Tens of thousands of apple and stonefruit plants will be destroyed following a directive issued by the Ministry for Primary Industries (MPI).
Growers are taking legal action against MPI, claiming potential future losses could add up to $1.5b.
The directive includes plant materials imported between 2012 and 2017, as well as materials taken or grown from the original plants imported from an offshore quarantine facility at Washington State University in the United States.
The centre has provided plant material to New Zealand stonefruit orchards since the 1980s.
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Hawkes Bay company Yummy Apples cultivates new varieties of apples and stone fruit in its nurseries. They've now discovered the budwood and rootstock they imported over the past six years was done so without proper certification.
Yummy Apples CEO Paul Paynter told RadioLIVE’s Rural Exchange he is disappointed with the decision.
"Some of this material was imported as far back as 2012, so there are [now] orchards of it."
Washington facility the Clean Plant Centre failed its last MPI onsite audit, so the Ministry has ordered all plants linked to it since its previous onsite audit six years ago be contained or destroyed.
More than 30 orchardists, nurseries and importers in Waikato, Hawke's Bay, Nelson and Central Otago will be affected.
Mr Paynter described the directive issued by MPI as "hopelessly binary".
He argues that while the destruction of recent imports may be fair, the odds of six year old orchards carrying dormant viruses are extraordinarily unlikely.
"It really comes back to some sub-standard management by MPI."
Newshub spoke to MPI earlier in the week but they wouldn't answer questions about its audit process or whether it would take responsibility for the erroneous import of material, saying the matter is before the courts.
"MPI has very carefully assessed all of the risks associated with this material and our decisions are about protecting New Zealand and the horticulture industry from those risks," MPI director of plants, food and environment Peter Thomson says.
Watch the full interview with Paul Paynter above.