025 Market Report puts the total domestic market including food services at $572 million. Both figures are correct for what they measure. Use the same one on both sides of any comparison you make.

The thing that would make a higher threshold safe

There is a version of Option 2 that gets the cost relief without the trust cost, and it does not require a different threshold. It requires the exempt list to be visible.

MPI will already hold it. Section 58(2) of the Act requires a person who is exempt from the requirement to be approved to give the chief executive their name, contact details and any other prescribed information, and to keep it up to date. So the moment the threshold rises, MPI holds a list of every business making an organic claim in New Zealand under the exemption. The discussion document is silent on whether any of that is published.

Publishing it is not a zero-obligation ask, and it is worth being accurate about that. Name, business number, trading names and the date of notification are already caught by section 58. Adding what the person is claiming as organic would need MPI to prescribe one additional field. That is a real cost, and a small one.

The reason it matters is arithmetic rather than principle. Deterrence is the size of the penalty multiplied by the probability of it being applied. Raising the exemption threshold does not change any penalty. It changes who is visible, and visibility is most of the probability. If a buyer, a verifier or a competitor can see that a business has notified MPI it is trading under the exemption and what it is claiming, the claim is checkable at no cost to the regulator. If they cannot, the exemption is not just relief from a fee, it is relief from being looked at.

That is the shape of our own submission on this question: support for $30,000, conditional on publication of the exempt-notifier list. We think that is the version most of the sector could live with. It is not the only defensible position, and if you hold a different one, the consultation is where it counts.

The questions

Questions 1 to 6 cover this section. Questions 1 to 3 ask you to rate each option from 1, strongly disagree, to 5, strongly agree. Question 4 asks your preferred option, including "another amount". Question 5 asks you to explain your reasoning, including benefits, risks and practical impacts. Question 6 asks for your alternative amount if you selected one.

Question 5 is where the useful information goes. If you are an operator between $10,000 and $30,000, your annual compliance cost against your annual margin is data MPI does not otherwise have.

Submissions close 11:59pm, 22 September 2026, at mpi.surveymonkey.com/r/8PGC3G5 or organicsconsultation@mpi.govt.nz.