PM touts benefits of farm sales to foreigners

23:36, Aug 03 2014

Prime Minister John Key is defending the sale of farms to foreign buyers, saying that in the case of the Crafar farms the new owners "dramatically improved" them.

Conservative Party leader Colin Craig revealed on Friday that Chinese company Shanghai Pengxin had signed up to buy Lochinver Station near Taupo.

The company bought the 16 Crafar farms, covering about 8000 hectares in the central North Island, in December 2012 for $200 million, and has now set its sights on the 13,800-hectare Lochinver Station, valued at more than $70m.

The station was put up for tender last December by the privately owned Stevenson Group, which has owned the property for more than 50 years.

Craig, NZ First leader Winston Peters and Labour leader David Cunliffe have come out in opposition to the sale, which is awaiting approval from the Overseas Investment Office (OIO).

Craig said investigators acting for his party had learned of the sale, but the deal was being kept secret so it would not become an election issue.

Peters has promised his party would fight to buy the farms back after the election.

Green Party co-leader Russel Norman said his party would look to introduce legislation to restrict foreign investors from purchasing New Zealand farmland.

He said the environmental impact of dairy intensification had to be considered, before any sale could be approved by the OIO.

''Lochinver Station is situated on the upper reaches of the Ripia that flows into the Mohaka River and is also situated on the source of the Rangateiki River.

''Lochinver Station is at present a mixed farm involving beef, sheep and dairy. Any intensification of dairy farming at Lochinver risks polluting both these rivers," he said.

Key said this morning that he generally supported foreign acquisition of some farmland, and in the case of the Crafar farms it had been the best thing for them.

"So if you look at the Crafar farms, bought by Shanghai Pengxin, they were actually run down, there wasn't any significant New Zealand interest in buying those farms in the end, at the price that they paid," Key said on Breakfast.

"They have dramatically improved them. Shanghai Pengxin is developing, it has amazing distribution capability for those products in China, so that's underpinning Kiwi jobs here in New Zealand."

Mark Franklin, chief executive for Stevenson Group said capital freed up by the farm sale would allow Stevenson Group - which had decided farming was no longer part of its core business - to fast-track its major Drury South development near Auckland, which would employ up to 8000 people.

Key said it was a legitimate position to be opposed to foreign acquisition of New Zealand farmland, provided that position was applied equally to all foreign countries.

"The point here is that everyone should be treated equally if they're a foreign buyer, so if people are opposed to foreign ownership of New Zealand land, it's a legitimate position for someone to adopt," he said.

"I happen to think there is a basis where it makes sense for some land to be sold overseas and we've been doing that at half the rate of Labour. But I don't think we should say 'no because you're Chinese, and yes, because you're American'.

"And there are lots of farms in the South Island for instance that have sold to Harvard Pension plan - the Americans - and nobody's really ever said anything about that."

If the OIO approves the sale, it will need the signature of two Government ministers before it can go ahead.

The OIO application process won't be finished until after the September 20 election.